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information Big domain purchase = Big venture capital funding round of $100 Million+? Really?

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WhoaDomain.com

WhoaDomain.comTop Member
Impact
10,717
So I keep getting these news updates about how some startup secured an expensive single word dictionary word domain in .com and how it correlates to big money investors handing over hundreds of millions of dollars to the startup in funding rounds.

With such articles popping almost monthly I have to ask is really proof that if a startup buys an expensive domain that it automatically means because of the domain they got the big funding?

or does the credentials of the company itself get the credit for the big funding?

It's like those big domain sales we see on Namebio like for LasVegas.com or Vegas.com for $90 million or $35 million. One paper it looks like those prices were for just the domain purchase but when you do a background check you will see the sale included the websites plus all the backlinks. so it's not really about the big domain purchase.

I think the domain isn't the main reason but probably just 10% contribution to the big funding rounds of $100 million +. Maybe even less.

This sounds more like a psychology discussion.

I mean lets say a Venture Capital company that is looking to invest their $100 million in some startup. How does the startup owning an expensive dictionary keyword .com translate to them handing over $100 million? I just don't get it.

If I was the VC? I'd wonder or ask. "Did this company just squander $150,000 or $350,000 or even $50,000 of a single word .com when they could have shown some creativity and registered their own domain in .com?" "is this really the kind of company I want to hand over my $100 million + to?"

I mean I deal with big companies all the time and they are all about budgets. I'm talking big companies who will only offer $50-$100 for a domain.

Yet I am expected to believe that these same type of companies will invest $100 million dollars on a startup just because they secured a $100,000 or $50,000 .com dictionary keyword in .com?

I mean hey anything is possible but if I am to use such sales as examples in my own negotiations I'll need to explain why big purchases like the one below Sense.com equates to future venture capital funding rounds.

What do I think? I think these startups have more to offer than their domain name. They have good financials and quarterly earnings. They have a great idea that solves a problem.

If anything securing a dictionary keyword in .com is more about following the trend of startups using single keyword dictionary keywords with relevance to their biz. I don't think it really has anything to do with them getting a high funding round.

What do you think? Is there any data the supports the belief that because a startup paid big money for their domain that the purchase equates or resulted in their big funding round?

https://domainnamewire.com/2022/05/06/sense-closes-105-million-in-funding-using-sense-com/#respond
 
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OwnedWords

Established Member
Impact
52
I think you're pretty spot on. The article you linked to is really just a press release by Sense.com about themselves. It was doing cartwheels to state the domain even mattered at all. Also to your point, Vegas.com was a full on business, they even put on the Las Vegas Film Festival and it was owned by the wealthy owners of a newspaper so it wasn't like a dude in basement running a $90 million blog.

I am friendly with a VC who likes domains. I know he named his latest social app by searching for a one word .com he could pick up for 5-figures. So it might be true that startups would like to have a great or exact match domain but its pretty obvious most don't even bother trying.
 
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Mkt Sales Leads

Established Member
Impact
867
So I keep getting these news updates about how some startup secured an expensive single word dictionary word domain in .com and how it correlates to big money investors handing over hundreds of millions of dollars to the startup in funding rounds.

With such articles popping almost monthly I have to ask is really proof that if a startup buys an expensive domain that it automatically means because of the domain they got the big funding?

or does the credentials of the company itself get the credit for the big funding?

It's like those big domain sales we see on Namebio like for LasVegas.com or Vegas.com for $90 million or $35 million. One paper it looks like those prices were for just the domain purchase but when you do a background check you will see the sale included the websites plus all the backlinks. so it's not really about the big domain purchase.

I think the domain isn't the main reason but probably just 10% contribution to the big funding rounds of $100 million +. Maybe even less.

This sounds more like a psychology discussion.

I mean lets say a Venture Capital company that is looking to invest their $100 million in some startup. How does the startup owning an expensive dictionary keyword .com translate to them handing over $100 million? I just don't get it.

If I was the VC? I'd wonder or ask. "Did this company just squander $150,000 or $350,000 or even $50,000 of a single word .com when they could have shown some creativity and registered their own domain in .com?" "is this really the kind of company I want to hand over my $100 million + to?"

I mean I deal with big companies all the time and they are all about budgets. I'm talking big companies who will only offer $50-$100 for a domain.

Yet I am expected to believe that these same type of companies will invest $100 million dollars on a startup just because they secured a $100,000 or $50,000 .com dictionary keyword in .com?

I mean hey anything is possible but if I am to use such sales as examples in my own negotiations I'll need to explain why big purchases like the one below Sense.com equates to future venture capital funding rounds.

What do I think? I think these startups have more to offer than their domain name. They have good financials and quarterly earnings. They have a great idea that solves a problem.

If anything securing a dictionary keyword in .com is more about following the trend of startups using single keyword dictionary keywords with relevance to their biz. I don't think it really has anything to do with them getting a high funding round.

What do you think? Is there any data the supports the belief that because a startup paid big money for their domain that the purchase equates or resulted in their big funding round?

https://domainnamewire.com/2022/05/06/sense-closes-105-million-in-funding-using-sense-com/#respond

The connection between a startup acquiring a one word .com and funding might be where that company wants to scale and thus pivot from their original offering. For example if Aicointechsolutions.com were pitching to VCs that it needed funding to expand to general fintech in order to get bigger corporate and intl clients, it might consider acquiring Thunder.com /any other generic word and even use this in its pitch. Note, quite a good number of startups buy names that don't immediately appear relevant to their business as they no longer want to be pigeonholed to a niche (this is esp common with tech companies that go for one word generic / brandable names like Candy.com / Pancake.xyz).

Otherwise, finding a cheap, relevant keyword name would indeed make financial sense for all concerned.
 
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lovely4ever

Established Member
Impact
1,932
I mean I deal with big companies all the time and they are all about budgets. I'm talking big companies who will only offer $50-$100 for a domain.



https://domainnamewire.com/2022/05/06/sense-closes-105-million-in-funding-using-sense-com/#respond


How you assumed they are big companies if they can offer only $50 to $100 for a domain !!??
Maybe they are considered big companies in small provinces or towns in asian countires ,
But big companies in USA / canada / australia / UK or in europe countries they pay thousands to millions for domains they really wants .



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When a VC makes an investment their goal is to make a lot of money when the company is either acquired or goes public.

Are VC's ok with startups spending money on prime office space when they can save money and rent in cheaper locations or cheaper buildings? They are, why? Because for the startup to have a better chance of attracting the best talent, they need to look good.

Are VC's ok with startups building a game room in the office and having a big recreation area? They are, why? Because it attracts better talent and helps retain talent. These things do not have to make sense to you or me, VC's that are around for decades know better than us.

Better talent means a better chance of the startup not failing like most do.

A VC knows that a better name psychologically helps with credibility of the startup even in order to get other VC's involved or when it has to go public it just will sound better. Potential employees with many options, the type startups usually need, might also be more attracted to work for Monday.com vs MyProjectWorkflows.something

If someone has money and wants to look good instantly, one way is with a great domain. The benefits are big and for now most GOOD domains are priced extremely low compared to their value.

Domainers need to understand better how startups spend money. You will know you understand it when you go to your domain portfolio and review the good names you have and start increasing the price to a fair price.
 
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