Domain Investment Club

[billinchina]

Usually in investment clubs, 5 to 10 people get together and donate $50 a month to a common pool for buying stocks. Maybe a couple of us could get together and contribute to a common PayPal account each month and then look for a good domains in our spare time. After a few months (when we get a few thousand dollars), we could buy one of those really good names we found available in our spare time (voting would take place of course). Keep doing this... Then when we sell a name, the proceeds go into the common Paypal account. PPC rev. also goes into the common PayPal account. If you want out, you get your share of the assets (if they are tied up in names, you'll have to wait until one sells to get out). Must have a 1 year commitment which is renewable every year. Must give 60 days notice before club membership expires if you want to get out (or suffer penalty). Common PayPal account should be managed by third party to keep thiefs from stealing others money.

I think it would be fun for 10 or so of us regulars to get together and do something like this... We could probably make arrangements with an escrow service to handle our PayPal account if we agree to use their service in the selling of our names.

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I will revisit this thread on Wednesday, June 16, 2004 to create a list of those who are serious.

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Update on Friday, June 18, 2004

Here is the list of who is interested so far:

billinchina
-RJ-
SY4
maddogsplace
Redleg
silverman567
filth
redhippo
bensontwenty
johnny6
rabid_nerd
companyone
spikedo
FMS
todalen
DomainOgre
domainlab
brassneck
4u-domains
dgaussin
Terry
Darkfire001
Sell-Web
Grrilla
ezimedia
painperdu
rube08
AdsenseGuy
ajibra

Please let me know if you would like to be added or removed.

Here are some basic rules for the domain investment club. Please provide feedback and help shape this into something useable.

Domain Investment Club Rules

1) Each club will have 20 members that all agree on:
a) The maximum amount the club will save until they buy a name.
b) The monthly amount they will contribute.
c) Which escrow service to use. The escrow service must agree to accept 20 separate payments and make 20 separate disbursements.
d) Who will place the offers on behalf of the group and deal with the escrow service.

2) Each member will set aside an amount of money in their own personal or business PayPal account each month (think of it as a piggy bank).

3) Every week, each member will provide at least 1 suggestion of a name for the club to consider buying (max 10).

4) When the club saves up enough to buy a name (maximum amount needed to save), they will vote on which name to place an offer on.
a) Every member will rank their top 30 picks at that time.
b) Every member will transfer their money to the escrow service.
c) A 7 day offer will be made to purchase the name with the most votes. If the offer expires, the process of voting will be repeated 7 days after the offer expires. This will continue until a name is finally purchased.

5) When a name is purchased, the group will vote on what prices to specify.

6) If an offer is received, the group will vote on whether to accept or decline.

7) When a name is sold, 20 equal disbursements will be made (1 to each member).

8) The name(s) will be held in an account monitored by escrow service and listed on all major exchanges (unless exclusive agreements restrict it. ex. Showcases).

I was going to send PMs out to everyone, but there is a time limit between sending messages that makes it impractical.

 

[brassneck]

I have just seen this and am also very interested in this if there is still room - I have seen some really good ideas here.

Stephen.

 

[4u-domains]

Count me in as well.

This will be a headache to work out in reality.

You definately need people who can commit for the long term.
Domainers come and go. If they left we would have to decide a formula for the appreciation of their investment up to that point. That would be a logistic nightmare so it might be easier to say that you only get your money back or even nothing at all.
We cant sell a domain the rest have bought for the long term to start paying off people who leave !

As we are dealing with people from all over with different financial situations, I suggest the following:

• The club is seperated into 100 units.
  Each unit costs $20
  Members are able to purchase up to a maximum of 5 units. This allows members to own a share according to their financial position.
  Once the quota is filled nobody else can join except in the circumstances mentioned below.
  This gives the panel a guaranteed $2000 a month to play with.
  The panel is made up of al members and each has an equal voice and vote on the panel regardless of the number of units held. We cant have some members with a bigger voice than others.
  A club president should be voted for by the panel as we would need a single voice to organise things.
  Two further deputies should be voted in to ease the workload on the president.
  A seperate club 'secretary' should be voted for. This person handles all the money. Makes sure all subscriptions are met, chases up members for payments.
  Money to be held in an independent, secure account. Monthly direct payments to be made by a member. It might have to be paypal due to the intl nature of the board. ie. a UK member will not be able to make a direct debit into a US bank account AFAIK.
  Members wishing to leave are able to resell their membership on to prospective members.
  Prospeective members join a published waiting list.
  The leaving member negotiates a price with the prospective member at the top of the list.
  If they cannot agree a price the leaving member's place is offered openly to auction.
  The price will be set by the usual market rules of demand and supply. The price paid will be purely down to the judgement of prospective members. They should take into account the amount of money paid into the club by the leaving member and their percieved value of his unit share the clubs assets at that time. (The domain portfolio)
  The domain portfolio is publicized at all times.
  Leaving members can sell all their holdings (max 5 units) or one unit at a time.
  These new members are commited to carry on the monthly subscription that they bought (1 unit = $20/month)
  At the end of each month the $2000 can be used to purchase one or more domains, carried forward to perhaps purchase a more valuable name at a later date and so on.
  All purchase decisions or non-purchase decisions are discussed and voted for on a monthly basis by the whole panel/club.
  Should a particular bargain come up in the middle of a month and there are existing club funds then all club members will be contacted and a possible purchase voted on as above.
  As the total units equal 100 , proceeds are easy to apportion.
  After each domain sale, a majority vote will have to decide if we split the proceeds according to units held, proceeds to be reinvested back into the pool or a part therof. Bear in mind , if we split the sale out at that point they will be lost funds. We would have to wait for the next round of monthly payments before we can buy anything else.
  Domain holding registrar will have to be decided upon by the whole panel.
  All transfer, escrow, renewal fees, etc are met by the clubs funds, of course.
  Most of these questions can be decided by a poll being posted.Majority rules.
  A seperate section on the Namepros forum will be used for the club. Suggest topics: Portfolio (locked), Membership waiting list, Club rules and procedures, General questions and help, Club members (private?)
  Innitial membership to be taken off the domainers who have already posted an interest. If everyone takes up a max 5 units share then that would be 20 members.
  The number of units and unit cost can be negotiated before start-up. We could make it $10/unit to further help those with smaller budgets. The number of units could be increased to 200 to allow a bigger spread of membership.
  A chronological list of interested parties should be posted up at the start of this thread and added to as we go.
  Club membership documents will have to be drawn up by a legal entity and the cost of this will have to be met by the first month's payments. (The date of payments to be agrred upon. probably the first day of the month)

Well, thats my bit over.
I think this answers the problems over those wishing to leave due to a change in financial status or otherwise.

All in all, its quite exciting.
Very early stages this, anybody watching and not posting, please make your thoughts known !

 

[dgaussin]

Interresting too, depending the terms and the monthly fee

Thanks,
David.

 

[Tippy]

Isn't it a bit scary having a running balance with PayPal? Isn't there also a cap on transactions, like 2k/mth before PayPal needs tax info or something like that?

Mike

 

[4u-domains]

Hi Mike

You may well be right.

Paypal is one example. We need people to come up with more examples of payment facilities that offer multiple monthly payment subscriptions into it and can be entered/paid into from all over the globe as the membership dictates.

I'm not experienced with non-paypal alternatives but I fear they are few and far between.

Hopefully , we can come up with a compromise.
Paypal is great between domainers/traders of trust but as a standalone security and payment portal it leaves a lot to be desired.

Possible Solution:

The club secretary (in charge of money) opens up an a straight forward account in a US bank. They would then be responsible for collecting all the members payments from whatever source they are paying into. Its not ideal , its time consuming but it might be the only avenue to pursue.

Either way , all members will HAVE to set up a standing order/monthly payment.
This provides the secretary with a more manageable income scenario and aviods the pitfalls of members forgetting to pay the money or being on holiday, etc.

The money issue is going to be the biggest headache to sort out.

 

[rabid_nerd]

The secretary takes minutes... The treasurer is in charge of money

<< Councilman Riede

Also.. There's always someone with a merchant account.

 

[4u-domains]

Ha.

Here in the UK a 'company secretary' is a very important person and required by law and at the centre of the decision making process ! Usually a qualified accountant.



Not to be confused with the bird with big tits who does the typing.... :D

Anyway, I concede, its best to talk 'American' on an international domain board so Treasurer it is !!

 

[domainlab]

Just a thought...and I don't want to get too legal at this early stage but I presum that any club would be subject to the equivalent of capital gains taxes in the US or the UK.

I am based in the Channel Islands where there is no capital gains taxes of any kind - as the common aim is obviously to sell for great profit it always seems a shame to give away a chunk of that profit to the tax man.

 

[Anthony]

I like the "units" idea previosuly mentioned. That would make the club available to people in different financial situations. It's like a percentage sharing alternative.

 

[Page Howe]

Good to see this thread.

if i may, some thoughts:

the basic premise i have explored in suggesting this type of fund is this:

i would do it for the big names...if the answer to this question is yes:

would i be willing to be in a group that outbids all others for a name, to insure i could be a part of it in a small way.

a real world example - last week salarys.com went for $4600. would our fund be willing to pay up to $6,000 (given that each of the members would only be on the hook for a part of the name), hoping to sell later for more.

now i may not like salarys for $5k, but i think its a good name if i could only own 10%. This type of risksplitting has been done in the oil business for years.

i have some more ideas and would like to be invited in further discussion. I have raised funds for public companies before and would do the same for this venture.

i could also act as an merchant banker for the fund if we did some specific projects. i would bid on pool and buy a name for $20,000, if i had ten $2,000 committments. I would front the $20K and then refill our partnership account as peoples moneys came in...ready to buy a new name. i think at this time i could also allocate one share in the name to be carried for the beneift of those who work to build the site, or to that person who brings in the buyer.

please be aware, this type of fund would bump prices a little for those of us who buy names ourselves.

my recommendation for trust accounting is simple, set up the most transparent accounting possibly where each partner could access (not transact) the account data at any time.

anyway, glad to see this thread.

page howe
sitehq
931-723-2300
[email protected]

 

[Terry]

I would like to know more as this unfolds. I can handle the $50/mo. but not much more.

 

[4u-domains]

Good input , we need more of that.

$20,000 would take 10 months based on the previous premise.
I envisage that the members would most likely keep rolling the $2000 monthly payment until a bargain is spotted.
This is unlikely to last more than a few months, such will be the excitement ! :blink:

We have not got to name buying strategy here yet , its a bit early for that perhaps.
However , I would suggest that it comes down to 3 different types of names.

1. Short - 3 letter .coms, these are a known quantity and perhaps the easiest of all names to appraise and therefore the easiest category to spot a bargain. The turnover is excellent.
2. Premium one word .coms - These are harder to sell but the rewards can be good. Not as liquid a market as 3 letter names.
3. High traffic names - This involves a lot of research. They are perhaps hard to sell on for a decent profit BUT the names will generate income as we would surely be parking all the club's names at a top PPC venue.

We can worry about all this when we have everything finalised but I guess there is no harm in discussing different aspects of every part of the clubs future.

Its a shame we dont all live within 5 miles of each other, we all need to sit round a large table... :D

Maybe someone, the designated project leader, should organise a time when we call all meet in the chat room.

 

[Darkfire001]

$20/Month should be the minimum for each share since that keeps the money/Member ratio at a good level, and I know that would let alot of Namepros members join this scheme. I would personally be willing to go up to $50 or even $100/Month.

Also how long will the gauranteed commitment be if any? 6 Months? 12 Months? 24 Months?

This sounds like a great idea, but I think someone with real world accounting expierence might be the best person to manage finances.

I am defintley interested in this, so count me in

 

[Sell-Web]

Stick me down, sounds very interesting.

 

[4u-domains]

Welcome Sell-Web..

A new member has signed up on the back of this idea, cant be a bad thing !

The numbers are building up, at some point somebody might be dissapointed if they are told there are too many already...

Heck, I might be one of them. :]

Anyway, this could be Club 1.
Others can always open a Club 2 and so on.
Could be very interesting and a bit of internal competition !:hehe:

 

[Grrilla]

I'm interested- sign me up.

 

[ezimedia]

HI

Here are few ideas,

1) would egold be a possible option to use to handle members payments
as anyone can open an egold account for free....

2) I would recommend we make a time and date for all to meet in a
chat room, that supports text typing and voice so we all can voice our
opinion, We can use a free service like Paltalk.com where you can make
rooms for free and password protect them,


Also thanks to 4u-domains for the great detailed post.. it really
gives us all a wider view of how we could manage getting this idea
off the ground...

Im still interest

Thanks
Tom Dahne

Expired Domain Spy
http://www.expireddomainspy.com

 

[painperdu]

I'm interested.

 

[Anthony]

Can we get an update on planning issues for this?

 

[rube08]

I am interested. Sign me up