.tv HELP - Phased TV purchase

[GoneWalkabout]

I had a bunch of highly motivated start-up guys contacting me to purchase one of my two-letter names.

After some negotiations we agreed a price of $10k, but they would prefer to pay $2k now, $3k in 12 months, and $5k in 24 months.

That way they don't have a massive outlay at start-up which enables them to get on with making the project a success. If their project works then they will not be financially strained to pay the remaining $3k and $5k. If the project is a flop then I keep the name.

Has anyone ever done anything like this. Can they give some tips and pointers.


ALSO: What is the best method for me to keep ownership and yet they have control of the name.


Could do with any advice on this one.

 

[Keith]

Sounds risky but perhaps you could check into leasing them the domain until they have all the cash.

 

[glaxxon]

Have a solid signed agreement.
DON'T transfer the domain, just change nameservers to point to their hosting.
This way you'll hold the domain while they can use the name too.

 

[donnied79]

Jimbo IMHO if you agreed on 10K for the domain but they want to pay in 2 years they should give you at least 2K more.
Like 2K now, 3K in 12 months and 7K if they want to keep the domain (so they have to pay more only if they keep the domain).
From a legal point of view I had a chance to talk about it with a lawyer.
If the buyer it's in your country it can be quite easy to make a legal agreement. If they are not in the UK it became harder because if you have a legal agreement and they broke it up it's hard to have the domain back (it's not impossible but it will cost you a lot of money and time).

 

[Makis.TV]

Its too risky, I was asked something similar and they wanted me to transfer domain too so it didn't work out.
If you feel comfortable(I wouldn't) then don't you ever transfer domain to them.

Also be careful because if they build a brand on your domain they can apply a tm case.

 

[GoneWalkabout]

Thanks for the input so far guys. Much appreciated.

Buyer is in the US.

They are happy for me to keep ownership of name until final payment.

 

[garptrader]

As someone mentioned, come to an agreement first regarding a payment schedule, change the nameservers but retain ownership until the payment schedule is complete.

 

[Keith]

http://leasethis.com/

 

[vincenzo]

Sounds like an opportunity for Sedo or Escrow.com to offer this type of service.

- V

 

[jwdomain]

Leasing a domain name to another corp until they can/want to buy it is nothing new. Usually the lessee monetizes existing traffic with an offer of some kind, maybe even a simple affiliate offer(s). This is different in that the lessee is a developer, and you are in different countries, but i think a cross-border "rent for 18 months with an option to buy at $xxxx at lease termination" could be put together with a lawyer that the prospective lessee hires and pays.

 

[ThreeD]

1) Make sure the name stays in your name until you have received FULL payment. It doesn't matter if it takes them 1 day, 1 month, 1 year or 10 years. When they have paid what they owe you it's time to hand the domain over.

2) If they pay you $2K upfront start with a nameserver change that resolves to their needs.

3) Once their project is developed and fully up and running, make sure they make the rest of the payment.

4) A very detailed contract agreement is essential to avoid future problems or hick-ups.

Good luck, James

 

[claudedauman]

I believe escrow.com offers such a service, but only for larger purchases, but I don't recall their minimum.

I am not a lawyer, but if the buyers are local and you keep the financed portion at or below the limit for small claims court, you may be able to use a contract and to rely on small claims court in the event of a breech (please talk to a lawyer on this approach)

Good luck!

 

[ipodxpert]

In addition to all the points discussed above just make sure that they are not putting anything offensive (porn) and/or infringing on trademark of other company. You being the owner of the domain name people may come after you legally for tm infringement.

Good Luck.

 

[GoneWalkabout]

Thanks everyone - and especially those who made the effort to PM me over their own experiences. I didn't realise this kind of arrangement was quite as widely used as it patently is!

All in all, I think the phased payment / lease / rent to buy option sounds like a WIN WIN situation for all concerned. Although it is VERY obvious that a well formulated legal agreement needs to be drawn up to make it happen effectively.

I my particular case the other side are already trying to get the initial payment lower and are already moaning / expressing fears about their lack of control for their project.

At the moment I am out of the deal, but I think they will come back when they realise this is a very good deal for their start-up.

Regardless of how it turns out in this instance, the whole system sounds like a great way to make a good use of names without bankrupting the buyers (in the case of a start-up), getting a good price, and if done properly, keeping hold of a name until it is finally paid for in full.

I think the 'types of use' during lease/rent phase are a vital element to have in any agreement.




Having said ALL that, I'd still rather have the straightforward cash - but I've learned a LOT from how enom operated their PREMIUM name system!!!!


Thanks once again. It is very much appreciated.

 

[cabletv]

Sounds like an opportunity for Sedo or Escrow.com to offer this type of service.

- V

Sedo does offer financing as Ive heard, they keep the domain in their own name as the owner, untill all payments go through. If the buyer misses one payment by a certain number of days, the domain goes back to the seller AND he gets to keep the money that was already paid

 

[DnEbook]

written agreement ............lease to buy signed by both parties while retaining ownership until final payment

 

[snoop]

Would be offering a lease with a buy out option, definitely wouldn't be transferring it before full payment. If they don't have the 10k now there is a pretty reasonable chance of default so be strict on payments etc. Have had this kind of thing where they make the first couple of payments then the project doesn't do so well and later payments are not made. Just change the DNS for them.

 

[domainacrobat]

You should take their first born child as insurance.

 

[John Slaney]

Jimbo,

What could you do with the domain if you spent 10k over 2 years on it?
How much revenue do you think it could make?

I think you have the opportunity to pull a Rick S and get a percentage of revenue. Why let them startup a business using your domain and basically finance the domain purchase for them without getting a benefit out of it. If they have a great idea, it could work out well for everyone.

Lease the domain over 3 years 10000/36=278 per month and x% of revenue.
After 3 years they get the name and you keep getting a royalty.
You are helping them keep their startup costs down and you get a part of the revenue for allowing them to use the domain instead of selling it now and using that money to generate your own income.

Of course you would have to have a lawyer go over everything - but it could be a better long term play.

 

[vincenzo]

Sedo does offer financing as Ive heard, they keep the domain in their own name as the owner, untill all payments go through. If the buyer misses one payment by a certain number of days, the domain goes back to the seller AND he gets to keep the money that was already paid

That's interesting - any idea what % interest rate they charge?

- Vincent