advice Well funded startup wants my domain

[Mojoman1234]

I was contacted by a principle from a well funded startup (>$12M), still in stealth mode and about to move into 25k square feet of prime commercial office space. The founders sold their previous company for billions. Let's call the new company "ABC Technology". I own "ABCtech.com". The real name is three characters + technology. (the three characters have industry significance) I used this briefly for tech blog, now just linked to a dormant twitter account.

Their initial offer was $500, "we're just a startup". I countered with: for that amount I'll just hold onto it and maybe use it with my next company, or offer it to "ABC Technology Consultants" who have also expressed interest. I also let him know that I am aware of their financial situation.

He is now asking if there is a price level I am thinking of.

I'd greatly appreciate your advice! What would you do?

 

[cocaseco]

Decide what price you want and tell him. I'm not sure what the problem is?

 

[Mojoman1234]

There's no problem. I was looking for advice on setting a price from you guys with experience doing this type of thing. What would you set as a price if you were in my shoes?

 

[Lite]

I would ask for $15K and will accept offer close to $10K

 

[Nick]

$1 for every square foot of office space they have.

or

Something creative. Example: $X + X% share in their company (if you believe in it)

 

[Mojoman1234]

$1 for every square foot of office space they have.

or

Something creative. Example: $X + X% share in their company (if you believe in it)

I like this! With $12M in funding and the founders' reputation to go on, I guess I could believe in it.

But, Since I only have "tech", not "technology" would that still get the big $? Then there is always the possibility that they might actually want to change the company name to "tech", much catchier.

 

[Nick]

I highly doubt they'd rather print up business cards that say "ABCtechnology.com" as opposed to "ABCtech.com". With that being said, I'm sure they'd prefer "ABC.com" to yours, as well. So, take into consideration what the LLL version is worth, and if it's obtainable, before shooting yourself in the foot. (I was halfway joking about the $1/square foot)

Also, take into consideration what funding round they're in and at what valuation.

 

[NameFu]

I'd wait a 3 - 4 days to give them the impression that you're no longer interested, which if they are really thirsty for your name will worry them a little bit. This also tells them that you're not desperate.

Then you can use these tactics. From what I got from Adam Dicker's Domain Sherpa interview, he uses similar tactics as below:

"Thanks, but I'm looking for more serious offers. If you can meet me some where in the mid $xx,xxx ball park we may have a deal"

If his replied offer is still not high enough, you can then say something like "Thanks, but I'm afraid $xx,xxx isn't enough. I'm not asking for $100k, but if you can meet me somewhere in the middle we've got a deal."

Legal: Use this at your own risk...I don't take responsibility for anyone else's failed negotiations. I'm just sharing some ideas

 

[Mojoman1234]

Thanks NameFu. After that round of email exchanges yesterday, I did find that advice on the Domain Sherpa page. I haven't responded to his last message asking "Is there a price level you were thinking about?" It's been 24 hours already, I'll sit tight.

 

[Mojoman1234]

I highly doubt they'd rather print up business cards that say "ABCtechnology.com" as opposed to "ABCtech.com". With that being said, I'm sure they'd prefer "ABC.com" to yours, as well. So, take into consideration what the LLL version is worth, and if it's obtainable, before shooting yourself in the foot. (I was halfway joking about the $1/square foot)

Also, take into consideration what funding round they're in and at what valuation.

You're right. I'm starting to think before they get the signage up and business cards printed, they may be looking to shorten the name to "ABCTech". I've been using my ABCtech.com email address in my correspondence with him. Looks good to me!

 

[Kostas]

For sure 'tech' is better than 'technology'. Like someone else above said, find out if abc.com is for sale/undeveloped. If it's not available, based on what you said about the startup and the people behind it, $20k-$30k would be achievable imo.

 

[biggie]

telling potentials that you know about their financials is NOT the way to negotiate

because their net worth, may be irrelevant to any budgeted amount for that name.

if you know, then keep it to yourself and negotiate based on that knowledge if you must.


as for how much to ask for, do research on how many alternative names they could select

whois the other extensions registered, if any, and see if they own those as well.

only you know the domain, so only you can set price.

imo....

 

[Mojoman1234]

For sure 'tech' is better than 'technology'. Like someone else above said, find out if abc.com is for sale/undeveloped. If it's not available, based on what you said about the startup and the people behind it, $20k-$30k would be achievable imo.

"ABC.com" is not available, looks like a big Chinese site.

Just checked state corporation registry. They have not reserved "ABC Tech", I would think they would have if thinking about changing the official company name. They could still heavily use the shortened Tech for most usage though.

 

[Mojoman1234]

telling potentials that you know about their financials is NOT the way to negotiate

because their net worth, may be irrelevant to any budgeted amount for that name.

if you know, then keep it to yourself and negotiate based on that knowledge if you must.


as for how much to ask for, do research on how many alternative names they could select

whois the other extensions registered, if any, and see if they own those as well.

only you know the domain, so only you can set price.

imo....

Thanks Biggie. I didn't make a big deal about financials, just that I knew of the company because I had read their funding announcement in the biz news.

Whois shows several different owners of the other extensions, mostly anonymous. .net is named and it's a third party

 

[Joseph Green]

This scenario is the jackpot of domaining. Almost all of my large domain sales ($85,000+) have come from this situation.

It's a little late, but you shouldn't have mentioned that you're aware of their financial situation. That causes them to put up their guard, and it's not relevant to the discussion anyway. If it's public information, they will assume you know. To mention it gives the impression that you're charging them more as a result of it, and no one likes that.

The rest is simple. Quote 1% of their most recent funding round and settle at no less than 0.5% of it. If they raised $30 million Series B, then quote $300,000 and accept no less than $150,000 if you feel generous.

Most often, I'll quote 1% and refuse to budge. In my experience, it may take 8+ months, but they'll pay it.

 

[Mojoman1234]

This scenario is the jackpot of domaining. Almost all of my large domain sales ($85,000+) have come from this situation.

It's a little late, but you shouldn't have mentioned that you're aware of their financial situation. That causes them to put up their guard, and it's not relevant to the discussion anyway. If it's public information, they will assume you know. To mention it gives the impression that you're charging them more as a result of it, and no one likes that.

The rest is simple. Quote 1% of their most recent funding round and settle at no less than 0.5% of it. If they raised $30 million Series B, then quote $300,000 and accept no less than $150,000 if you feel generous.

Most often, I'll quote 1% and refuse to budge. In my experience, it may take 8+ months, but they'll pay it.

Thanks for the advice Joseph. Newbie mistake, which is why I searched out this forum. I couldn't help myself when he opened that door by saying "we're just a startup, can do around $500".

 

[Mojoman1234]

I found that ABCTech is not available to register as a new corporation, due to being too similar the registered ABC Technology. So they would not have to register that as a separate corporate name if they intended to use ABCTech.

 

[DNGear]

is there any chance of buyer seeing this thread??

 

[deflee79]

is there any chance of buyer seeing this thread??

I was thinking the same thing. In the age of information this thread could probably easily be found though it doesn't change thier need to own the domain the negotiations may not be as ideal.IMO.

 

[Mojoman1234]

is there any chance of buyer seeing this thread??

I've not used the real domain, but anything is possible. Not sure if they would be motivated to look here for intel. Any of you think I'm off base with what I've posted? I'll delete if so and thank you for advice received so far.

 

[deflee79]

I've not used the real domain, but anything is possible. Not sure if they would be motivated to look here for intel. Any of you think I'm off base with what I've posted? I'll delete if so and thank you for advice received so far.

I really don't know what links could be made as you haven't disclosed the domain in question so any other obvious links email,twitter may be associated with your acct here. Maybe someone of more knowledge can give thier two cents.

 

[Mojoman1234]

Looks like there are limited editing options here for my posts, so whats here is here I guess. None of my info or accounts used here is connected with the domain in question. I've been somewhat vague when necessary. My feeling is that both the potential buyer and I are new to this, don't do it regularly like most here. I'm not sure why he would seek out this forum, or even search for my research regarding "ABC".
Plus, if they want to buy the domain, no info here should stop that from happening

 

[DNGear]

Well, If they need it..they will buy it at any cost.
If they approach any broker, who would be a NP member.

 

[Joseph Green]

is there any chance of buyer seeing this thread??

Highly unlikely. Even if they did, it wouldn't change anything. The price is the price. They can either pay it or not, and my money is on them paying it.

Quote 1% of their most recent funding round and settle at no less than 0.5% of it. If they raised $30 million Series B, then quote $300,000 and accept no less than $150,000 if you feel generous.

I should add that if you aren't happy with the price that results from 1% of their latest funding round, then your best bet is to wait until they raise another round of funding, become profitable, or they go public. If you don't think any of those are likely, then you might want to sell for less while you still can.

 

[imc]

Tell them, the company name is an independent asset which can add value when the company is sold/acquired or merged with another and thus can get multiples as an asset sale. I use this argument and it has helped me get near price points to my bigger sales.