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?

 

[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.

 

[Mojoman1234]

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.


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.

It's very early for them. First round funding in place, preparing to move into a space, not even firm details on the product, but all indications are it will be a spin of their last venture which sold for $Bs. I'd be OK with 1%!

 

[imc]

It's very early for them. First round funding in place, preparing to move into a space, not even firm details on the product, but all indications are it will be a spin of their last venture which sold for $Bs. I'd be OK with 1%!

Never think for a moment they don't have an alternative. They do. You getting the best price depends on your communication skills, pricing and the eagerness test. If they smell you are eager, they will bring it down.

 

[wayne wooldridge]

Yep, if they feel like they can get it at a steal, that's exactly what they are going to do. $500 as an initial offer tells me they are hoping you are a novice to domaining and will jump at that price. It's a lowball number for them, but just enough to a regular Joe to sound like it's his lucky day.

It's like when you hook up with a new chick at a bar. If you call her the very next day sounding like you're desperate, she will lose interest very quickly, and the less chance you have at scoring. But, if you let her mind wander, she will be the one waiting for you to call and will be more willing to give you what you want.
You have to lead and be in charge of the situation.

 

[NameFit]

Looking at the balance sheet of a potential buyer and thinking that they are 'trapped' has its pros and cons. It may result in huge payoff or it may just results into nothing. I have taken those risks but in general had not been fruitful. I know many well known domainers take those risks and there are often headlines about such sales in forums, blogs, newsletters or what not.

Have this thought come to your mind that you could be treading into the UDRP case territory. A name that is not generic (if you say it is three letters), you probably have nothing to do with that technology (except a blog as you mentioned), Similar sounding name ('tech' and 'technology'). If they are a startup with so much financing, they probably have TM'ed their assets.

I would look at the inherent value, hence market value of the name as well. Besides the current buyer - how many potential buyers you have. I have had names which I thought nobody would buy (I do have records of all the inquiries I have received over 15+ years of domaining). I have accepted a reasonable offer on such names (anything above $500) if such offer came along.

 

[Mojoman1234]

Have this thought come to your mind that you could be treading into the UDRP case territory. A name that is not generic (if you say it is three letters), you probably have nothing to do with that technology (except a blog as you mentioned), Similar sounding name ('tech' and 'technology'). If they are a startup with so much financing, they probably have TM'ed their assets.

The three characters do have big significance to the region and many technology businesses in the region. I am in tech myself, which is why I chose the name in the first place, have used it in the past and may very well use it in the future. This offer came out of the blue, although this scenario did cross my mind as a possibility when I read of this new firm with the very similar, but not as catchy name.

RE: UDRP. I registered and began using the domain three years ago. This new firm incorporated late last year. Wouldn't that work in my favor?

I don't think they are "trapped". I know they want the domain, and I'm prepared to sit tight with it unless I get a significant price for it. As I told them, for $500, I'll just keep it for my own future use or open it up to other potential buyers. That was my last communication to them. I haven't responded to their question of "is there a price level you're thinking of".

I don't "need" to sell it, but it could be a nice windfall.

 

[NameFit]

As I told them, for $500, I'll just keep it for my own future use or open it up to other potential buyers. That was my last communication to them. I haven't responded to their question of "is there a price level you're thinking of".

That is very good approach - want to sell but not keen, and do not mind keeping it. Basically you told them that market value 'to you' personally is more than $500, hence moving them up a notch.

It would be interesting to see how things turn up in this scenario.

 

[Paully]

I don't generally like the concept of pricing things based on how much somebody looks like they can afford but a good sales opportunity like this doesn't come around every day so I understand why people do it.

I agree with those saying that you shouldn't tell somebody you are negotiating with that you know how much they can afford, but in this case it probably was justified as they were claiming to be a humble start up.

Gotta say though this happens often and what amazes me is that

(A) People name their startups before locking down the domain name.
(B) Others give them money without asking if they have secured an appropriate domain name.

It's not like they are not tech people !

 

[imc]

I don't generally like the concept of pricing things based on how much somebody looks like they can afford but a good sales opportunity like this doesn't come around every day so I understand why people do it.

I think you are wrong there. Your claim tries to ascertain that there is a fixed value with domains.

This article has a lot of irony in it.
http://venturebeat.com/2013/08/21/i...d-to-zuckerberg-but-is-cool-with-the-changes/

 

[Joseph Green]

I don't generally like the concept of pricing things based on how much somebody looks like they can afford but a good sales opportunity like this doesn't come around every day so I understand why people do it.

It's analogous to buying a home in the middle of nowhere and then Universal Studios deciding to build a theme park with hotels, shopping malls, and rides nearby. The value of the home went up.

RE: UDRP. I registered and began using the domain three years ago. This new firm incorporated late last year. Wouldn't that work in my favor?

As long as you don't put up ads of theirs or their competitors on the domain and you don't get a loony UDRP panel (rarely happens), then you have nothing to worry about.

 

[Paully]

I think you are wrong there. Your claim tries to ascertain that there is a fixed value with domains.

This article has a lot of irony in it.
http://venturebeat.com/2013/08/21/i...d-to-zuckerberg-but-is-cool-with-the-changes/

Wrong? What are you talking about? How can an opinion be wrong? You may not agree with it, but that doesn't make it wrong.

Try reading my post again. It seems to have flown over you I said that "I (meaning me personally) don't generally like the concept of pricing things based on how much somebody looks like they can afford, but a good sales opportunity like this doesn't come around every day so I understand why people do it"

I didn't say anything about domains having fixed values. .I do believe that a domain's value generally falls within a particular range based on factors such as age, length, traffic, demand, or previous sales etc but that range can be very wide, plus of course, other factors such as seller or buyer's motivation and right place right time luck come into it but how much money your potential purchaser has shouldn't (but does).

 

[Paully]

It's analogous to buying a home in the middle of nowhere and then Universal Studios deciding to build a theme park with hotels, shopping malls, and rides nearby. The value of the home went up.

The land the house is on may have increased, but that value still falls within a particular range that should be the same no matter who is buying it. A rich man is more likely to pay over the odds for something he wants, but most rich people (that earned their money) are not stupid and know the value of what they are buying and, what is an acceptable premium to pay.

What the OP has to gauge is what that acceptable premium may be based on what other equally or almost as good alternatives are available

 

[The New Guy]

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

They used the "We're just a startup" line to plead poverty and get the domain name cheaply. The OP responded appropriately in this case because it removed their ability to falsely claim they don't have the resources.

 

[Joseph Green]

A rich man is more likely to pay over the odds for something he wants, but most rich people (that earned their money) are not stupid and know the value of what they are buying and, what is an acceptable premium to pay.

Exactly, and that's why they understand the value of the domain to their business even better than the seller. That causes money to be left on the table.

The "fair market value" means nothing to them if they can earn a multiple of that within a month of using the domain name. They might try to get a fair price, but they aren't going to walk away from a higher price that they can afford. This assumes they are buying the domain for their company website.

 

[imc]

Wrong? What are you talking about? How can an opinion be wrong? You may not agree with it, but that doesn't make it wrong..

Well, my statement was also an 'opinion'.

 

[Mojoman1234]

What the OP has to gauge is what that acceptable premium may be based on what other equally or almost as good alternatives are available

Thanks to all for the continued discussion and feedback!

Just to reiterate: ABC Technology owns ABCTechnology.com
They also already own or not available:
ABCTechnology.net, org, info

I own what I perceive to be the most attractive/marketable alternative: ABCTech.com