What If An Investor Funded You

[dnrabbit]

It is safe to assume that most people on the forum have limited capital and hence the risk appetite to buy high-value names is finite.

With so many startups getting funded these days, what if an investor came to you and proposed a funding of say $10 Million for investing in domains?

Would you do anything differently?

How would your buy/sell strategy change?

Do you think $10M is enough to make a difference?

Would your % Expected Return increase?

 

[Kate]

To get funding you need a good business plan. Otherwise you will struggle to get funding.
If you don't have a very solid, convincing business plan you need at least a good personal history. If you have achievements to show, you will be taken more seriously.
Some serial entrepreneurs have no problem getting funding, because they have launched successful businesses previously, and they got it right most of the time.

There is a lot of investor money flowing into the domain industry right now, in new TLD registries but also in the proven stuff. Investigate.

 

[Grego85]

To get funding you need a good business plan. Otherwise you will struggle to get funding.
If you don't have a very solid, convincing business plan you need at least a good personal history. If you have achievements to show, you will be taken more seriously.
Some serial entrepreneurs have no problem getting funding, because they have launched successful businesses previously, and they got it right most of the time.

There is a lot of investor money flowing into the domain industry right now, in new TLD registries but also in the proven stuff. Investigate.

Cryptic as usual Kate.

I think I have a light crush on you

 

[BrandingModel.com]

A smart investor would invest with an experienced domain broker or domainer who has a proven track record of ROI domain sales... IMO

 

[SpareDomains]

I can't speak for starting in 2016. But when I started to get serious with domain sales 2003 I continually reinvested profits back in as the goal wasn't that years revenue as I had enough cash to float the bills without taking any of the profits down, it was more of a big picture many years out plan of profit, reinvest, expand which has not only included domains but quite a few developed websites as well. Can never have a partner that sucks if you continually reinvest in yourself from day #1 unless you hate yourself.

So while I believe I could do well with someone else's funding I tend to do a lot of my own work as a perfectionist and not sure I would do well with a partner unless they gave me full reign with a longer term objective over I need a return in 2 months as I tend to think big picture reinvest expansion over immediate returns.

 

[namerav]

With that kind of amount you can do plenty of things in domaining. But make sure to use good skills/knowledge to purchase/sale domains.
Percentage of Returns: Maybe 10-20% Good Business, More than that percentage: Awesome Business

 

[theSun]

Yes, I will transform domaining into v3.0, fund me. I have the master plan.

 

[campout]

Here's the Balls of Steel move:

Buy the remaining unregistered 5L.com Chips. There are about 1.15 million left. Multiply by $8.37 per name with Discount Domain Club (if you can't negotiate a lower price) = $9,625,500 price tag.

Cross your fingers.

You might have $10 million or more profit overnight, and a happy investor.

If all goes south, use the remaining $374,500 to create a new identity for yourself FAST.

 

[dnrabbit]

Here's the Balls of Steel move:

Buy the remaining unregistered 5L.com Chips. There are about 1.15 million left. Multiply by $8.37 per name with Discount Domain Club (if you can't negotiate a lower price) = $9,625,500 price tag.

Putting all eggs into one basket?

 

[domainerfella]

I will repeat what I did but in a large scale this time.

 

[Genius327]

If an investor gives me $10M for an indefinite period of time, I will give them $30k each month or $360,000 annually, guaranteed for lifetime! All legal and white money in your bank.

 

[jkm]

I would divide investments between LL.com, LLL.com and some one word .com. Keyword domains for development.

 

[bazabizo]

Well, I have an interesting story in that front!
I made a business plan last year and approached a couple of investors. None of them is a worldwide known one, but these smaller investors I knew before within my network.
It wasnt a big failure, but I wanted to raise $500K to be able to do domaining full time and leave my lucrative full time job. I wanted the amount to come from one investors to ease accounting and decision making as we move onwards. I got a $75K offer from 1 investor, as domaining was all new to him, then I got $150K from a crowd funding platform. Thats all, all the rest were very afraid to try out something new like domaining.

The business plan included development of some domains as well. All the feedback was great about the business plan itself, as I am used to doing such plans being a territory sales manager already for years!

I think by now if retried doing the same, I can get a better amount since I got some decent sales last year, but I am getting promoted in my job this month, so this $500K should be $650K now to make it feasible.

There are lots of components in a business plan. Taxes, where you are, what you are doing professionally now? Your communication skills, risk factor, return, how many people are going to be in the startup? You must be aware of the process of establishing a company.

An investor can be ready to invest a million in domaining but he must make sure you are solid in planning and execution. This is not a game, this is business!

1% of the people in this forum can have a chance with a good network of investors. The rest need to work on enhancing the above! Myself, I need a better network of investors, thats based on the feedback I got in general!

When an angel investor has 100M to invest, he can throw a million in something a bit risky. but the ones I approached had 5M all in all in average each. So to get 150K in something very risky for them, I think I was doing well

Dream, have ambitions and everything, but be humble and self critical to learn to develop and be able to convince an investor one day!

Good luck everyonee

 

[slimjim270]

@dnrabbit -

Earlier I mentioned hiring talent for 3 specialist teams... Acquisition, Sales, Development.

Additionally, I would stay focused on "The Triangle"... Park, Build, Sell

1) Park - initially park all acquired domains to start generating cash flow. The quickest way to broke... is to burn thru your liquidity and not have any cash coming in to slow the burn rate. Yes, I agree that parking hasn't generated as much return lately... but a little bit of something... is better than a whole lot of nothing. An eye on burn rate is key.

2) Build - the more value you add to a name, the greater the value proposition available to present at the sales stage... and hopefully... the better GP (gross profit) you will generate per asset when it is sold. From your acquired domains, focus on building out sites in industry sectors that are thirsty for growth and already advertise on Google Adwords. These are known entities that invest $$ in their marketing and are qualified prospects.

3) Sell - hire the best domain sales talent you can find. Plenty of skilled talent right here on NamePros. Put each on an accelerated (tiered) commission plan. For example, at 3X GP they get 20% commission, at 5X GP they get 30% commission, and at 10X GP they get 50% commission. Always give a sales person motivation to motivate themselves. The most successful commission plans are designed to "motivate for the behavior you seek". Flat commission rates suck! Top sales talent should not feel like a squirrel on a treadmill wheel. They should feel like they are getting something EXTRA for every extra sale. When they hit a higher gate, they should have a retroactive rate increase boosting their overall effort even higher. Also add a monthly bonus that is presented to the top monthly GP provider. Top sales talent is competitive. They especially enjoy competing with other talented individuals.

-Jim