Article on Forbes.com about domain names and startups is worth bookmarking to refer potential domain buyers to as a reference.
David Teten, a partner with ff Venture Capital, has published the second part of a story on Forbes.com about startups and domain names.
It’s a good primer on how companies can get creative when acquiring domain names.
It explains how one of ff Venture Capital’s portfolio companies, Plated, worked out a lease with an option to buy Plated.com:
Buying a domain name is like buying real estate – capital-intensive and risky. The last thing a startup needs is MORE risk. That’s why our portfolio company Plated.com decided to structure a lease option – they offered the prior owner a small monthly lease fee for 1 year, with an option to buy at the end of the year. This way, if the business was thriving and Plated had managed to attract capital, they’d be able to purchase the domain outright. If not, the current owner would earn a healthy rent for his (as of then unused) domain and would still retain ownership.
Plated ended up exercising the option to buy the domain.
Teten also discusses the option to give equity as part of payment for a domain name.
The article extensively quotes domain investor Braden Pollock and refers to a number of well known domain brokers.
This is a good article to send to a startup that reaches out to you about a domain name but balks at the price.
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