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Forbes Asks “Should a Startup Spend VC Funding on a Domain Name?”

Posted on the 01 May 2013 by Worldwide @thedomains

An article just published in Forbes asks the question,  “Should a Startup Spend VC Funding on a Domain Name?”.

It’s a must read article for all domainers.

The article is written  by David Teten who is “Partner with ff Venture Capital and Founder and Chairman of Harvard Business School Alumni Angels of Greater New York. I’m cofounder of the Venture Capital Access Program”

The “ff Venture Capital portfolio is evidence of how much we believe this, e.g., our companies,,,,, and The awesome story of how CEO Joe Fernandez bought the domain is one of many reasons we were excited to lead the seed round in Klout.  I was formerly Founder/CEO of a domain name investment bank, and still own about a hundred domain names personally.”

Here are a few highlights:

“If you’re a VC-backed startup, you should conceal your personal information when you initiate the negotiation process for a good domain name in order to detach the valuation of the name from your status.  However, if you’re an unfunded college student, you should emphasize your current, presumably low-cash, status.”

“”I am comfortable endorsing spending six or seven figures on a good domain name, but only after you have proven a significant market exists for your product, you have achieved product-market fit, and you have either earned a lot of cash in the bank (the best!) or raised tens of millions in venture capital.  It will dramatically lower your marketing costs in the long run. But remember, great dot-com names often sell for well below their market value; it usually isn’t necessary to pay a large sum, because there are few buyers who will pay the highest possible value for a given name. bought for $2,200.”"

“”My recommendation is to start your company with a free or very low-cost domain name, with a strong preference for dot-com.  ”

“Note one of the key ways VCs filter the deluge of companies raising funding is their domain name. ”

“I’m much less likely to even open your deck if your domain name looks pathetic.”

This is the first part of a two part story and as I said a Must read.…

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