Naming your company is going to be a source of a lot of agony no matter how you do it. But there are a few simple things you can do now to save yourself significant pain down the road.
Pretty brave move spending almost 20% of the amount raised just on the name/domain. Retrospectively, do you think a good domain is worth 3-4% of the company (I guess you gave up 15-25% for the $3 million i.e 2.5% to 4.2% for the $500k)?
I think the terms of our first round were $3m with a $20m cap, so a bit less than that, but your math is in the right ballpark.
I think from an objective dollars-spent amount, it was a great deal. If you convert dollars-spent into equity, it's going to seem super-expensive; though the time to control that was when we were raising money, not when we bought the domain.
(Said another way, we raised the $3m before we knew that we were going to spend $400k of it on a domain.)
I guess the other thought here is: if the startup went totally bust, presumably we could still sell pilot.com to someone else for a few hundred thousand dollars—it was unlikely to decrease in value in the near-term.
Pretty brave move spending almost 20% of the amount raised just on the name/domain. Retrospectively, do you think a good domain is worth 3-4% of the company (I guess you gave up 15-25% for the $3 million i.e 2.5% to 4.2% for the $500k)?
I think the terms of our first round were $3m with a $20m cap, so a bit less than that, but your math is in the right ballpark.
I think from an objective dollars-spent amount, it was a great deal. If you convert dollars-spent into equity, it's going to seem super-expensive; though the time to control that was when we were raising money, not when we bought the domain.
(Said another way, we raised the $3m before we knew that we were going to spend $400k of it on a domain.)
I guess the other thought here is: if the startup went totally bust, presumably we could still sell pilot.com to someone else for a few hundred thousand dollars—it was unlikely to decrease in value in the near-term.
Good point. I haven't thought about it - this might be a good incentive (and somewhat hedge) to buy a really premium domain
You got very lucky with this acquisition. Well undervalued. Good for you, bad for the seller.
Thanks! :) :)
And I definitely agree that we got lucky with it.