I was speaking about investing in domain names with my wife’s cousin in an attempt to give a very general overview of what I do and the business of domain investing. He is a finance professional, and one of the questions he asked was about the risks associated with domain investing.

I thought it was an interesting topic, so I’ll share and discuss what I think are the greatest risks to investing in domain names, and I welcome you to share your thoughts on these risks and to add other risks that exist that I missed. These risks are in no particular order, and they may pertain more to my business than to yours. Whatever the case is, I welcome your thoughts.

Risks of Domain Investing:

I read Ray’s post on Hybrid Domainer  today, and think it’s worth a read when you have a chance. There are a number of companies advertising on my blog, and I want to touch on Ray’s article a bit and give a bit of a disclaimer, in addition to the disclaimer I have on my blog already.

In order to be able to spend the time sharing information at no cost to readers, I need to have advertisments. No offense, but I am not going to spend 30+ hours a week on my blog if I am not earning revenue from it. If I was going to spend that much time without being paid, I’d be volunteering at a non-profit organization and not writing articles to help others make money from domain investing. I enjoy writing and sharing, but if there’s no financial incentive, the time would be more wisely spent managing and operating my domain investment business, not helping others build theirs at the expense of mine.

That said, we are in a niche business. There aren’t hundreds of companies

I was checking out the Whois information for a couple of education related domain names, and I came across EducationLoans.com and EducationLoan.com. Somewhat surprisingly, these domain names appear to be owned by financial giants PNC and Sallie Mae (or a related company). It’s a smart move to own great domain names like these.

PNC Bank is the registrant of EducationLoans.com, and Student Loan Funding Resources, LLC (with a Whois contact email @salliemae.com) is the registrant of the singular EducationLoan.com. Unfortunately, neither of these great assets are currently resolving to any type of website. They aren’t even being used for forwarding purposes to these companies’ primary websites.

Screenshots.com shows that both

I read a press release in the Wall Street Journal announcing the launch of a venture capital fund called the Ghost Domain Capital Fund. The business “invests in ‘category killer’ Internet domains that are mostly oriented toward B2B solutions.” According to its website, here is a bit of background about Ghost Domain Capital Fund:

The general partners of Ghost Domain Capital are experts at monetizing the web. The formulas and strategies used to generate significant revenue transend industries and are easily replicated. One of the requirements is a category killer domain — typically at a cost north of $1M.

The company that operates the Ghost Domain Capital Fund is the Ghost Group, “a Southern California-based venture capital firm primarily focused on the emerging marijuana industry.”

I do not have information about investments made by Ghost Domain Capital Fund, although I do have a bit more information about Ghost Group. One of the general partners of Ghost Group is a person named Justin Hartfield, who is the  co-founder and CEO of WeedMaps.com, which reportedly generates $1.5 million in monthly revenue. In January of 2012, I reported that WeedMaps had acquired Marijuana.com.

The company name is pretty cool, and I am interested in hearing more about their category killer domain investments.