Startups that use a strong brand name that is also a commonly used term may face a difficult conundrum before they launch. They can either spend what seems like a huge amount of money to get their exact match brand .com domain name, or they can settle for something else that is more affordable.
Some choose the later, and they pick .com domain names with words in front or behind their brand, and others choose non-.com domain names. Although these domain names may be sufficient, they may also be short-term fill-ins, especially if the company grows or pivots and the domain name no longer completely represents what the company does.
If a company is successful, they will likely need to buy the exact match domain name at some point in the future. When that time comes, the domain name will likely be much, much more expensive. The company has essentially created goodwill around a .com domain name they don’t own, and this may make the domain owner less interested in selling, especially if the buyer has 7, 8, 9, 0r even 10 digits in funding and value.
Two easy to find examples include Uber buying Uber.com and Tesla buying Tesla.com. One could argue that neither company needed the exact match .com domain name, but the original UberCab.com and TeslaMotors.com domain names weren’t exactly what the brands have become and their acquisition prices were likely small relative to what they are worth to those brands.
Although buying the exact match .com domain names might not make sense at the beginning, startups should do what they can to try and get these domain names. Some options to secure their exact match brand .com domain names include the following:
- Acquisition for cash
- Acquisition for cash + equity
- Acquisition for cash + services
- Purchase an option to buy a domain name at a set price in the future
- Financing using their bank or a company like Domain Capital
- Payment plan using an escrow service or their law firm’s escrow service
- Lease to own using an escrow service or their law firm’s escrow service
There are many options available to companies that don’t have the means to acquire a valuable domain name at the time of launch. Most of these will likely require an attorney to handle the legal terms, especially if a deal is going to take a while to complete.
.Com domain names are not the be all end all, but for most companies, they are important.