A Real ‘Love’ Story
Negotiating a Domain Name Acquisition For a Start-Up
Marksmen has performed thousands of domain name acquisitions for clients around the world. In this case, we were asked to acquire a domain name for a startup that recently appeared on the reality TV show Shark Tank.
In this particular case, the client had been in touch with the domain owner five months earlier through a third party and initiated a brief discussion regarding the owner’s sell price. However, the owner disappeared suddenly before any transaction could be finalized. The end goal for this case was to secure that same price point from the owner, if at all possible, while being sensitive to the fact that there was already tension associated with this negotiation. Bottom line: make sure that the owner did not disappear again before the domain transfer could be concluded.
Insights & Approach
Marksmen typically begins a domain acquisition case by tracking down the owner of the desired entity and then negotiating a sale price based on the client’s budget:
- Several decisions had to be made throughout the acquisition matter with the end goal that the owner would not be spooked into disappearing again, beginning with the initial approach.
- The registrant of the domain was only a host provider and not the actual owner that the client had previously contacted. While we knew how to reach out directly to the owner from that previous email exchange, there was no indication with the domain that pointed to that particular person as the owner. We decided that a fresh approach would be best here. So, we resolved to reach out with a simple inquiry to the host provider listed in whois to get the dialogue rolling forward and point us in the direction of the actual owner; an additional, but necessary, first step to begin the negotiation process on a clean footing.
- After a few tries, a response was received from the actual owner, welcoming our inquiry and asking us to make him an offer.
- At that point, a decision had to be made on an initial offer amount. We had the insight of the previous negotiation with its end results to guide us, for better or worse. There was heavy concern that an offer too low would cause the owner to disappear again, but an offer too high would move the owner to ask for more. Ultimately, we decided on an initial offer amount that the client felt might be too low, but we estimated be enough to at least get the owner to respond.
- Happily, the owner did respond with his previous price point.
- We accepted his price and moved forward with securing the transaction through an escrow service.
- At this point, we had to convince the owner to convert the price point from EUR to USD (a US banking requirement), after he had already proactively initiated an escrow transaction in his native EUR. He was agreeable, so we re-initiated the escrow transaction in USD and kept the ball moving forward with him at an amicable pace.
- We then began the domain ownership transfer process, which proved to be more complex than we had hoped. What should have been a same-day internal process at the owner’s registrar ended up taking over a week to complete due to his delays. This again made us anxious that he was getting cold feet and considering backing out of the deal.
- The transfer was finally completed, and the domain was secured under Marksmen’s account.
- At this point, unfortunately, we had two final hurdles to overcome. The registrar had placed a 60-day lock on the domain after the internal account change. This meant the client had to wait until that lock came off for us to transfer the domain to their preferred registrar. Meanwhile, the current registrar’s internal transfer process broke down with some unknown privacy issue. As a result, we kept hold of the domain under Marksmen’s account for the 60-day period, forwarding the domain to the client’s primary website from there.
- After the 60-day period ended, the domain easily transferred over to the client’s preferred registrar account, and all ended happily ever after.
Thanks to our acquisition analyst’s skill and expertise, Marksmen was able to track down the domain name owner, restart the negotiations with a fresh dialogue, secure the previously agreed upon price point, and successfully transfer the domain name to the client’s registrar account.
After a few bumps in the road, we were able to deliver exactly what the client wanted. We successfully acquired the desired domain name for less than half of the client’s budget and helped them build their brand in the process.
Markmen’s Intellectual Property experts provide discreet, confidential and relentless IP (trademark, domain name and patent) investigations, acquisitions, and online brand protection services for businesses of any size.