Do Premium Domains Help with Funding?

The short answer is: Yes. Premium domains not only make VC funding stronger, but are for companies who want their brands to be taken seriously, even revered; who want to achieve brand notoriety—woven into the fabric of the culture for decades to come.

Why? Quality premium domains are lead generators, brand enhancers, and appreciating assets. All three lead to increased ROI and higher company valuations—while reducing the cost of customer acquisition. As MicroStrategy’s CEO, Michael J. Saylor, said about the $30M sale of Voice(.)com (2019): “Ultra-premium Domain Names like these can help a company achieve instant brand recognition, ignite a business, and massively accelerate value creation.”
 
Here’s a just a few of my favorite examples of companies leveraging a premium domain to accelerate value creation (you can find more at casestudies):
  • Diapers(.)com: ”The new name [diapers.com] made the company more efficient, because it had to spend less money to acquire new business.” —Leonard Lodish, the first outside director for Diapers.com, which got its start as 1-800-diapers before upgrading to Diapers(.)com
  • Hive(.)com: Another great mini-case study on brand equity is the case of Hive. There are 12 companies that call themselves Hive…but only one can own the .com. When Hive bought Hive(.)com. they saw a 45% increase in their traffic overnight. That’s the power of a premium .COM. That’s brand equity in motion.

As renowned angel-investor, Jason Calacanis famously said: “The name of your startup is critically important to its success—six letters or under, generally easy to spell and certainly unique. Great entrepreneurs tackle and solve challenging issues like naming their company well, and if you can’t name your company well, you’re simply not worth investing in. I know it’s a harsh statement, but it is true. better you hear it now while you still have a chance to hit a home run. 

“If you go into a VC or angel meeting with a crappy name, they will look at it the same way they look at you unshaven with a stain on your shirt and a deck full of misspellings: that you lack focus and attention to detail. A stunning domain name paired with a world-class logo makes you look like a killer. That is what you want when you’re in a meeting asking people to give you money: Credibility. Under no circumstance should you settle for an ok or bad name, except if it’s just a placeholder and you’re not showing it to investors.”

It’s also worth noting that premium domains also provide a safety net for investors as well:

“The inherent multimillion value of an ultra premium domain name serves as a key startup venture asset to raise capital that protects the investor’s investment. It’s like a piece of raw land in the financial district of New York City. No matter what the success of the building built on that land the land itself is a concrete invincible asset that will never lose value and always increase in value.” —Kevin R. Leto,  Venture Capitalist

Want more proof that premium domains make VC funding stronger? Here are some recent VC/PE/Fortune 500 domain upgrades:

  • Aura(.)com was recently acquired by Aura, a device and data protection platform, in a stunning upgrade from AuraCompany(.)com: $150M in funding
    “Acquiring the Aura.com domain is an investment in the Aura brand as we grow our business and build the best all-in-one digital protection platform for consumers.” —Lark-Marie Anton, CCO, Aura
  • ROOM lands $12.5M after acquiring Room(.)com for $1.5M. The New York-based startup, which makes modular offices and soundproof phone booths, raised $12.5 million in a Series A round led by Slow Ventures
  • Pattern, a US-based reseller offering brands a way to optimize their sales on marketplaces like Amazon, has raised $52M from Ainge Advisory and KSV Global after acquiring Pattern(.)com.
  • Smalls a direct-to-consumer pet food company for cats, raised $9M in a Series A round led by Left Lane Capital after acquiring Smalls(.)com.
  • Superchat․de acquired Superchat(.)com six months before securing a $15M Series A round of funding.
  • Procurement automation platform Approve(.)com just secured a $5 million seed round, led by Aleph, aimed at helping the Israel-based company enter the U.S. market.
  • Packet acquires Packet(.)com; secures a $25 million Series B round of funding
  • Tactic acquires Tactic(.)com, then secures $11M funding round led by FTX Ventures
  • Meter acquires Meter(.)com in a stunning upgrade from MeterUp(.)com; secures $38 million Series B funding round
  • Dune Analytics acquires Dune(.)com; secures a $69.4 million Series B funding round that valued the company at $1 billion
  • The Series B funded CultivateAI acquires and rebrands to Cultivate(.)com: $8M Series A funding
  • Notarize acquires Notarize(.)com: $35M round led by Spark Capital
  • Cisco acquires Umbrella(.)com for cloud services
  • OrchardHomes rebrands to exact match Orchard(.)com: $280M funding
  • Hero Entertainment acquires Hero(.)com: $288M funding
  • GetUpside rebrands to exact match Upside(.)com: $165M funding
  • CapsuleCares acquires and rebrands to Capsule(.)com: $288M funding
  • In a stunning upgrade, Nuggs acquires Simulate(.)com: $4M Series A
  • Bubble.io acquires and upgrades to Bubble(.)com before raising $100M funding
  • Zapgram acquires and upgrades to Pilot(.)com before raising $158M funding
  • Waldo.io acquires and upgrades to Waldo(.)com before raising $15M funding

It’s also worth mentioning the impact of Ultra-premium Domains on company valuation. Monaco, a Swiss payments and cryptocurrency platform start-up, purchased Crypto.com for $12M. Here is the stunning part: The morning when Monaco announced the purchase of Crypto.com their MCO token was trading at $8. After the announcement, MCO was trading roughly 20% up at $9.50. That is a $22M increase in terms of market cap . Bottom line: The PR bump and the fact that they bought Crypto.com made their currency go up more in value than they actually paid for the domain name. 

Acquiring and investing in category-defining, and/or exact match domain name brands not only massively accelerates value creation, but also enhances exits and—when done first—makes VC funding stronger. Premium domains are both addresses and assets and leverage value exponentially. Reach out today for a complimentary consultation: Kate@Defining.com

Note: My thanks to Crunchbase, along with industry colleagues Jamie Zoch, Elliot Silver, and Andrew Miller, whose reporting assisted in the compilation of this post.