HOW DO I FIND THE MONEY TO FUND THIS GREAT DOMAIN !?
Why do only the “rich guys” get to buy all the good domains? This is a question that has been asked for time immemorial. Well, ok, maybe a couple years, but in Internet time that seems like a millennium. Whether its domains, Real Estate, business interest, or some other juicy “Wish-You-Could-Have” that you KNOW has tremendous growth potential, how do you get your hands on the funds to get into the deal? How? No – seriously, I’m asking you. Surely I jest, here’s several ways.
The box. What is this box everyone is in? We’re taught by academic hacks with many diminutives after their name who, for the most part, have never built, nor bought, a significant business interest. In fact, let me be the first to state that “PhD” truly stands for “Piled High with Debt”. The mentality we’re taught is: go to school, work hard, get good grades, go to college, rack up debt, hope to get a job, hope and pray not to get fired, work making the business owner(s) wealthy, die. Too crude? Ok, but you get the point. This is where we learn “the box”.
Some ideas in The Box are the obvious…
Cash. Umm, brilliant.
Ask someone ELSE if you can Borrow the money, typically whom? Mom, Dad, or the rich uncle. What’s in it for them? They get to participate in your great hair-brained, half-baked idea to buy icicles.com and have affiliate links for coupons for Slushies at convenience stores. Unlikely, even if your numbers are GOOD.
Get a loan from a bank. MWUAAAH HAA HA HA HAA HAA!… Goodness. Sorry. Anyway, go to Bank of America and explain your domain-endeavor to the mid-level loan officer who’s going to ask for personal guarantees, your net worth, your “W2 paying job paychecks”, the works. Then, go have a soothing beverage after he shoots your idea down as non-conforming to their lending policies. For that matter, you could try asking for a loan for a more traditional investment. Ask, for example, for a loan of a mere $10,000 – with the stated intention of “buying Bank of America stock and reaping returns on it”. (insert maniacal laughter again). Who knows, I could be wrong and you’ll get your 10 year loan at double-digit interest, have at it.
www.DomainCapital.com. Aha! Finally! “Domain Capital is the first and only financial services company to offer financing to businesses based on the inherent and recognized value of premium domain names. Our vision is to innovate exciting new financial products and services designed to enable entrepreneurs to exploit new business models.” Domain Capital has flexibility and knowledge to accommodate EXACTLY these interests. Contact Rob Alfano or Vince Harasymiak and tell them DomainGraduate sent you: 201.302.5100.
Private Equity. (Wikipedia) “In finance, private equity is an asset class consisting of equity investments in companies that are not traded on a public stock exchange. Investments typically involve a transformational, value-added, active management strategy. Private equity firms generally receive a return on their investments through one of three ways: an IPO, a sale or merger of the company they control, or a recapitalization.” Jude’s Layman definition: Rich guys. These folks seek alternative investments and care not for “safe bonds” or 1-7% returns. They’re looking for 12% to 40% or even more. They’ll want at least a one-pager Executive overview if not an entire business plan.
Partners. Bring in someone with mutual trust who knows the risk and reward. Caution: All the Partner Agreements and disclosures in the world won’t save you from the incendiary feelings of personal betrayal they may have if things go awry. On the other hand, the closeness and personal relationship may be the best thing to keep you out of the court room.
Credit cards. Last year, while not working, I bought a two family house, and used a credit card for the closing. The closing was about $12,000. My good credit got me the house. How do you get good credit? Research “credit card flipping”. Basically, you take out several credit cards. Take out $500 on Card One by writing a credit-card “check”. Put that in the bank. After 30 days, write a check from Card 2 to pay some of Card 1, leaving just over $100 on Card 1 by paying $899 (otherwise they may not report it to the reporting agencies as that has a cost). You now have a balance on Card 2 of $899. Write a Card 3 to pay Down much of the balance on Card 2. Keep this going, and you’ll pay slight interest (on $100 on a few cards) unless you have a “Limited Time 0% Interest” type card (you know, the ones the academics told us to throw away). I don’t throw them away any more and now own www.DriftwoodLanding.com (the house, and the domain!). As you build credit, ask the credit companies for increases of at least $10,000 to perhaps even $100,000 (they’ll give you plenty).
Self Directed Retirement Funds. Since 1974 you often don’t have to leave your retirement funds in lame, underperforming paper assets, bonds, mutual funds, annuities and the like. With a structure that’s been quite perfected, you can re-channel retirement funds to the custody of a qualified custodian and “direct” that custodian to write checks for your benefit to buy, well, almost anything! It has to be an “arm’s length transaction” and one can’t “touch” or “actively manage” the things they invest in (such as do the roof on a rental property or the keywords for your domain). However, you, as manager using Other People’s Money can actively manage to your heart’s content. I know stories of people buying race-horses, Alaskan fishing rights, you name it. So, your peers may not have $100,000, but there’s a GOOD chance one or a combination of them has it in their retirement. I work with Capital Market Solutions, LLC in Portland, Maine and Boston, MA.
Win the lottery.
Bank Heist? Though, with modern security, dye-packs, and average net of $2,500, it hardly seems worth it.
Ok – I’m fresh out of ideas, and hope this was at all helpful!
~Yours in domains.
Jude
Source: Jude Augusta, ESQ./MBA is the Contributing Editor for the DomainGraduate Course & Co-Author on DomainNews.com - April 1st, 2008
jude@domaingraduate.comThis e-mail address is being protected from spam bots, you need JavaScript enabled to view it
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