Domain names and banks

[msn]

Until domains are publicly traded and shares of stock per domain are allocated and traded on the open markets, getting loans on domain valuation is not going to happen. The courts ruling domains as "assets" is a start but the days of mainstream market trading are far, far away...if ever.

It has been done already - in a way - with the likes of Demand Media and some others.

[msn]

It seems that this is changing.

Since the recent decision that domain interests are property, if you were in Ontario you could list the domains on your books as assets rather than costs, so eventually they will be ascribed some worth. But keep in mind that the likely carrying value will be only the cost to acquire and maintain the registration, not its 'likely' market price, because the market is illiquid.

I am dealing with some banks and trying to convince them that domain names actually have value. They used to ask me what a domain name was, at least now they say a domain name is a form of goodwill and holds no value.

I tell them "no, they are actually worth money, honest", then I get a confused look and they tell me to go away.

I am an extreme domainer and have put a lot of money into my names, too much -lol, but I wanted to buy while they are bargain priced. I believe I have an excellent portfolio of approximately 1500 good to extremely high quality names, birthdaygift(s).ca, bracelet(s).ca, dinnerware(.)ca, bead(ing).ca, brooch(es).ca, classicalmusic(.)ca, incense(.ca) and many more. I am looking for ways to convince the bank to give me money and use the names as collateral.

Has anyone had any experience with dealing with the banks and domain names. I thought by now they might be starting to get it, but like most businesses out there it is all still mystical stuff -lol. I am hoping to avoid investors for what I am trying to do.

[DropWizard.com]

This is an experience my wife just told me about. She had to deliver some estate documents to the brand new CIBC just opened in our neighbourhood. When she walked in the manager asked if he could help her. She gave him the docs and he asked if she lived locally. When she said yes he asked where she banked. When she told him he asked if she would consider moving to their new branch.

She told him he wouldn't want her business because she was self employed. He started to back off but asked her what kind of business she had. When she said it was an internet business he couldn't get away fast enough.

Not a question about how successful was she/we. Not a question about net worth. He just ran for the hills.

And that should tell you everything about dealing with a bank.

If you want to raise money you need to do an offering memorandum and sell shares. LMK I'll do one for you (approx 2.5- 5k cost depending on complexity)

[msn]

If you want to raise money you need to do an offering memorandum and sell shares. LMK I'll do one for you (approx 2.5- 5k cost depending on complexity)

I wanted to do a dark pool, but the cost to set that up is likely quite a bit more. Just the same, I might be interested.

[DropWizard.com]

An offering memorandum has a far lower threshold of disclosure. There are no active exchanges to please and you're only subject to the regulator's displeasure if someone complains. It allows access to the mom and pop retail investor. But it's across the kitchen table selling so you need salespeople or good leads. If you have deep pocket or sophisticated investors it would work for that.

All in all a very simple way to raise money from the public. It should work easily up to a couple of mill. And the banks can go sc**w themselves.

[msn]

So where do I find that salesman?

[Gerry]

It has been done already - in a way - with the likes of Demand Media and some others.

Taking a failed concept to a bank is, well...FAIL!

---------- Post added at 08:22 PM ---------- Previous post was at 08:20 PM ----------

It seems that this is changing.

Since the recent decision that domain interests are property, if you were in Ontario you could list the domains on your books as assets rather than costs, so eventually they will be ascribed some worth. But keep in mind that the likely carrying value will be only the cost to acquire and maintain the registration, not its 'likely' market price, because the market is illiquid.

You've been able to carry on the books as assets from day one. At least, I have for tax purposes.

Before banks lend money on anything, they have to have something tangible to see, grasp, and feel so, as you point out, it can become liquid assets.