For Sale going public

[planetdomains]

This is not related to the .ca domains, but perhaps it can be...

I jumped into the domain business several years ago... I have monetized very well several domains, by just redirecting them to companies such as NAMEDRIVE etc..., but I find some of the domains tend to monetize VERY VERY SLOW...or not at all... eventhough, they seem (from a name point of view) to have alot of value... perhaps that I am looking at it from the accounting point of view, rather then a developers point of view.

In order to monetize domains, SKILLS, TIME and MONEY is key.
Myself I posses CFO skills (accounting), but not SEO/tech skills etc...
which by the way, I do outsource on a regular basis.

Myself and my company, we hold around 5,000+ domains.
Mostly .ca's. Probably, I'm one of a few individuals in Canada, with such an inventory of .ca's, but that's not the point of this email.

Looking at companies such as MARCHEX, InterSearch, Communicate.com, ThinkPartners, and many other publicly held companies, with some that have valuations out of this world, it got me thinking, that perhaps getting together with a bunch of SKILLED people would be a great venue to monetize domains. Perhaps forming a .ca based Holding Company, which is publicly traded in USA or Canada.

I've been involved in the past with publicly listed companies, raised financing and so on... therefore I know enough on how to take a company public, via a Reverse Take Over (RTO)...

I'm currently carving out a number of domains from my company, that would make sense to put in this NEW VENTURE, which I plan to list publicly.
I believe the best listing for a company of this size, is on the Pinksheets (USA), which is a good start.

Going public via a reverse take over is not that expensive in some cases, especially if the deal is pulled via a RTO, it could be done between $35k-100k, depends on the deal and so on.

We ALL have enough assets (domains), to back the listing of going public so that is not the problem. But I think I will be requiring a number of shareholders, especially who have a diverse number of skills.

There are a number of us on DNFORUM that could easily move this business idea forward, especially that many of us have a number of different skills, and perhaps inventory of domains/assets that we don't want to keep, but that could make sense of being part of a publicly listed venture.

Having said this, I'm seeking interested individuals, that want to join me.

Marco.

 

[StuntPope]

Not that I'm interesting in participating (although I'm always up for looking at interesting opportunities), I have recently been thinking about income trusts and how they lend themselves to a domain monetization entity quite aptly.

Reader's digest version: In Canada income trusts enjoy tax free earnings provided they distribute ALL of the profits to the unit holders (shareholders).

So if you got a bunch of people together who just pooled their existing domains and let them spin off the cash it would work.

If the plan was to reinvest earnings into more aquisitions and such, the income trust model wouldn't work so well.

But it would probably be quite doable to RTO a company on the TSX-V. I think the minimum capital requirements are something like 250K

 

[Duckinla]

Is RTO where you buy controlling interest in a cheap company that is already public and then change it to suit your business model?

The idea is of interest to me if it were going to go beyond just parked sites and google adsense. And if it didn't speculate in domain name valuation. I would like to see something more creative. Building real sites that attract such a unique and valuable audience that you can approach potential advertisers and sponsors directly.

I'm not a pie-in-the-sky type though. I would be interested in something that is cash flow positive very quickly and grows from success, not into success.

 

[RazorNF]

Is RTO where you buy controlling interest in a cheap company that is already public and then change it to suit your business model?

Yeah, that's pretty much what it is.

Way back in the day... dentists, lawyers, accountants, or anyone in the "know" owned a bunch of companies specifically for this purpose, most often dormant "mining" companies that didn't do anything, and were already listed on the old Alberta and Vancouver stock exchanges. Anyone who wanted to fast track a listing to an exchange would just buy one of these mining companies and change it's business as it was alot easier then starting from scratch.

 

[Duckinla]

Makes sense as long as you don't assume any liabilities or debt. Is there a way to be sure that these kinds of things don't catch you by surprise?

Also, don't you increase the value of the stock and potentially dilute your ownership just by starting the process? I mean there has to be a willing seller. Even if 75% can be bought up cheap, 25% dilution seems a high price to pay. It can certainly be quite a gift to these owners of a previously valueless stock...unless I'm missing something. Do you offer an all or nothing deal to the current stockholders? Not trying to cast dispersions, just curious how something like this plays out, as I could be interested in being a part of it.

 

[planetdomains]

There are a number of venues to take.

TSXV (toronto venture). On this market instead of RTO a mining company, what you do is you RTO a Shell (Capital Pool), where already a clean shell is available. Similar public shells or (cheque companies) are available on otcbb and pinksheets. Pinksheets and otcbb are much cheaper, yet much riskier.

When you buy a clean shell or reverse into a capital pool, there are no liabilities, as these companies were formed for that reason. They are usually sold by lawyers, who bought the 'symbol/listing' at a competitive price. Sometimes a broker/underwriter/merchant banker is involved, as they gain business in the long term with you.

I believe that the best case scenario is to carve out assets that we think are good for this shell and establish a corporation. Like REIT (real estate income trusts), we should establish a holding company of virtual real estate, lets call it DomainHoldings REIT (for now).


DomainHoldings REIT will have enough domain assets (can be valuated by 3rd party valuators, sedo or even Domain Capital / Internet REIT).

DomainsHoldings (DH) REIT would get enough financing to list (RTO) on otcbb/pinksheets. A board would have to be established, management team and so on. Like I said, we all have specific skills, and we would determine where they belong.

The DH REIT would then start monetizing the domains as best as possible. Since we would have enough 'traffic', I presume we would be able to secure high paid feeds.

Once in the public state, there are a number of ways to thrive. Raising financing for growth, working capital and acquisitions is much easier then by being private, as investors have ways to liquidate.

Once having a public lisitng, even if the business is sold to parties such as InternetREIT or Domain Capital or others, you can still do many other things with the public listing, such as going into a different internet business.