Frank Schilling, one of the world’s most successful domain investors, has a must-read Q&A with Tim Nye, founder of Geosign, on his blog. Geosign is a new media company that just announced it has raised $160 million in private equity from American Capital. Guelph, Ontario-based Geosign has been selectively buying generic domains from smaller investors to enhance its list of content sites, which include DietNation.com and ThinkFashion.com.
In the Q&A, Nye opines on the frequent disconnect between domain investors and private-equity investors:
The challenge for the typical domainer is that the investors want to invest in companies and not portfolios. A large PE firm is not going to give 100M to a guy who works in his basement in his underwear no matter how clean their portfolio is. I also don’t think they really get the underlying brand value. It’s definitely getting better, but it’s still not a mature investing community. Multiples are understood, but the typos and adult, and trademark issues are scaring people a little.