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Comment by briga | Hacker News Reader

So spending $825k on a domain "has translated into sales". Great. What kind of sales? It's telling that all the supposed benefits here are really vague.

Maybe they could have paid someone to come up with a domain name that doesn't cost $825k.

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Agreed. hicover.com is $3.7k on Namecheap. They could have had 821k in the bank and just as good a domain name. They raised $8M on their series A according to Crunchbase, of which they spent _10%_ on a domain name. Say they sold 20% equity in that round, that's 2% of the company on a .com. That $820k could have gone a long way to delaying the need to raise a B (which they did 14 months later for another $16M), and get more favorable terms/valuation when the time came.

Correct, presumably the domain name is a capital asset that preserves its basis, so the real cost is the opportunity cost of not spending the money elsewhere. We don't really know this cost.

> presumably the domain name is a capital asset that preserves its basis

the domain name doesn't have an inherent value or basis, it's (presumably) unlikely that the next Cover Inc would be willing the same amount within a short timeframe of them wanting to disinvest from the name. Illiquid assets have to pay for liquidity in such cases.

History--so far--shows that good, .com, names do keep their value. Granted you may overpay and cannot sell at the bought price but cover.com is a name that can be used by many types of businesses. So if they go kaput, they have an asset :)

*The VCs/creditors would have an asset.

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