This glossary creates a shared foundation for founders and domain owners so that conversations about equity, valuation and collaboration move with clarity. When both sides work from the same language, domain discussions become a collaborative effort that shapes positioning, ownership and future potential.
Domain Names Terms
Strategic-Grade Domain Name
Strategic-Grade domain names are rare, memorable, and aligned with the brand or category they represent. They are easy to spell and type, intuitive across markets, and capable of delivering instant credibility when they match the company’s identity. Names operating at this level function as brand infrastructure, strengthening trust, recognition, and the broader narrative a company develops as it scales.
Domain Name Ownership
Domain name ownership refers to the legal and administrative control of a domain name, granting the holder rights to use, transfer, or manage it. Domain name verification is the process of proving ownership of a domain name, often by verifying the registrant’s contact information or confirming control through DNS records. Establishing clear ownership builds trust, prevents disputes, and ensures that negotiations or transactions involve the legitimate holder of the asset.
Relief-from-Royalty Valuation
This model values a domain name by estimating the savings gained from avoiding royalty payments for a weaker name. A projected royalty rate is applied to future revenues and discounted, converting the domain’s strategic contribution into a financial figure founders and owners can negotiate around.
Deal Documentation
Term Sheet
A concise outline of economics, rights, and conditions. Sets expectations early and makes negotiation structured. Clear term sheets save time and reduce misalignment.
Letter of Intent (LOI)
High-level agreement that captures price, structure, and exclusivity while signaling serious intent. Usually non binding except for confidentiality, exclusivity, and process clauses.
Definitions and Interpretation
A glossary inside the agreement that fixes meanings for key terms such as domain asset, closing, consideration, and material breach. Reduces ambiguity later.
Asset Schedule
Attachment that lists the exact domain name, related TLDs, subdomains, traffic logs, email routes, and any bundled IP or data. Functions as the inventory for the transfer.
Chain of Title Certificate
Seller statement that confirms ownership, past transfers, and absence of liens or pledges. Supports clean title and speeds escrow approval.
Assignment and Assumption Agreement
Document that transfers the domain and any related rights, with the buyer agreeing to take on defined obligations.
Bill of Sale
Evidence of transfer for the asset and consideration. Often paired with registrar change confirmations.
Conditions Precedent
Requirements that must be met before closing, such as board approval, verification of records, escrow funding, and completion of diligence.
Bring Down Certificate
Closing day confirmation that prior representations remain true and that no material adverse change occurred.
Reversion and Repurchase Rights
Terms that return the domain to the seller or permit buyback at a set price if milestones or payments fail.
Information Rights
Ongoing reports to the domain seller who holds equity, such as quarterly updates, cap table statements, and notices of financings.
Confidentiality and Publicity
Rules for handling sensitive information and timing of announcements, case studies, and press references.
KYC and AML Confirmations
Know Your Customer (KYC) and Anti-Money Laundering (AML) checks, including identity verification and sanctions-list screening for both parties and any related entities. These are standard requirements when escrow providers or regulated investors participate.
Escrow Instructions
Detailed release conditions for funds and the domain, dispute hold procedures, and the order of operations for closing.
Equity and Cap Table Mechanics
Cap Table Impact
The ownership change caused by giving equity for a domain. Strategic-Grade domain names justify dilution by lifting valuation, improving trust, and accelerating traction.
Equity Range
A window showing how much ownership a founder can offer. Signals seriousness and helps owners understand negotiation boundaries.
Equity Pool Fit
How well a domain trade fits within existing equity commitments. Founders weigh hiring needs and future rounds before allocating shares.
Vesting
Equity released over time or tied to milestones. Keeps dilution controlled and rewards genuine progress. Ensures the domain owner’s upside grows as the company grows.
Hybrid Vesting
Vesting tied to both time and performance. Rewards traction while preventing premature dilution.
Performance Triggers
Events that unlock equity, adjust ownership, or confirm transfer. Common triggers include revenue targets, MAU thresholds, or successful funding rounds.
Deal Types and Acquisition Structures
Equity Swap
Direct equity exchanged for a domain, forming an ongoing partnership rather than a single transaction. This structure fits when both sides want to influence the company’s direction and the domain strengthens credibility, positioning, and the narrative presented to stakeholders. The owner gains a meaningful stake in a venture shaped by their contribution, while the founder secures a name that elevates the brand from the first interaction and supports long-term growth.
Hybrid Structure
Deals that combine cash, equity, milestones, or revenue share. Flexible designs that let both sides manage risk while capturing upside.
Cash Plus Equity
Deals mixing upfront payment with ownership. Founders reserve cash, owners gain future upside, and both sides share incentives. Works well when the domain accelerates fundraising or reduces marketing inefficiency.
Call Option
A structure allowing a founder to secure temporary use of a domain with the right to buy it later at a pre-set price. Helpful when timing, capital, or product-stage uncertainty exists.
Lease-to-Own
Recurring payments that accumulate toward full ownership. Reduces upfront cost and provides a predictable path to transfer.
Revenue Share Add‑On
A small percentage of revenue for a limited period, paired with equity or cash. Works well for domains tied to monetizable categories.
Financing Instruments
Convertible Note
Short term debt that converts into equity at a qualified financing or other trigger. A domain owner or investor contributes value now and receives stock later once the round closes under an agreed cap or discount. The structure defers valuation and aligns the domain payoff with company growth, which keeps early deals flexible.
SAFE (Simple Agreement for Future Equity)
Simple Agreement for Future Equity that grants future stock without creating debt. The contributor provides value today and receives shares at the next priced round, often with a valuation cap or discount that rewards early support. The final ownership percentage emerges only at conversion, which keeps paperwork light while preserving economics.
Transaction Safeguards
Escrow
Neutral service that holds funds and the domain name until both sides satisfy closing conditions. In domain transactions, the agent can hold the name while the buyer completes payment, then release each to the rightful party. Using escrow reduces counterparty risk and builds trust through a controlled transfer.
Clawback Provision
Contract clause permitting the return of equity or assets when agreed conditions fail. In a domain equity deal, a clawback can require the return of shares or the domain name if milestones are missed or the partnership ends. The safeguard protects both parties by reducing downside when execution stalls
Using a consistent vocabulary helps both parties identify what the domain contributes beyond its label and how that contribution fits into long-term plans. Once the terms become familiar, the negotiation gains pace and precision, allowing both sides to concentrate on outcomes rather than process. This shared clarity leads to decisions that align with growth, recognition and brand strength.