Why .Com is the Venture Capital Community’s Power Player

Article from Cara Hayes, Verisign director of digital marketing, previously published in WIRED.

The Venture Capital (VC) community is well aware of the value of a great domain name. In a recent essay, Paul Graham, venture capitalist and co-founder of the Y Combinator seed capital firm said, “The problem with not having the .com of your name is that it signals weakness.” It’s no wonder that 100 percent of the top 20 Y Combinator companies by valuation have the .com of their name.

Recent data shows that .com is the most popular domain extension for funded startups. That’s because its global recognition and unmatched security, stability and reliability lends instant credibility to brands associated with a .com domain name.

.Com Domain Names: A Smart Investment for Funded Startups

David Teten, a partner at ff Venture Capital and former founder and CEO of GoldNames, an Israel-based investment bank focusing on the internet domain name asset class, noted that domain names are crucial for companies looking to receive funding and rise to the top of their space. And the numbers show that .com remains the domain of choice for funded startups. Check out the stats from these recent studies:

  • In 2015, data from CB Insights showed that among the 25,000 tech companies funded since 2010, more than 20,000 companies chose .com domain names.
  • DNGeek.com analyzed 2,195 newly funded startups that raised a combined $10 billion in funding in the first two quarters of 2016, and reported that .com was used by 73.7 percent of those startups.
  • By referencing the 2016 Forbes Midas List, as well as Finsmes (which tallies up the most represented VC firms on the list), Verisign found that 100 percent of the top 10 most represented VC firms on the list, and over 90 percent of their portfolio companies, have a .com.

More Memorable, Less Confusing

Why is .com preferred by startups? “At the heart of the question is the level of familiarity and comfort level that people have with the .com domain extension,” said Mike Mann, CEO and founder of SEO.com and one of the world’s best known domain investors. Mann and many other domain and SEO experts agree that a long .com domain name is better, more memorable and less confusing to consumers than a short domain name on a lesser-known domain extension. Moz Co-Founder Rand Fishkin recently wrote on the popular SEO blog, “If you want to build up a very brandable domain that can do well, you want that .com.” And even after decades of continuous growth, there are still millions of .com domain names available. See for yourself here.

For tips on how to choose the right domain name, check out this article.



1 comment

  1. We are in the process of launching our startup and we went with a .com, however, we considered a .io domain extension. We are seeing more and more tech firms utilize this extension. There are obviously many more exact match keyword URLs available. All the research we went through shows that Google weights all domain extensions equally, accept for .edu and .gov for obvious reasons. With that being said your point about memorability is well taken. Thanks for the insight.

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