I doubt anyone with a semblance of a conscience in their shoes could do that, except back to the benefactor, for cheaper (which would also be pretty lame)...the man turned down 6 figure offers and gave it to them because he believed in their mission. That they would go "whoops, it cost too much, gonna sell it to whoever offers me the most while we bail from our failed startup" would make the benefactor feel like total shit. I would never do that to a guy. I'd probably go work a 9-5 for a year and keep the domain for my next stab at a dream in the space.
The original owner could have added the right to buy the domain back from the new owners at a fixed cost should they wish to sell it in the future (or right of first refusal, etc) if he was worried about that.
I worked for a start-up that acquired a smaller company (complete with an awesome name) for cash/shares. Smaller company supposedly had a clause in their contract saying they could buy the company back for £1 should the new owner run out of money. Fast forward 2 years: parent company failed and smaller company carried on...
Yes, the smaller guys never really integrated themselves with the rest of the team and were pretty smug about the whole situation all when the parent company started to go down.
I'm not a lawyer, but I believe a semblance of conscience is sadly not allowed for in a bankruptcy. If the Experiment.com people, like most startups, fail to make it, then I'd think they're by default obligated to get the best price possible for the assets. I think doing anything else (e.g., giving a company asset to a founder) would require a founder to agree.
Like goatforce suggests, I would have made sure the deal includes a buyback clause. I'd do that even as a founder, because a) it's the right thing to do in this case, and b) it would let me negotiate a lower price because I'm not making the guy give up his 15-year dream of making sure it is used for something good.
Sorry, total fail in that first paragraph, and I missed the edit window. I should have said: I think doing anything else (e.g., giving a company asset to a founder) would require all investors to agree.
Yeah in a bankruptcy, definitely. I was thinking back to my last company, which we wound down in an orderly fashion, so only the shareholders mattered. But I definitely said bankruptcy, where it's creditors (and, I suppose, the judge who approves the settlement) who matter.
I certainly hummed and hawed about attaching clauses to the sale, but feared they would make the transfer overly complex.
It was better for me to err on the side of being zen about it. A big driver was the feeling I got from the microryza team.
They're the real deal and they are going to be able to do very well by this name.
I told them during negotiations that what I'm most interested in is their succeeding so that they don't need to enter into the domain name speculation business, because they would be very very sad.
I will mention, though, as part of this story, that I was once approached by someone who wanted to use the domain name for a sex toys store. And while that's reasonably noble, I was comparing at the time to my own aspirations for the name in the realm of pure science.
You'd work 9-5 for a year to keep a semi-valuable domain name, currently "valued" at $54k, for some future potential pipe-dream of using that name in another startup where the name is equally relevant?
I'm in this business. It's quite common to claim things like that. And being offered a sum of money and actually closing a deal are two different things anyway.
That said they did get a good number on the domain and it is possible that the seller did get offers for 6 figures. But the fact that he said that really means nothing as there is no way to verify that. It's a negotiating technique.
