Spend 75% of its capital on its domain name — Friend.com didn’t

Friend bought friend.com on a payment plan rather than forking over most of its cash.

There are a lot of stories going around today regarding Friend launching on the friend.com domain name.

The maker of the AI product somewhat reminiscent of Her disclosed a $2.5 million fundraising round. It also stated it purchased the domain for $1.8 million.

But the language in a GeekWire article makes it clear the firm didn’t fork over most of its cash for the domain. It states the founder borrowed the money.

And a screenshot of the purchase transaction at Escrow.com makes it clear this domain is on a payment plan.

We don’t know the payment schedule or the transaction period. The deal is for $1,887,843, but the terms are not disclosed.

Many times, these types of deals are structured with even payments over, say, 5 years. In that case, payments are regarding $30,000 a month.

But it could be much lower with a balloon payment or increasing payments later on.

Generally speaking, these deals are non-recourse; the buyer can stop paying at any time, and they just lose access to the domain.

So if you’re entrepreneur Avi Schiffmann, you can secure a domain for a nominal amount. If the business works, you’ll have more than enough money to continue paying for the domain and eventually owning it. If it doesn’t work, you stop paying.

Schiffman certainly realizes the power of a good domain. He told GeekWire that buying the domain made a lot of sense:

It was just sitting there for 17 years, no one did anything with it. For a product like this, especially the whole privacy aspect of it’s always listening, etc, you can’t have, tryfriend .ai. It just doesn’t feel real.