DropWatch: Is VC Interest A Selling Opportunity?

Sidney Parfait at DropWatch wonders whether the recent surge of venture capital interest in the secondary domain market is an opportunity:

With so many venture capital companies entering the market, is it the right time to sell your portfolio? Part with a few domains? or sit tight for awhile longer?

It's a good question, and Sidney is waiting to hear from readers before sharing his thoughts. So here are one reader's thoughts.

On questions of valuation and when to sell, the stock market serves as a useful model of how asset owners make decisions. Fundamental analysis weighs the performance and underlying worth of the asset to assess whether its share value should rise or fall. Technical analysis is more concerned with market trends and cyclical patterns that repeat themselves in market sectors and individual stocks. So in Internet 2.0, do the excesses and patterns of the dot-com era offer reliable models of what a cycle looks like for domains and web sites? Does the current environment represents the top of the market or the upside of the slope? Or do fundamental price-to-revenue trends serve as the best guide?

There are more questions than answers right now. But an influx of cash from venture capital or public companies tends to drive prices higher. I'm currently testing the market with several unused domains, on the assumption that it's an increasingly good time to sell. But I also don't yet see the level of giddiness and public involvement that tends to indicate a market top. There's an old chestnut that when folks on Main Street start buzzing about the bull market, the smart money on Wall Street is selling. Domains aren't quite Main Street just yet, but Sidney's post suggest that insiders are giving serious thought to the timing of their exit strategy.

  Posted by RichM May 22, 2005 | Permalink | Newsletter

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DropWatch: Is VC Interest A Selling Opportunity? - May 22, 2005





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