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Ask HN: Do dead YC companies sell their brands/IP?

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Ask HN: Do dead YC companies sell their brands/IP?

#1

Post by throwawaycities »

When YC companies - any funded companies for that matter - exhaust their runways and call it quits do they sell the IP portfolios (business name, domains, trademarks, patents when they exist, social media profiles)? If so, where? Marketplaces? Leverage the YC network in private deals, if so who are the buyers?

YC companies generally have quality brandable names. In the old days when I took the time to apply to YC .com TLDs were emphasized by PG himself for applicant startups.

Good business names and domains are always in demand, being able to acquire those together with trademarks is even more attractive as a business investment. If branded social media accounts are included, now you have a startup package that many established businesses don’t have.

Of course every IP portfolio would have its own valuation, but acquiring a dead YC company IP portfolio/brand would likely carry a premium from due diligence to the story/narrative.

Any insights, thoughts or stories?

Re: Ask HN: Do dead YC companies sell their brands/IP?

#3

Post by kylebenzle »

yawnxyz wrote: post #2

I have no insight, but I always wondered what happens to the $100k+ domains that VC-funded startups buy and then go bust. Do they sell them at a bargain?

I have only one example (dont want to give any attention though) the company started maybe 5-6 years ago, lasted 3-4 years and last I checked the company sold to a "media company" who oddly just took the site and made it a generic "news" ad page.

My guess is these domains can be juiced for a few $1,000 in ad revenu just from people searching the old name.

So yes, they 100% do see off their domains to "media" compaines who fill them with ads.

Re: Ask HN: Do dead YC companies sell their brands/IP?

#4

Post by neilv »

I'm curious how a failed startups can liquidate IP, since I've seen startups go under with "secret sauce" code that could've been a whole new startup... but assets are sold for a token amount of money to someone who presumably had no idea what they own, since it's never heard from again.

(Sorta like when an app startup builds an enabling piece of infrastructure tech, and realizes that's more golden than their original idea, so they pivot to B2B that tech to other startups and/or enterprises. Only sometimes the company is liquidated before that pivot or open sourcing.)

Re: Ask HN: Do dead YC companies sell their brands/IP?

#5

Post by shubhamjain »

I have no inside knowledge, but I'd guess that if those are valuable, they probably acquired. If not, those things won't amount to much. Sure, you could sell your brand and domain and fetch a couple of thousand dollars, but would that be worth the effort and risk of someone using your (even if dead) brand to do illegal stuff? I guess not! It's better to just write the whole thing off.

Re: Ask HN: Do dead YC companies sell their brands/IP?

#7

Post by simonbarker87 »

I would imagine it’s the same as any other business. They declare bankruptcy, put the business into administration, appoint administrators who then determine how much the assets are worth and how to realise any value from those assets to pay off any creditors/shareholders/take their fee.

Realising value from the assets (both tangible and intangible) might be via selling the business or just a fire sale of what they can make a return on.

Source: owned an investment backed company that we put into administration after 8 years when something happened that we couldn’t trade through.

Re: Ask HN: Do dead YC companies sell their brands/IP?

#8

Post by throwawaycities »

bombcar wrote: post #6

It can be entirely frustrating to find out who owns IP, code, etc. often is seems to disappear into an unknown abandonware type limbo. Domains eventually revert to the registrar and someone snaps them up.

The domains are an interesting asset because the annual renewal fee.

If business A owns the domain and becomes insolvent, then dissolves, the registrant of the domain no longer exists and there is no longer a business bank account to pay the renewal. This likely leads to what you’ve described, the registrar or a domainer/squatter benefiting.

Re: Ask HN: Do dead YC companies sell their brands/IP?

#9

Post by throwawaycities »

yawnxyz wrote: post #2

I have no insight, but I always wondered what happens to the $100k+ domains that VC-funded startups buy and then go bust. Do they sell them at a bargain?

Back in the day I read that a lot of the desirable domains used by startups are leased, it would be interesting learn more how that part of the industry actually works.

Re: Ask HN: Do dead YC companies sell their brands/IP?

#10

Post by snowwrestler »

Worked at a dotcom which ran out of funding after Series A. After all the staff got laid off, the email list, domain, brand materials, and web content were all transferred to the lead investor of the Series A.

Not sure if they were just “first in line” for it all, or if they passed anything on to minority investors.

It probably comes down to who has how much equity in the business, and what the terms say. It is essentially a bankruptcy so it could end up in court I guess, but typically the value is so low compared to the investment that it’s not worth any lawyer time.

And if it’s not in court, there’s really no vector for public visibility. If you’re interested in a particular company you will need to do some detective work to find out who still has what.

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