Ask HN: Do dead YC companies sell their brands/IP? • Hacker News Board

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

#11

Post by neilv » Sat, Jul 13, 2024, 4:58 PM UTC

> 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.

How could you legitimately use the brand name, domain name, or branded social media accounts of a different company?

Sketchy SEO could use it. Or a criminal enterprise that needs a veneer of respectability. Or a business in a country with PR challenges could use the identity of a different company that didn't have those barriers.

But what legitimate things could, say, a US startup do with a defunct YC startup's brand?

Maybe you could do it legally, but wouldn't it be confusing every time you talk with a prospective investor, customer, or vendor?

"Oh, I see the confusion, ha ha... No we're not the Foobr that lost everyone's money, shut down abruptly on their customers, and maybe had to negotiate on their final bills from vendors... We're actually the Foobr that has the resourceful grit to graverob a failed brand. I know, it's a feather in our cap, we're not too modest to admit!"

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

#12

Post by throwawaycities » Sat, Jul 13, 2024, 4:59 PM UTC

simonbarker87 wrote: post #7

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 c…

Very interesting data point, I’d have thought bankruptcy would be the exception not the rule, only applicable when there is startup debt. Maybe this is actually far more common than I’d thought due to SAFEs and convertible notes.

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

#13

Post by esafak » Sat, Jul 13, 2024, 5:02 PM UTC

neilv wrote: post #11

> 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. How could you legitimately use the brand name, domain name, or branded social media accounts of a different company? Sketchy SEO could use…

Company names get recycled all the time. People have short memories.

I wouldn't recycle the Twitter account but the domain, for sure, if it is generic enough.

https://www.fountain.com/ today is an HR company. Yesterday, it was an advice marketplace: https://techcrunch.com/2015/10/29/porch-acquires-mobile-expe.... And so on.

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

#14

Post by philip1209 » Sat, Jul 13, 2024, 5:04 PM UTC

neilv wrote: post #11

> 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. How could you legitimately use the brand name, domain name, or branded social media accounts of a different company? Sketchy SEO could use…

Honestly, almost all of the companies that shut down will be unknown because they failed to make something people wanted.

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

#15

Post by travoc » Sat, Jul 13, 2024, 5:04 PM UTC

Usually there’s a broke founder who refuses to let the dream go.

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

#16

Post by gwern » Sat, Jul 13, 2024, 5:07 PM UTC

throwawaycities wrote: post #8

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.

But you can at least buy the domain from the squatter afterwards, so the deadweight loss is limited. This is analogous to proposals for Harberger taxes on IP, or requiring copyright registration/fees for renewal after a few decades - if the rights are lost or so low value, then this elegantly restores it to the public domain, rather than locking it up for the next 100+ years.

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

#17

Post by throwawaycities » Sat, Jul 13, 2024, 5:08 PM UTC

neilv wrote: post #11

> 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. How could you legitimately use the brand name, domain name, or branded social media accounts of a different company? Sketchy SEO could use…

Effectively it’s no different than any other acquisition. There is nothing inherently nefarious about buying business assets for the brand and not the actual business itself.

As an example when RadioShack was in bankruptcy a PE group acquired the brand/IP for $26M. A couple years later that PE group resold the IP to a group in South America that relaunched RadioShack retail stores, but they could have used the brand in connection with a business unrelated to electronics retail stores.

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

#18

Post by throwawaycities » Sat, Jul 13, 2024, 5:18 PM UTC

gwern wrote: post #16

throwawaycities wrote: post #8

Earlier quoted context omitted.

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.

But you can at least buy the domain from the squatter afterwards, so the deadweight loss is limited. This is analogous to proposals for Harberger taxes on IP, or requiring copyright registration/fees for renewal after a few decades - if the rights are lost or so low value, then this elegantly restores it to the public domain, rather than locking it up for the next 100+ years.

I’m strongly against Harberger Taxes - I see them as an attack vector by market incumbents - but you just made them sound as non-objectionable as I’ve ever seen.

On the domain side I’d like to see a small extension of ICANN UDRP to cover trademark owners against unused/forwarded domains irrespective of the domain being registered prior to the trademark registration.

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

#19

Post by kstrauser » Sat, Jul 13, 2024, 5:33 PM UTC

neilv wrote: post #11

> 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. How could you legitimately use the brand name, domain name, or branded social media accounts of a different company? Sketchy SEO could use…

Great question. I'll have to Kagi the answer.

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

#20

Post by FinnKuhn » Sat, Jul 13, 2024, 5:42 PM UTC

philip1209 wrote: post #14

neilv wrote: post #11

> 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. How could you legitimately use the brand name, domain name, or branded social media accounts of a different company? Sketchy SEO could use…

Honestly, almost all of the companies that shut down will be unknown because they failed to make something people wanted.

Additionally most startups are somewhat niche in the beginning. As long as you are planning to use the brand/domain for a different customer audience I don't think it would be confusing.