2017 was a year that saw plenty of activity with VC startups. That fueled an impressive demand for domain names, although not quite as many as were bought up by VC-backed startups in 2016.
The numbers are still comparable, and looking into them can provide information and analysis not only for the year 2017, but trends forming from the 2016 data and how that information can be used by domain investors today.
Here’s what we will cover in this analysis:
- Raw data of funded startups
- Major insights from analysis
- Takeaways for domain investors
So let’s get right into it!
Raw Data of 2017 Funded Startups
3 Major Insights From Domains Used By VC Startups
This study will be looking at insights specifically from domains that were bought by VC startups. These are buyers who are willing to pay more for the right branded domain, intend to grow an active site, and have the money to pay premium prices for the right domain name.
It’s also easier to collect information on domains that are bought by VC-backed startup companies. Since we’re looking for information most useful to domain investors it makes sense to grab the domain purchasing data from motivated buyers.
Our approach was as follows. We obtained the data of funded startups from Crunchbase and cross-correlated that to their domain names. We analyzed the raw data using Microsoft Excel and created data-driven charts to pull insights.
The results of the 2017 data are recorded, analyzed, and examined in this article.
1. Most Common TLDs Used By Startups
No one will be surprised to see that .com is the king of TLDs by a long shot. In 2017 68% of venture startups went with a .com domain. This is even higher than the 63% from 2016 and the 54% overall average worldwide.
This was followed once again by .io and .co domains which combined to be used by 307 total startups, or roughly 7.5% of all startups. These numbers show that .io and .co maintained their place from 2016 as the preferred alternatives to .com for venture-backed buyers.
This also confirms that the very old knowledge of .net and .org being the best .com alternatives no longer applies. At least not to investors who are looking at the TLDs that are actually being bought by motivated new brands and businesses.
Another interesting potential takeaway from this is that the .tv TLD that many investors were excited about might be more hype than substance. Especially when it comes to domains that motivated businesses and buyers are looking for.
2. Number of Words in a Startup Domain Name
The 2017 numbers show that the strong 2016 preferences towards one or two-word domain names was not a fluke. If anything, the numbers from 2017 went even heavier in this direction.
A full 53% (2,199 out of 4,110) domains were a single word. Another 38% (1,559 out of 4,110) domains were two words. This means the demand for one word domains was up 6% from 2016 and the demand for two-word domains was up 3% from 2016.
That means that 91% of VC-backed businesses were looking for domains with just one or two words. Short and memorable is beating out long and detailed when it comes to what type of domain names startups are looking for.
The demand for domain names made up of three words was a very distant third while the demand for longer domain names of four or more words was virtually non-existent.
If you’re looking to invest in domains that VC-backed new startups would want, and be willing to pay a princely sum for, then domains of only one or two words are the clear-cut winners.
3. How Many Characters In Startup Domains?
The study of how many characters are in these domains seems to confirm the idea that brevity is a major focus for new startups looking for the perfect domain name. The majority of purchased domains were 6 to 10 characters in length, with the most common being 8 characters.
These are the same numbers we see from the 2016 numbers, and show the consistent demand for memorable short domains that hit in that range.
There is a bit more leeway for domain names a touch shorter or a touch longer from this “sweet spot” range of 6-10 characters. However, this shows the one-word and two-word domain names tend to stay on the shorter side as opposed to two very long words.
Short and memorable is the trend to keep in mind from this data.
Final Takeaways for Domain Investors
The data from 2017 is interesting. While it would be a bit premature to suggest that the trends of 2016 were accelerating, especially with only two years of data, the patterns found here indicate that the data from 2016 weren’t outliers.
Short and memorable domain names are the way to go for investors, especially if they are 1-2 words, 6-10 characters, and a .com. These are the domains with the best chance of leading to a big payout.
- If available, .com is the best TLD for a domain name followed by .io and .co if the .com is impossible to acquire.
- Short domain names made up of just one or two words are in the highest demand by VC backed startups, and it’s not even close.
- The majority of domains are in the 6-10 character range, but you don’t seem to run into true outliers until you go outside of 4-14. This still reinforces the idea that memorable and short brands are ideal.