Acquisition Criteria

Domain Magnate Acquisition Criteria

At Domain Magnate we have our own approach to deals and use a specific selection criteria when making acquisition decisions.

Know More

This page will help you understand our ethos whether you are:

  • Buying a business
  • Selling a business
  • Looking to invest with us

Strategic criteria

We aim to acquire businesses that match our skills and expertise which we can successfully operate, grow and improve. 

What we look for:

  • SEO – as our main strength we focus on businesses with over 50% organic search traffic 
  • Revenue sources – we prefer revenue from the sale of digital products, affiliate programs, advertising networks, e-commerce, drop shipping, SaaS, software, and others
  • Remote – we prefer businesses that can be operated remotely
  • Evergreen – we ideally look for an evergreen niche and industry

Legal criteria

As a US company, we comply with all US federal and relevant state laws, so we do not acquire businesses that may violate those. These include businesses which:

  • Engage in illegal activity
  • Rely on copyright or trademark infringement
  • Use fraudulent marketing techniques or promote deceptive products

Ethical criteria

We aim to make a positive contribution to the world and therefore follow a strict ethical code when acquiring new assets. We avoid businesses which:

  • Promote hate, violence, racism
  • Sell or promote sale of highly addicting substances
  • Make a clear negative impact on society
  • Use deceptive marketing or promotional methods

Price Criteria

We are transparent about pricing and are happy to explain calculations and deal structures to sellers. We buy on behalf of our investors and funds which also impacts pricing for different businesses. 

  • Fair market multiple – Our offers are calculated on a fair market multiple of annual profit, which based on analysis of top marketplaces like Flippa and Empire Flippers, is usually between 2x and 3x for the types of sites we buy
  • Bypass broker fees – While our offer may be lower than an initial listing price, typically it works out higher than the final closing price after commissions and marketplace/broker fees – also bypassing the lengthy sales process and hassle associated with dealing with multiple, inexperienced buyers

Acquisition Preferences

We prefer businesses with:

Substantial opportunities for expansion in their niche through SEO

Reasonably priced based on market value

A growing niche

Consistent history of profitability

Competitive advantages

Limited risks

Diverse sources of revenue and opportunities for optimizing monetization

Funding

The funding for our acquisitions comes from several different sources:

Own capital

Occasionally we buy businesses for our own portfolio or to integrate with our services that fit well with our strategy and expertise

Our funds

We operate several funds with our investors where we use investor capital to purchase and manage businesses that fit the fund criteria

Individual investors

We also buy and manage businesses on behalf of individual investors and clients who fund the deal themselves

For all funding options, most transactions are done via escrow.com. See CEO Michael chat with the owner of escrow.com here.

Acquisition Process

We have a straightforward and transparent process when it comes to making acquisitions:

Initial lead review

We first engage with the seller to check that the business meets our preliminary criteria regarding business type, profits, ethical and legal requirements and expected price range.

Confirm criteria

For businesses that pass the initial review, we do a more detailed due diligence and analysis to ensure they meet all the criteria outlined on this page, and we also verify financials, traffic, marketing and operational processes.

Make an offer

Upon passing all our due diligence and verifying the criteria, we can submit an offer for the business.

Sales agreement

Once a deal is reached we move forward with a sales agreement that includes the structure and terms of the purchase.

Close the deal

Most of our transactions are conducted via escrow.com (we are also a premium partner with them), so we send funds to escrow.com for verification, receive the assets, and upon completion the funds are released.

Do you think you meet the requirements?

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