Search

How Michael Bereslavsky of Domain Magnate is Leveraging Private Equity Deals Under $1 Million

By Spencer Haws |

Michael Bereslavsky of Domain Magnate is bringing private equity to online niche businesses. 

Since 2004 Michael has been building online businesses. Over the years, he’s had plenty of hard lessons and unique experiences. 

He found the best complementary strengths and profitability in buying, managing, and selling websites.

Today Michael is now the founder and CEO of Domain Magnate, a micro private equity firm specializing in buying and growing online businesses under $1m. 

In addition, Michael is now a partner at Dealflow Brokerage

Listen to the podcast to hear how Michael started, and a few of his most memorable deals. 

Watch the Full Episode

Micro Private Equity

You can find a private equity firm specializing in just about anything. Real Estate, Oil, Public Works, Banking, Royalty funds, and even private equity firms specialize in art investments.  

Domain Magnate has been around for a while now with their investment strategy into the micro online business world (online business less than $1 million). 

Domain Magnate at first glance appears to be similar to a brokerage like Quiet Light Brokerage or Dealflow brokerage. Brokerages typically don’t manage or take investors’ money which is why Domain Magnate is structured as a small private equity firm.

The idea of a private equity firm buying a company to restructure and grow for resale is not uncommon. It’s probably the norm, but historically online niche websites would have been too small or risky and looked over. 

What’s unique is the investment opportunities. Michael and his team bring fresh insight and deal structure to the established websites exit strategy for investors to participate in the profitable deal-making.

Investment Opportunities

  1. The Big Fund:
    The first option is for accredited investors only. The fund will allow a larger number of investors to participate, and it will aim to acquire and grow multiple businesses and distribute profits to investors. You can learn more about this fund here

    When you invest in the fund, it’s a passive investment, meaning you won’t have much decision making in the process. Domain Magnate will buy websites in the first year, grow those sites, and in the second year begin distributing dividends from either the revenues or sales of the companies purchased in year one.

  2. Buy Manage Program:
    In a way, this is similar to the operator model. As an investor, you own 100% of the company that is purchased. The difference between the operator model and the Buy Manage Program that the Domain Magnate team offers is M&A processes.

    A typical operator would handle the website‘s day-to-day, where Domain Magnate will put much more of the focus on the initial purchase and eventual sale of the website for a profitable flip. (in addition to the day-to-day.)

  3. Family Fund Investing:
    The third way you can invest with Domain Magnate is through a family fund structure. More considerable family funds or family office investors will come to Domain Magnate to diversify their portfolio by investing in the online website businesses.

    The minimum to invest in this space is currently $500,000-$1,000,000.

Current Portfolio Success

The model is working well for the team. Their first fund generated a total profit of $775,604.40 and an asset value estimate of $275,000. You can see a few of their real success on their site here. 

domain magnate

They’ve sold 4 of the businesses for a combined amount of $494K, and have 5 remaining sites with a combined estimated fair market value of $275K.

If the fund were to be liquidated now at a fair market value, the Total Value would be $1,050,604, with a Total Return of 130%.

Getting Started

It would take some guts to manage someone else’s portfolio of websites and take a lot of faith in the investors. So how did Michael get others to trust him with investing millions of dollars?

Michael started working in Online businesses in 2004. He was 19 going to University to be a software engineer. 

The problem was Michael was a terrible software engineer. In fact, he had trouble coding. He was getting interviews with some of the largest tech companies in the world, but once he reached the coding portion of the interview, he inevitably never got the job. 

Over 50% Off Templatic Membership

NichePursuits Rating

Powering tens of thousands of websites for over 10+ years. Templatic offers you 100+ professional Premium WordPress themes and 50+ WordPress plugins to help you power and monetize your website and all come with top-notch support.

  • Unlimited Domain Installation
  • Open Source Code
  • 1-Click Install
  • SEO Friendly Themes
  • Use Coupon Code: NichePursuits

GET 50% OFF THEME CLUB

It was around the same time, though, that Michael found he could make money with online businesses

First Incomes

His first entrance into the online business world was in 2004, and there were no courses that taught you how to make money online. 

Three short years later, in 2007, he made his first 6 figure income. He was pulling in $10-15k per month from Adsense. 

Michael recalls the hassle at the bank having to tell the tellers that he did not work for Google.

“No I don’t work for Google. It’s a Google Ad Network payment”. 

Since then, Michael has completed hundreds of deals. Most of them relatively small sales but have consistently been growing in size. 

What started as $100 acquisitions went to $1000 acquisitions, and then $100,000. Michael even participated as an advisor capacity for 7 and 8 figure deals. 

How to Negotiate Website deals

Michael says the key to negotiating great deals is keeping a cool head and sticking to the facts. 

Deals will often fall through due to a small disagreement. By sticking to the facts, you are able to take a few of the extreme emotions out of the equation and land better and more consistent deals. 

To land a great deal during negotiations, knowing what you want in a deal is the first step. Whether it’s for a client or personally Michael chooses a set of criteria for sites to look at. 

Selecting Criteria

For Domain Magnate one of the key criteria is organic traffic. While there are lots of other factors it really comes down to the buyer

For some, that could mean a content site, others a SaaS business. Metrics such as price, earnings, or industry are just as important. 

Each deal Domain Magnate does is a bit unique, but there are a few similarities for each. Here are just a few of the steps Domain Magnate does when managing the process of Buying, managing, and selling a site. 

Domain Magnate Process

Does the process work for all websites? 

Michael admits that it doesn’t. One or two out of every ten sites will fail. We’re all human, and making a profit 80% of the time is not bad at all. 

Some results are swifter than others. Sites are purchased with the intent of selling in six months to a year. Domain Magnate also considers holding onto larger sites cash flowing well. The team understands that the change is consistent and must adapt to the circumstance when necessary. 

What’s next for Domain Magnate?

Michael has seen consistent growth from $100 sites to $100,000 sites. So the natural next step is to go bigger. Michael says they look to buy a few low 7 figure businesses in the near term.

Larger business deals and finding great people to work with are the current priorities at Domain Magnate

Domain Magnate currently has twenty employees, and Michael did mention they were hiring more. 

If you want to get in touch with Domain Magnate, learn more about their investment opportunities or available jobs, you can find more at DomainMagnate.com.




Podcasts

By Spencer Haws

Spencer Haws is the founder of NichePursuits.com. After getting a degree in Business Finance from BYU (2002) and an MBA from ASU (2007) he worked for 8 years in Business Banking and Finance at both Merril Lynch and Wells Fargo Bank.

While consulting with other small business owners as a business banker, Spencer finally had the desire to start his own business. He successfully built a portfolio of niche sites using SEO and online marketing that allowed him to quit his job in 2011. Since then he's been involved in dozens of online business ventures including: creating and exiting Long Tail Pro, running an Amazon FBA business for over 3 years and selling that business, founding LinkWhisper.com, and co-founding MotionInvest.com. You can learn more about Spencer here.

Want to learn step-by-step how I built my Niche Site Empire up to a full-time income?

Yes! I Love to Learn

You may also like

View all

Recent Posts

View all