Two interested buyers: running a fair process

You hold a TLD and two parties have told you, in terms you believe, that they want it. Neither knows the other by name. Each has asked sensible questions, each has a reason for wanting the string, and each has the means to pay. For a holder who has spent a long time hearing from nobody, this feels like the easy part. It is the part where most of the avoidable damage is done.

The damage rarely comes from bad faith. It comes from improvising: a fact given to one party and not the other, a date mentioned to one alone, an offer hinted at to see what happens. This article is for the holder in that position. It sets out a process with two properties: both parties are treated the same way from the first day to the last, and the holder still obtains the best terms each party is willing to give. It also says plainly what such a process forbids, because the forbidden moves are the tempting ones.

What a second serious party changes for a holder

With one party, a sale is a conversation. You can answer questions as they come, let the timetable follow the buyer’s internal approvals, and shape the terms together. Nothing you say to that party can disadvantage anyone else, because nobody else is there.

With two, every act has a comparison built into it. A document sent to one and not the other is an advantage given. A week of extra time granted to one is a week taken from the other. A casual remark about where the price is heading is a signal that one party received and the other did not. You have stopped being a counterpart in a conversation and become the person who runs a procedure, whether or not you wanted the role.

Two parties also change what you owe. You owe neither of them the TLD. You are free to prefer one for reasons that are yours: certainty of closing, the use they intend, the way they have behaved. What you owe both is the same chance to make their case, on the same facts, by the same day. That is the whole definition of fair used here. It does not mean identical outcomes, and it does not mean you must take the higher number.

Checking that both parties are serious in the same way

Before you design a process for two, confirm that you have two. A party that has expressed curiosity is not a party that can close, and running a formal process around one real buyer and one spectator wastes the real buyer’s patience.

Apply the same four tests to each, in the same words:

• Who is the party, and is the person writing to you authorized to commit it, or acting for someone who is?
• Why this string? A reason that fits the party’s business is a better sign than enthusiasm.
• Who decides on their side, and how long does that decision ordinarily take?
• Can they pay through onchain escrow, and have they done so before, or will they need time to arrange it?

The answers need not match. What matters is that both were asked the same questions, and that you know what each needs in order to reply by a given day. If one party fails the tests, return to an ordinary conversation with the other; keeping a weak party in the process as decoration is not an option.

Equal information: one file, two readers

The rule is simple to state and tedious to keep: whatever one party knows about the TLD, the other knows too, and learns it at the same moment.

The way to keep it is to stop answering parties and start maintaining a file. Prepare one set of documents describing the asset, and send that same set to both on the same day, each under its own confidentiality agreement. A typical file for an onchain TLD holds the string and the registry it is recorded on, a pointer to the public registry record, which either party can open on a block explorer and read for itself, the state of the names issued under the TLD, which of those names you hold yourself and are prepared to transfer with it, the terms on which the TLD takes part in the registry’s royalty program if it does, and anything you know that a reasonable buyer would want to know before paying, including what is unfavorable.

Then handle questions in a way that keeps the file single. When one party asks something about the asset, write the answer once and send it to both, without saying who asked. A numbered list of questions and answers, added to as you go, works well. Both parties end the process having read the same list.

Not everything belongs in that shared list. The distinction is between facts about the asset and matters that belong to one party alone.

Two points in that table deserve a word. First, unfavorable facts go in the shared column. If the royalty program terms have to be confirmed with the registry before closing, or if names under the TLD belong to third parties and will remain theirs, both parties learn it from you, early, in writing. A fact that one buyer discovers in its own checks and the other never hears about is an inequality you created by staying quiet.

Second, a question can reveal the asker. If one party asks whether the TLD could carry names for a network of clinics, repeating the question to the other tells it something about its rival. Rewrite such questions to the general point before you share the answer: here, whether you as holder have placed any restriction on who may be issued a name. If a question cannot be generalized without exposing the asker, it is about that party’s plans and not about the asset, and the answer goes to that party alone.

One timetable, stated once to both parties

A timetable is fair when both parties receive it in the same words on the same day, when it was built around what both can meet, and when it does not move for one of them alone.

Set it after you know each party’s approval chain, not before. Ask each how long it needs from receiving the file to making a considered offer, and take the longer of the two answers as your starting point. A slower process costs you a little time. A process one party could not keep up with costs you a buyer, and leaves you negotiating with the other from a weaker position than you think.

1. Process letterSend both parties the same letter on the same day. It states that another party is interested, without naming it, and sets out the stages, the dates and the form an offer must take.
2. File and questionsBoth receive the same file. Questions are accepted until a stated day, and every answer about the asset goes to both.
3. OffersEach party submits one written offer by the same day and hour, in the format you asked for. You do not open or discuss either before that moment.
4. ClarificationYou may ask either party to explain a term you do not understand. You do not ask either to improve it.
5. DecisionYou choose within the period you announced and tell both on the same day, the selected party first.
6. ClosingThe selected party proceeds to contract and to onchain escrow. The other is released in writing.

The process letter is the document that makes the rest possible. It is short. It tells each party that it is not alone, which is a fact it is entitled to and which you should not dress up. It tells them how many rounds there will be, and the honest answer is one. It tells them what you will weigh besides price. And it tells them what happens to the party that is not selected: a prompt answer, and continued confidentiality.

Extensions are where a sound timetable goes wrong. One party will ask for more time; someone is traveling, a committee did not meet. You have two honest choices. Refuse, for both. Or grant it, for both, and tell the other party the same day that the date has moved and to when, without saying why. Granting it quietly to the one who asked is the single most common way a fair process stops being one.

Asking for best terms without running an auction

An auction, in the plain sense, is a process where each bidder learns something about the other bids and is invited to beat them, round after round. It can produce a high number. It also produces a buyer who feels it overpaid, a loser who feels used, and a holder who has disclosed to each party what the other was willing to do. For a quiet, single asset sold between a few parties, the costs usually outweigh the gain.

The alternative is one sealed request. You ask each party, in identical words, for the best terms it is prepared to offer, and you tell it truthfully that there will be no second round. Each party then answers a different question from the one an auction poses. Not “how little more than the other must I pay” but “what is this worth to us, and what can we commit to”. A party that knows it will not get another turn puts forward its real position.

The request works only if three things are true, and you should write all three into the process letter.

It is the same request. The same wording, the same day, the same format for the reply. If you ask one party for a price and the other for a price plus a timetable and conditions, you cannot compare what comes back.

It is the last request. If you say there is one round, there is one round. A holder who collects two offers and then goes back to the lower bidder to say “you are a little short” has run an auction after promising not to. Parties and their advisers learn quickly which holders mean it.

It asks for terms, not only a number. Tell both what you will weigh. Price, certainly. Also how certain the offer is, what it is conditional on, how quickly the party can close, how it will pay, and what it expects from you afterward. A party that knows certainty counts may remove a condition it would otherwise have kept in reserve.

What you may say about the competition is limited and should be decided in advance. You may say that another party is in the process, because it is true and each party would act differently if it believed it were alone. You may not say who, how keen, how far along, or at what level. You may not describe the other offer as “strong” or “close” or anything else. Adjectives about a rival’s offer are price signals with the number filed off.

Comparing two offers that differ in more than price

Two offers for the same TLD almost never differ in price alone. One is higher and conditional on a board approval. The other is lower, unconditional, and ready to fund escrow. Deciding between them is a judgment, and the fair way to make it is against criteria you fixed in a private note before either offer arrived, so that you do not discover afterward that the criteria favoring the offer you like were the important ones.

Read conditions most carefully. An offer subject to further checks is an offer to keep talking. Ask, in the clarification stage, what exactly remains to be checked and how long it will take. This is a clarification, permitted for both parties, and it is different from asking for improvement: you are trying to understand the offer as made, and you are not inviting a better one.

If the two offers are close enough that you cannot separate them, resist the pull toward a tiebreak round nobody was promised. Choose on certainty of closing. A holder who cannot choose can also, honestly, tell both that the offers were too close to separate and that a single further round will be held, on the same day and the same terms for both. That is a change to the process, announced openly, and both parties may decline it.

Confidentiality between the two parties

Each party is covered by its own confidentiality agreement with you. Neither is party to the other’s. This means that everything you learn from one of them, including the bare fact that it is interested, is something you have agreed not to pass on, and the other party is exactly the person most interested in hearing it.

Using the same agreement text for both removes one more place where they could be treated differently. Hold to these lines:

• Neither party learns the other’s identity, sector, size or intended use.
• Neither learns the other’s offer, in amount or in outline, before or after the decision.
• Neither receives a document prepared by or for the other.
• The same people do not carry both conversations in a way that lets one bleed into the other. If you work alone, keep the two correspondences in separate threads and reread before sending.

There is one limit you should be candid about, with both parties and in the same terms. The registry record of an onchain TLD is public. After closing, anyone can see on a block explorer that the token moved and to which wallet. The record does not carry a company name, but the unselected party will be able to see that a transfer took place and when. Confidentiality in a process like this covers what you say and what you send. It does not make a public record private, and you should not promise that it does.

What a fair process forbids the holder

Most of what makes a two-party process unfair is done by the holder, in pursuit of a slightly better price, and most of it looks harmless at the time. It is worth stating as rules.

The last of these deserves more. If one of your two parties is an organization whose mark matches the string, and the other is not, you hold a fact that could be turned into pressure: the suggestion that if the brand owner does not pay, the name will go to someone else who might use it in ways the brand would dislike. Do not make that suggestion, and do not let it be implied. A brand owner is entitled to take part in the process on the same footing as anyone else, to be told the same things, and to decide on the merits. If the other party’s intended use would plainly trade on the brand owner’s reputation, the answer is to decline that party, not to use it as a threat. The desk’s own rules of engagement are published on the site.

Declining the second party cleanly

Once you have chosen, the unselected party is owed three things: a prompt answer, a plain one, and continued discretion.

Prompt. Tell it on the day you tell the selected party, and within the period your process letter announced. Do not hold it in reserve “in case the first one falls through” without saying so. If you want a reserve, ask for one openly, as described below.

Plain. The message can be four sentences. You have decided to proceed with another party. You are grateful for the time and care it put into its offer. Everything it shared with you remains confidential, and its documents will be returned or deleted as the agreement provides. You will write again only if circumstances change and it has said it wishes to hear. Nothing more is needed.

What to leave out matters as much. Do not state the winning price or how far apart the offers were. Do not say what it would have taken. Do not criticize its offer or its conduct. Do not suggest that an improved offer might still be considered; if the process is over, an invitation to bid again is an auction held with one bidder who has just been told it lost. And do not explain your reasons in detail. You are free to give a general one, such as certainty of closing, if you can do so without describing the other offer.

The question of a reserve. Sales do sometimes fail between the decision and closing, even when closing is to run through onchain escrow. It is legitimate to ask the unselected party whether it would like to be told if the TLD becomes available again. Ask it as a question, accept either answer, and make clear that it is under no obligation and that its offer is treated as lapsed. What is not legitimate is to keep it waiting, without telling it where it stands, so as to have a fallback at no cost to you.

Setting the process up before you answer either party

If you have two parties and have not yet replied to the second, the most useful hour you can spend comes before any reply. Write the process letter first. Put the same standard mutual NDA before both. Form your own view of the number, for which a private valuation gives a basis independent of either offer. Decide the number of rounds, the dates, the format of an offer and the criteria you will weigh, and write your own note of those criteria. Assemble the one file, including the points that do not flatter the asset; the TLD Readiness Score is a quick way to see which of those points a buyer will ask about. Only then answer both parties, on the same day.

If you have already told one party things the other has not heard, repair it before going further. Send the second party what the first received, and tell both from that point that the process is the same for each. An inequality corrected early and openly does little harm. One discovered later, by the party that lost, does a great deal.

Some holders prefer not to stand between two parties themselves, particularly where they know one of them or wish to stay unnamed. A holder in that position can give Hush Partners a sell-side mandate. The desk does not name the seller, a single named partner stays with the file until closing, and the same mutual NDA applies to each party’s exchanges. The fee is a fixed amount, not a percentage, and only the holder who mandates the desk pays it. The stages of a file show where such a process sits between mandate and transfer. Whoever runs it, the first step is the same: write down the rules before you speak to either party again.

Questions people ask

What if one party withdraws before offers are due?

Tell the remaining party, the same day, that the process described in the letter no longer applies, and continue as an ordinary negotiation. You need not say why or who left. What you may not do is let it go on preparing a final offer against a rival that is no longer there.

Can I simply accept the first offer if it is good enough?

Only if your process letter left that open. If you told both parties that offers are due by a given day, accepting one before that day breaks the promise made to the other. A holder who wants the freedom to accept early should say so in the letter, to both.

What if both parties ask me to deal with them exclusively?

A request for exclusivity is a request to end the process in that party’s favor before it has made its best offer. You can decline it for both, on the ground that the process letter already sets out how the choice will be made. Exclusivity belongs after the decision, for the selected party, for the limited time needed to sign and close.