Paddle.com: The $275K Domain That Almost Bankrupted a Startup

In 2012, my co-founder Harrison Rose and I founded Paddle with a vision: to simplify payments for software companies. I was 18 years old. Harrison was 22. We had raised $200,000 from angel investors who believed in us despite our age.

And we were about to make the biggest—and riskiest—purchase of my life.

The $120K Domain Decision

From day one, we knew we wanted a clean, brandable, one-word .com domain. We started searching and found Paddle.com available for sale through a broker.

After a few weeks of back-and-forth negotiation, we agreed on a price: $120,000.

Let that sink in. We had raised $200,000 total. We were about to spend more than half of it on a domain name.

But we felt so strongly that a solid .com and brand name were essential to building a serious company. We spoke to our investors and convinced them to extend our round to $320,000—specifically to buy the domain while maintaining the same runway.

We did all the usual due diligence. Trademark checks with our lawyer. Everything came back clear. We closed the $120,000 purchase.

The FedEx Package

A few weeks later, we put up a holding page on Paddle.com and announced to the world what we were building. We were working out of a small corner in one of our investors' offices, excited to be a real company.

The following week, the office manager came up to us with a FedEx package.

"Your first mail!" we thought. "We're legit now!"

We opened it. Inside was a cease and desist letter and an intention to sue for trademark infringement.

The Nightmare Scenario

What? We'd checked! Our lawyer had done comprehensive searches just days before completing the purchase. Everything came back clear. No conflicts. No issues.

Here's what happened: someone had registered the trademark for "Paddle" just a few days earlier—literally days before our lawyer ran the searches. At the time, there was a 5-7 day lag between when trademarks were filed and when they appeared in the online databases lawyers used for searches.

We had checked during that gap. Our timing was impossibly unlucky.

The other company was another seed-stage startup using derivatives of the name: "usepaddle.com" and similar domains. They were building something completely different from us, but they'd filed for the trademark first. By days.

The letter was clear: they owned the trademark. We owned the domain. And those two facts were legally incompatible.

We'd just spent $120,000 on a domain we might not be able to use. And there was nothing we could have done differently to prevent it.

The Impossible Choice

We were stuck. The $120,000 we'd paid was too much money to just walk away from. But it was also more money than the other company had—or was willing to spend—to buy the domain from us.

We couldn't sell it to them. They couldn't outbid us. But they owned the trademark.

In an eerily similar situation to another founder's story, we realized we needed to pay "the other Paddle" to change their name. It was the only way out.

The $155K Buyout

After weeks of going back and forth between lawyers, we reached an agreement:

£120,000 (about $155,000) for them to change their name and assign all the trademarks they'd registered to us.

We did it. Using the remaining $200,000 we had in the bank, we paid them and acquired the trademarks.

That left us with $45,000 to run the entire company.

Operating on Fumes

$45,000. That was our runway. For an entire SaaS company.

Let me put that in perspective:

• We had a team of four people to pay
• We needed servers and infrastructure
• We had office costs (even just a corner of an investor's space)
• We needed to actually build and launch the product

$45,000 gave us maybe two to three months. That's it. Two to three months to build a payments platform from scratch, get customers, and generate enough revenue to extend our runway.

Most startups spend $45,000 on a good engineer for a month. We had $45,000 to build an entire company.

It was terrifying. Walking into that investor's office every day, knowing we'd gambled everything—$275,000—on a domain and trademark battle. Knowing that if we failed, we'd have nothing to show for it except a very expensive domain name we couldn't use.

But it was also the biggest motivator we'd ever had. Failure wasn't an option—we'd already spent everything. The only way out was forward.

So that's exactly what we did. We launched. We got our first customers. We extended our runway with revenue. Every sale felt like oxygen. A few months later, we raised a seed extension that gave us breathing room.

But those first few months? We were running on pure adrenaline and desperation.

The Billion-Dollar Outcome

And the rest is history.

Paddle went on to become a payments infrastructure platform serving thousands of software companies worldwide. We built a company worth over $1 billion.

Was spending $275,000 on a domain and trademark issues a smart decision for a startup with $200K in the bank? Absolutely not.

Was I young, lucky, and a little stupid? Yes.

Did it work? Somehow, yes.

When you're all in, when you've bet everything on your company's name and identity, you find a way to make it work. That desperation, that do-or-die mentality, became our biggest motivator. We'd risked everything for Paddle.com, so we were going to make it count.

And in the end, that $275,000 investment helped us build something worth a thousand times more.