Donuts

Type:	Privately held
Industry:	Internet
Founded:	2010
Founder(s):	Paul Stahura Jonathon Nevett
Headquarters:	1720 205th Place NE Sammamish, WA 98074
Country:	USA
Website:	donuts.co
Key People
Paul Stahura, CEO Jonathon Nevett, EVP Daniel Schindler Executive Officer Richard Tindal Mason Cole, VP of Communications Elaine Pruis, VP of Operations

Donuts is a start-up company that was created to apply and run new gTLDs as made possible by ICANN's gTLD expansion program; it was co-founded by Paul Stahura, Jonathon Nevett, Richard Tindal, and Daniel Schindler. In April 2011, the company was in stealth mode and raising capital; based on the company's filing with the Securities and Exchange Commission (SEC), Donuts raised $1 million equity financing. Since then it has submitted 307 gTLD Applications and secured an initial investment of $100 million in financing, and a subsequent round of an undisclosed amount though apparently it "almost doubles" its reserves. The second round of funding was earmarked specifically for gTLD Auctions to resolve its 158 contention sets. The company's headquarters is located in Sammamish, Washington.

In September 2012, Donuts was ranked #14 in The Wall Street Journal's Top 50 Start-Ups for 2012. It was also the newest start-ups on the list.

New gTLD Applications

On June 5, 2012, Donuts announced that it submitted applications for 307 generic top level domain names (gTLDs), including IDN TLDs, and secured $100 million in capital from multi-billion dollar private equity and venture funds.

According to Daniel Schindler, one of Donuts' four co-founders, the company originally came up with a list of 3,000 prospective domain names. He said, "We made a long list of dictionary terms, in multiple languages and character sets. We created our own proprietary way of valuing the [gTLDs], and that helped us narrow it down. But 307 is still a lot, obviously."

At one point, an article from Bloomberg reported that the company plans to apply for 10 gTLDs. Mason Cole, the company's Vice President of Communications and industry relations explained that the reporter from Bloomberg misunderstood or had miscommunication with Stahura. He said that at the time of the interview, the exact number of the gTLD's to be applied for hadn't been finalized. Mr. Cole also said that the company is well prepared to operate all the 307 gTLDs.

In terms of intellectual property rights protection, the company said that it created rights protection mechanisms for new gTLDs and it will implement an open Internet philosophy. According to Stahura, "The Internet is an engine of information, ideas and commerce, and one that’s not restrictive unnecessarily. Donuts intends to preserve that openness for all users, not operate a ‘by invitation only’ section of the Internet." This statement can be seen to reference the plans of other large portfolio applicants such as Google and Amazon, that are not only applying for brand TLDs for exclusive corporate use, but are also applying for generic terms with no plans to offer public registration.

Partnerships

Donuts signed a strategic partnership with Demand Media in pursuit of certain gTLDs. According to a press statement, under the agreement, Demand Media has the right to acquire some of the approved gTLDs applied for by Donuts. Furthermore, Demand Media's wholly owned subsidiary, Demand Media Europe Limited, will serve as the back-end registry service provider for Donuts.

In October 2012, Donuts announced that they would use Architelos' NameSentry software-as-a-service to detect and mitigate domain name abuse. The patent-pending NameSentry application protects new gTLDs from phishing, malware, spam, botnets and other types of abuse. It is the first independent, third-party resource of its kind for the domain name industry.

Auctions

During ICANN 45 in Toronto, auction expert Peter Cramton outlined a private gTLD auction model as a solution for resolving 158 new gTLD contention sets. Donuts co-founder Jon Nevett says that Donuts will handle as many of its contention sets as possible via this method, as auctions will be cheaper and faster for applicants than ICANN's original method. "The cost of losing an ICANN auction is greater than the cost of losing a private auction," Nevett said. "If you lose an ICANN auction you get nothing, zero, you lose your asset... [but with private auctions] it doesn't hurt as much to lose, so the theory is the second-place guys won't stretch as much."

GAC Early Warnings

Donuts received 49 GAC Early Warnings, which represents about 17% of its portfolio. The Early Warnings do not constitute GAC consensus and only represent one government's view. The large majority of Donuts' warnings came from the Australian GAC Representative and GAC Chair, Heather Dryden. She stated that a number of their strings were related to regulated markets and that Donuts had not sufficiently addressed verification or protection mechanisms to prevent consumer fraud and confusion. This arguably can be seen as a result of Donuts filing ever one of their applications with the exact same wording, and not addressing the relevant market at hand. Ms. Dryden issued the most of any GAC representative, and also warned some of Donuts' largest competitors, such as Google and Amazon, that they should not be allowed to obtain a generic word, such as "blog", and use it for their sole corporate purposes. Donuts does not propose any closed TLDs and consequently can be seen to benefit from those style of warnings.

PICs

Donuts submitted a Public Interest Commitment (PIC) for every one of its gTLD applications. PICs are voluntary amendments that applicants can create, sign, and undertake along with the general registry agreement in order to hold their registry operations to certain standards. They seem to originally have been developed as a way to allow applicants to appease GAC members that may be concerned about how their application stands as is, or how ICANN will be able to ensure a potential registry remains compliant with its aspirations and mandate as it defined in its summary of its proposed operations in the TLD application. Prior to PICs, there was no clear way of defining operating procedures when moving from the long form essays in the TLD application to the Registry Agreement.

The PICs Donuts submitted largely reinforce the best practices and protections it defined in its applications. The PIC submission process and proposed New TLD Registry Accreditation Agreement controversially include provisions giving the ICANN Board the unilateral right to amend further agreements and restrict registries to working with registrars that have signed a non-existent but forthcoming update to the 2009 Registrar Accreditation Agreement. Donuts notes in its PICs that it does not support these provisions.

Their PICs provide for: open registration policies; geographic names protections; frequent Whois database audits; establishment of a Domains Protected Marks List (DPML); establishment of a claims notification service for additional trademark protection; binding registrants to terms of use that define abusive behavior; reservation of the right to exclude non-compliant registrars from distribution; reserve the right to suspend, cancel, or otherwise take control of names that are suspected or proven of being involved in abusive activities; and maintaining a clear, singular point of contact for all abuse related correspondence.

DPML

Donuts, in its applications and PICs, has propose the creation of a Domains Protected Marks List (DPML). The service seems to be based on ICM Registry's "Sunrise B" service implemented during the launch of .xxx. In its PICs, the company describes this as, "a trademark protection service that allows rights holders to reserve registration of exact match trademark terms and terms that contain their trademarks across all gTLDs administered by Registry Operator under certain terms and conditions." Donuts' Richard Tindal has since given greater body to the current thinking on the functioning of the DPML, including:

• Companies can block exact matches of trademarks, and domains that include the exact match of the trademark along with other terms
• Each domain blocked by DPML will need its own block, that is, a company cannot block "company name" from being used across all second level domains in Donuts' TLDs but must register each domain independently.
• The standard for a trademark is whether or not it is listed in the official Trademark Clearinghouse
• A domain can be unblocked by a company that has a matching trademark registered in the Trademark Clearinghouse
• The DPML listings will be available for either 5 or 10 years.
• Pricing will be between 5 - 10% of the cost of a normal registration

Demand Media has also committed to using a form of DPML for its own applications, as noted in its PICs. The company has close ties to Donuts.

Donuts Team

The management team of the company include:

• Paul Stahura, Co-founder and CEO
• Richard Tindal, Co-founder and COO
• Jonathon Nevett, Co-Founder and EVP, Corporate Affairs
• Daniel Schindler, Co-Founder and EVP Sales and Marketing
• Mason Cole, Vice-president of Communications and Industry Relations
• Kevin Wilson, Chief Financial Officer
• Alvaro Alvarez, Vice President and General Counsel

Board of Directors

• Paul Stahura, Donuts Inc.
• Chris Pacitti, Austin Ventures
• Robert Verratti, TL Ventures
• Brian Jacobs, Emergence Capital Partners
• Thomas Ball, Austin Ventures
• Jonathon Nevett, Donuts Inc.

Investors

The company's investors include:

• Austin Ventures
• Adams Street Partners
• Emergence Capital Partners
• TL Ventures
• Generation Partners
• Stahurricane (Paul Stahura's investment fund)

Videos

Mason Cole, Donuts' VP of Communications and Industry Relations, was interviewed at ICANN 44 in Prague:

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Governmental Advisory Committee. Considers and provides advice on the activities of ICANN as they relate to concerns of governments, particularly matters where there may be an interaction between ICANN's policies and various laws and international agreements or where they may affect public policy issues (ICANN Bylaws).

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