Each deal is individually negotiated, a process which can take months, but one of the more common financing agreements he’s structured involve the startup paying some portion of a fair price up front (usually 1/3 or 1/2) and getting three years to build out their business. At the end of three years, the domain owner can opt to get 0.1-1% of the company’s equity or buy back the domain for $1 if the business fails.
Another interesting deal structure he’s brokered is the 99-year lease model. In this arrangement, the value of a domain is paid out to the owner in what is effectively a lifetime annuity (ex: $4000 a year). Should the business fail, the seller simply gets the domain back and retains all accrued earnings from the lease.