VCs Starting To Figure Out There's Money In Online Sex Businesses

from the what-took-you-so-long dept

Mon, Jul 30th 2007 1:04am — Carlo Longino

While venture capital funds have flowed into all sorts of internet-related businesses, they've largely ignored adult-oriented ones, despite the opportunities that market offers. But, the IHT reports, that may be starting to change as VCs get over the stigma of investing in porn companies or other adult-related businesses. While some people say "investment tastes" may be changing, it seems more likely that the VCs' need to find good deals is trumping their moral objections or comfort levels, as they face increasing competition for deals and growing displeasure from their backers about mediocre returns on their investments. On these fronts, sexually oriented businesses are a winner, since relatively few firms want to invest in them, while the market for adult content and other products and services can be a money-spinner. Still, it's early days, and many VCs (or the limited partners who back them) don't want to invest in porn or other sex businesses -- but it looks like that resistance may be lessening as the desire for cash wins out.

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Filed Under: porn, vc

11 Comments

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Bornis Henley, 30 Jul 2007 @ 2:39am

Just what we need. More internet porn. I'd like to see the sticky mess these VCs get into when that particular bubble bursts....
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Phil MacCrevice, 30 Jul 2007 @ 4:29am

I see nothing wrong with this, as long as they invest safely and take care not to blow their wads too quickly. A slow, steady buildup should guarantee maximum payload in the end.
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Sanguine Dream, 30 Jul 2007 @ 5:23am

No suprise...
The desire for cash winning out over morality? In the corporate world this should not surprise anyone.

And a special LOL at comment #2.
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Dirk Diggler, 30 Jul 2007 @ 5:59am

Aggressive thrusting...
It's about time these namby-pamby venture capitalists showed some genitals and chose to penetrate this engorged market aggressively. If they time their thrusts just right, they're sure to create overflowing returns.
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Witty Nickname, 30 Jul 2007 @ 6:01am

My Prediction
This market will explode rather quickly, then end just as quickly as it started while this may please the Adult Industry the VCs will leave unfullfilled and disappointed.

Next thing you know the VCs will give birth to another industry.
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Border, 30 Jul 2007 @ 7:26am

Too many puns
That is a lot of puns. I don't think that investing in something like porn is a bad idea. Just because it isn't "Child oriented". Adults, moral or not, should feel free to enjoy porn. It is the same with alcohol or anything else, used responsibly and in a safe environment (husband and wife's bed room) it is erfecetly fine.
The moral majority who turn their nose up at porn are just repressed. I don't see anything wrong with porn at all, business venture or otherwise.
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Casper, 30 Jul 2007 @ 7:35am

Wow...
All I can saw is wow. The are an overwhelming number of puns for this topic, but I think we have plenty posted already.

In all seriousness, I don't see a problem with it. Investments are investments. The industry is real, it's lucrative, and it's legal. Besides, if you are looking for a stable business model, this industry has been around for centuries.
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Ravi, 30 Jul 2007 @ 8:17am

Wow..me too
Ladies and Gentlemen, fasten your seat belts.
Get ready for the Porn-ogle 1.0!
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Anonymous Coward, 30 Jul 2007 @ 6:46pm

In the end, I don't think that many adult companies will want to give up control to the degree the VCs will want.

It will take the VCs a long time to understand the unique culture of the industry. These companies usually have many business arrangements with their competitors, to a degree unknown in the mainstream business world; and unlike in mainstream, these deals are often sealed by a handshake. Further, these arrangements start, stop and change rapidly as conditions change.

Not the sort of conditions that make outside investors comfortable.

The mistake many people make is, seeing the big bucks in adult, and not understanding the industry.

"Hey! If they can do it, so can I."

Been there - done that for a few years. It's not true about any business and not true about adult.
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antonio person, 2 Sep 2007 @ 4:00pm

Re:
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Curious Investor, 23 Jan 2009 @ 11:42am

AdultVest.com is a good example
Look at www.adultvest.com
They've been around for a little over two years and they seem to be on track. They just launched a site called www.iporn.com in beta and report that they had over 5,000 visits in their first two days even though they haven't made any announements to the public about the site being launched. iPorn.com looks like a winner, I just wish I had the money to invest. Stock market wiped me out.
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