Friendfinder sounds like the quintessential investment prospect for venture capitalists. Based in Palo Alto, California, the company operates social networking sites that boast 140,000 new registrants per day, and $200 million in annual revenue.

But the company’s main site, Adult Friendfinder, helps people meet for the purpose of having sexual liaisons. The content, including explicit photos and Adult sex sites language, has been a turn-off to mainstream investors.

“Over the last 10 years, we’ve met with a dozen venture capitalists,” said the company’s founder, Andrew Conru, who holds a doctorate in engineering from Stanford University. “The conversations end fairly quickly.”

Times and investment tastes may be changing. Conru said that in recent months he has gotten more sustained interest, and follow-up calls, from potential investors. More generally, mainstream venture capitalists and private equity funds are starting to show interest in companies that make and distribute pornographic entertainment, and sexually related products and services. (…)

JimmyJane, a San Francisco company that sells designer sex toys, has among its investors six individual venture capitalists. The company’s chief executive said he was near to closing a $3 million to $5 million round of funding with one or more funds - not merely individual venture capitalists but marquee funds. (…)

Imboden, the chief executive of Jimmyjane, said that he believed what attracts venture capitalists to adult-oriented companies is what usually attracts them: the opportunity to fund innovative products that can change or takeover markets.

{ International Herald Tribune | Continue reading }