Written by Joseph Viney for Future of Sex. Originally published on February 17th, 2016.
Seeking and securing investment may be the biggest obstacle faced by sex tech. It isn’t just venture capitalists (VCs) who keep adult services at arm’s length. Banks refuse to open business accounts, credit card companies won’t process payments through fear of chargebacks, and a great deal of web hosts still refuse to host “adult”content.
When it comes to companies like PayPal leaving you out in the cold for operating a legal, ethical, and honest business, you’d forgive those on the receiving end of such hostility to wonder if the game is rigged. There’s a common link for this financial shutdown: the collusion against adult services.
What is it that causes investment to be such a thorn in the side of sex tech? Furthermore, who are the people who are responsible for making such decisions?
Who’s who and why not?
VCs have the interests of any number of stakeholders to consider at once, and decisions will be made for the benefit of ”the greater good.” They’re managing too much of too many people’s money to be making such divisive decisions, and so they go for the safer, more traditional options.
According to Gallop, VCs have told her and other sex tech entrepreneurs that they themselves love their ideas, but it’s the people whose money they’re managing who want distance. So VCs are out, unless any have the vision and courage enter into this niche.
“I’ve spoken to other VCs who’ve said ‘I think you’ve really got something here, I totally see the potential but if I took it to my partners they would say, ‘What are you on?’’” says Gallop.
The wisdom of crowds
The stance of “thou shalt not be discussed” posed by a large number of potential investors affects sex tech’s chances of securing investment through another popular method: crowdfunding.
The sense of exclusion is systemic. Kickstarter does not allow any “pornographic material” and even removed the Vibease campaign from its website. Although Indiegogo does allow sex toys, it doesn’t help those offering sex as content or visuals. Tony Been, a company representative, said in February 2014 that “we have some restrictions—we don’t allow fundraising for pornography or violence”.
Successful crowdfunding also requires a large number of people willing to publicly rally around something and attract more people to do the same. Gallop posits that people will very willingly rally around a piece of hardware or video game, but they will not around anything to do with sex.
While it may be true, sex tech hardware has still managed to thrive on crowdfunding platforms. These major successes shouldn’t be overlooked. Dame Products’s hands-free vibrator, Eva, smashed its initial goal by receiving $525,000; ten times more than its target. .
MysteryVibe—whose Chief Technology Officer we spoke to about the plusses and pitfalls of seeking investment—also achieved its crowdfunding aims and gained the momentum setting the company up for a positive year.
There are enough success stories for crowdfunded sex tech hardware for good vibes to weave through the industry, but, for endeavours like MakeLoveNotPorn and their ilk, the problem is less quantifiable and more ingrained in people. Perhaps divine inspiration is needed.