Feb 5, 2008 02:20 PM
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Tue Feb 9
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Why doesn't venture capitalt get involved in the porn business? It's not because of morals: This is Sand Hill Road we're talking about. The real problem, reports AVN, is that porn deals are too small. "Why would I invest $100,000 in anything?" one private equity fund manager complains. "For me, that could be one day's trading gains or losses." The other problem is that porn investments don't have great exit strategies. Porn IPOs are rare and there isn't a Google of porn to sell out to — though Penthouse, newly bulked up with AdultFriendFinder.com, is getting closer.
Still, some say porn industry consolidation is around the corner and that's reason for hope. New VC firm AdultVest is betting on it. Though one private equity expert says porn peddlers won't get anywhere with VCs until they look more SIlicon Valley. Ditch the pimp hats and chains and "at least [wear] khakis and a blue Brooks Brothers blazer," she said.
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