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Raising Capital

Stephen Yagielowicz
Recently, XBIZ World magazine asked a group of industry leaders, "How did you raise the capital for your adult venture?"

Here's what they had to say:

"With Search Extreme, there were three partners involved at the start, and two of us conveniently had some disposable savings. We were both young, making money and without a family or a mortgage to worry about. So basically, we decided to each sink a bunch of cash into getting this thing off the ground. At the time it was a little more of a drain on my cash flow than I would have liked, but in retrospect, I'm glad we could do it all in-house. Seven years later, with good money flowing into the company every month, it's nice not to have any investors or outside partners to worry about."
— Adam Grayson, President, SearchExtreme.com

"During and after I attended college, I was a high-volume nightclub bartender. Besides prepping my alcohol tolerance for adult industry shows, it also allowed me to earn a great living while having five days off a week to pursue and finance my business ventures. While I am extremely satisfied with running my company full time, I still miss slinging drinks from time to time. Bartending allowed me to pursue some great business opportunities, and I never let myself forget how lucky I was to have a job that paid all my bills while working fewer than 20 hours a week."
— Todd Spaits, CEO of YanksCash and The Pocket Network

"I actually started out in the business in the fall of 2000 with zero startup capital. I began by promoting sponsor sites using free hosting and accessing the Internet with an old AOL dial-up account. Within just a few months, I was making a very lucrative living with a handful of sponsors. Eventually my wife suggested that we start a paysite featuring our adventurous sexual lifestyle. NaughtyAllie.com and its sponsor program, NaughtyBank.com, were launched in April 2003. We've continually reinvested a certain percentage of our profits into the site. That's what has gotten us to the point we're at today including the recent launch of our new site, NaughtyJulie.com."
— Jake Chase, Owner, NaughtyBank

"I never raised any capital. In 1995, I spent a few days and no money building my sex toy site by myself. In fact, rather than spend $10 per image to scan pictures, I actually drew pictures of dildos in Illustrator to save money. I opened my store in 1995 and started getting one order per day. I didn't even purchase a merchant account until I knew I would get orders. By the time I got the merchant account, I had almost 20 orders that I had been holding for a few weeks waiting for the merchant account to come through. Thus, to answer the question, I have no idea how to raise money, but I am good at building businesses with no capital."
— Dave Levine, Owner, Convergence Inc.

"GTS was a self-funded endeavor and took very little money to start up, however it was a lot of work. I invest in commercial and residential real estate with some adult investors who wish to diversify their portfolios, so when I look for capital for properties, I always run it by my other regular investors before I go out to the market. If you are looking to start a venture that requires venture capital, I would highly suggest opening a dialogue with other adult associates of yours that you trust and currently do business with."
— Mark Hurson, President, Gallery Traffic Service

"I wish that I had a really cool story to tell everyone about how Made in Porn came to be Tanker's and my program. The truth is we did what a lot of new businesses do: We went to the bank and asked for a loan. The bank essentially told me that I did not have a leg to stand on. So I went to the bank of mom and dad with a business plan. We explained in detail how we thought our 10 years of combined adult experience could make this program grow. They co-signed the loan at the bank the next day, and we hit the ground running and haven't stopped since."
— Princess Ellisa, Princess of Everything, Made In Porn

"I remember it was 1999 and I was trying to get some venture capital funding to start an online dating company. No one was interested without wanting an arm and a leg. So with only $15,000 and with a lot of blood, sweat and tears, I created my first dating site and affiliate program. Almost seven years later it's a multimillion-dollar company and alot of blood, sweat and tears."
— Allan Henning, CEO, DatingGold.com

"Brett and I started off Sammy4u.com very slowly, and we supported it and ourselves with income from an adult entertainment dance company we owned. We had no experience in any type of online business, and I had just learned how to work a computer when Sammy4u was launched. We had a lot to learn, but we eventually did and were able to sell our dance company a few years ago. We now rely solely on Sammy4u.com for our income and even employ an affiliate manager and a programmer. Our little home-based company is growing up, and we couldn't be happier with it."
— Sammy4u, Owner and Model, SammySmack.com

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