An Adult Anti-Portfolio

TechCrunch is reporting that Penthouse may have agreed to pay $1 billion to acquire Various, an operator of sex-social networking sites like AdultFriendFinder. That’s more than 3x Various’ $300 million in annual revenue, and may be the largest sale price ever for a consumer Internet company that never received a dime of venture capital funding.

AdultFriendFinder was bootstrapped due to mutual distaste. VCs were a bit too prudish to invest in a company whose stated mission was to help users find consenting sex partners – they’d instead prefer to invest in technologies that are used to distribute porn, so long as they can also distribute home movies and Star Wars mash-ups.

Founder and CEO Andrew Conru also wasn’t terribly interested in attracting outside capital, having been disappointed with the amount of money he’d made on a prior VC-backed deal. As he told CNN.com: “When you start out, you don’t need a lot of money, as the Web 2.0 crowd finally figured out. All I really needed was a computer.”

Had VCs known that the company would eventually be worth $1 billion, they probably would have gotten over their embarrassment. Conru is laughing all the way to the bank…

As an aside, there is now a “private equity” group completely dedicated to the adult entertainment market. It’s called AdultVest, and founded by a former Wall Street hedge fund manager named Francis Koenig. See more below, from a recent episode of the dearly-departed On The Money:
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