As an adult business owner seeking funding, you may find it tricky, as many VCs and angel investors actively avoid the adult industry due to societal pressures and the risks it entails.
However, as society’s views on porn, sex toys, and sexual wellness change, and the growing popularity of ethical porn websites, there has been a rise in investors choosing to invest in porn sites.
Welcome to the world of ethical investing; Adult Site Broker has broken down what an ethical investor is and how your porn site could potentially seek funding in the future.
What is Ethical Investing?
As the name suggests, ethical investing aims to create investments that benefit the world while generating profits for investors. When it comes to the adult industry, this may be a bit of a tricky topic, as many ethical investors avoid the adult industry, alongside companies that are involved in tobacco, guns, and animal testing, have bad workers’ rights principles, and the gambling industry.
The overall aim of ethical investing is for investors to choose companies that align with their personal values, morals, and principles.
In the past, because of this, many investors have actively avoided what they call ‘sin stocks,’ particularly adult companies. However, as society changes and the views around porn, sexual wellness, and sex change, so too have many ethical investors’ personal views on the adult industry.
Positive vs. Negative Screenings
There are currently two main ways ethical investors screen a potential industry or company before investing in it.
Firstly, positive screenings are when a company is evaluated and rewarded for its positive impact on society and the environment. Examples include businesses that uphold social responsibility, human rights protections, sustainability, and positive employment practices.
The second option is negative screening, in which ethical investors exclude companies for unethical business practices. This may also be used to exclude certain industries, including pornography, due to their perceived unethical or immoral standings.
Depending on which type of screening an investor uses, it can be harder for an adult business, such as a porn website or sex toy company, to gain investments, but that doesn’t mean that there aren’t ethical investors willing to invest, such as those who use positive screenings to invest in sustainable sex toy businesses.
What Does Ethical Investing Within The Porn Industry Look Like?
If an ethical investor chooses to invest in an adult business, there are three main ways to do so. In the section below. We will walk through all three.
Stocks And Shares
One of the most popular ways to invest is to buy company stocks, as they tend to outpace inflation, safeguard wealth over the long term, and allow investors to maximize their returns. Over the past few years, porn companies, condom manufacturers, and even sexual enhancement companies have opted to become public companies. This allows ethical investors to buy shares in these companies.
Investment Funds
Another approach is to invest through an ethical fund offered by an asset management company, such as an actively managed mutual fund. The fund manager will then screen potential companies based on an ethical code. Investors are happy to do this as they can profit from investment funds in three ways: The fund may earn interest and dividend payments from its holdings. The fund may earn capital gains from selling assets held in the fund at a profit.
Ethical ETFs
The final way is an ethical ETF, or an exchange-traded fund traded on the stock exchange. ETFs own financial assets such as stocks, bonds, currencies, debts, futures contracts, and/or commodities such as gold bars.
Many ETFs offer some level of diversification compared with owning a single stock. Because of their diversity, ETFs have become popular, offering investors greater protection and lower risk than stocks.
What are the key criteria for ethical investing in the adult industry?
You must meet their criteria once you have identified a potential investor for your adult business. Below, we have set out the main criteria for ethical investments to help you prepare.
Mission Statements
Your mission statement should set out your company’s vision, including any ethical, moral, or sustainable values you have. It gives potential investors their first glimpse of your company before they decide whether to evaluate you, so make it stand out.
Fair Labor Practices
They should demonstrate that you care about your staff. This can include making sure you are safeguarding your porn stars from harm, including mandatory STD checks, set working hours, and even maternity leave.
Age Verification and Model Release Forms
Strict age-verification and consent practices demonstrate that you operate ethically and for the good of society, and that you uphold your legal responsibilities, making you a strong candidate for potential investors.
Companies’ Code Of Ethics
Having a code of ethics in place that your company can be seen as following is crucial to helping an ethical investor choose you during the screening process.
Content Ownership/Copyright Protections
Having the correct paperwork for your website’s content, such as copyright protections and content licenses, can help you appear ethical to an ethical investor and showcase your ethical business practices.
Conclusion
While gaining investments as an adult company is still tricky, as the times change and more ethical porn sites launch, there has been a surge in potential ethical investment opportunities for the industry that wouldn’t have been found a couple of years ago. However, as you start investing, ensuring your mission statement and paperwork are in order is crucial to winning your pitch.
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