FAQs on running a porn company
Over the recent weeks, I’ve received several questions about what it’s like to run an adult company & my thoughts on some aspects of the industry. In this post, I’ll cover a couple of the most common questions.
What are the legal considerations when starting an adult business?
From a regulatory standpoint, we had to adhere more towards banking regulations than those of individual governments. This means following rules such as the Mastercard ones and just the general GDPR. We also had to ensure that we had systems for consent verification & performer verification. Beyond that, towards the end of Freyja, regulations changed with the age law coming into effect for users. The issue we always found with legal considerations was that we always assumed there would be more, and those that did exist were unclear and often problematic for varying reasons.
Who are the main investors in this space? Was it VC & Private Equity?
Most VC & Private Equity companies legally are not allowed to invest in the “sin industries” including cannabis, gambling & pornography. This is usually do to their LPs (who invested in them). Therefore, most adult companies are either self-funded or funded via Angel investors.
How did we find funding for an adult company?
Freyja ran a pre-seed and a seed funding round. Both rounds only contain angel investors & no institutional investors. We found these angel investors originally via personal networks from our previous jobs & then the rest we found via conferences & cold outreach.
Did the cultural stigma of running an adult business impact the founding team?
This depends on whether the stigma affected the business or our personal lives.
In regard to affecting the business, this was certainly a challenge as the stigma meant we struggled to get bank accounts, investment and more. This perhaps had the largest negative impact on our company.
In terms of the impact on our personal lives, this varied. You definitely noticed that some people you would encounter instantly would have a particular perception of you and wouldn’t understand that you are running a tech company. All they would see is porn, and this often came with a whole host of comments and judgements. That being said, you learnt how to manage this and not take anything personally.
How do you advertise your porn company?
You aren’t allowed to advertise on Google, Meta, LinkedIn & all the other traditional methods that most other startups can rely on. Equally, on social media, you have to be careful what you say about your company, as this can get you banned…
To advertise, we started off with influencer/creator marketing. The creators often brought in their traffic. On top of this we would advertise on Traffic Junky which is an adult advetising service. However, we stopped advertising with them as they got cut off from their Mastercard payment processing, and the only way to pay them was via Crypto or large wire transfers…
In the end, our most effective advertising method ended up being Instagram via comedy videos combined with our creator-influencing strategy.
How do you find creators to join your site?
When we started Freyja, we already knew a couple of performers who made up the Freyja performer board. They then introduced us to more creators to start our initial base. After that, we had several recruiters who were creators themselves. This then in turn, led to a network effect of people joining the site.
What are the ethical considerations when running an adult business?
There are several ethical considerations. One of the largest ones that we faced was how to keep harmful and illegal content off our site. This is when you have to make a decision on how you want to moderate, what type of safety systems you want to put in place and how strict you will be on your guidelines. Another ethical consideration is your performer's treatment. If you are a hosting platform (not a studio creating content), then you must think about what support resources you’ll offer to the creators & how best to support them.
Lastly, another large consideration is the impact you can have on viewers, and thinking about how to showcase more ongoing consent & disclaimers so that people can get a balance between viewing content they desire but also understanding the difference between adult content and real life.
How did those around me respond to me starting an adult company?
To many people’s surprise, the reaction of my family was positive. Of course, there were natural concerns. However, most everyone was supportive and behind the mission of wanting to make the industry safer. I’d say the more negative or challenging reactions to navigate came from those whom I didn’t know well, & in dating/friendships.
What are the legal considerations when starting an adult business?
From a regulatory standpoint, we had to adhere more towards banking regulations than those of individual governments. This means following rules such as the Mastercard ones and just the general GDPR. We also had to ensure that we had systems for consent verification & performer verification. Beyond that, towards the end of Freyja, regulations changed with the age law coming into effect for users. The issue we always found with legal considerations was that we always assumed there would be more, and those that did exist were unclear and often problematic for varying reasons.
What are the main financial costs when running a porn company?
The largest expenses we ended up facing were around payment processing. This is because, as an adult company, you have to use high-risk processors that take over a 7% charge on individual payments. This then combines with having different types of banks that can take 1% on inbound and outbound payments. These charges really ended up racking up and making profits smaller.
How did you handle illegal content?
We designed a pre-moderation system, which meant that all content was reviewed before going live. Equally, all creators were ID verified with several reference photos and context presented to moderators. We also had a consent tagging and approval system for third-party content. For our guidelines, we designed a traffic light system, which you can read more about in my book.
Lastly, why would you start such a company?
I saw the connection between bad sex education and porn & decided that I wanted to do something about this. So, for some reason I decided that I was going to build a safe porn site myself rather than wait for someone else to do it.
Have any other questions about running an adult company? Leave a comment or DM me.
If you want to learn more about the industry, then read my book now! Buy it now.