Exit to Community (Part 2 of 4)

7 mins read

Follow the Money

Bootstrapping a dream is all but impossible unless you have a trust fund or significant amount in savings. It’s made even more difficult by the incredible amount of extra work and money it takes to start an Adult company. Apparently, when you’re “prurient,” some folks just don’t want to work with you. 

“The regulation that makes “prurient” businesses ineligible for loans “does not prohibit or regulate speech or require the plaintiffs do anything,” [U.S. Magistrate Judge Laurel] Beeler wrote. “Instead, it embodies the SBA’s policy not to subsidize the prurient businesses’ speech.”

From https://www.courthousenews.com/feds-have-no-duty-to-subsidize-strip-clubs-in-a-pandemic-judge-rules/

In fact, most folx, companies, and services have it hardwired into their TOS:

So what’s a peddler of smut with a vision left to do? 

You spend even more time searching for the services necessary to run your business, because services that don’t have hang-ups about the scarlet letter “P” marked on my forehead are few and far between. More time searching means more money spent, and when you do find those unicorns who say, “IDGAF, just give me your money,” current regulatory and legal climates means they are far more expensive. Being “prurient” or “high risk” comes with the standard “Sin Tax”.

Most businesses offering services in this space know options are limited, so their prices are higher – resulting in things like a few extra percentage points on your processing fees, and a “hold back” in the thousands of dollars to hedge potential chargebacks. Disreputable tech companies will promise you feature rich functionality, and then deliver you code written on an Apple llc.

When the bills start piling up, and you have no more sweat to give, hungry to get your idea off the ground, investor funding has an intoxicating allure. But just like most services have anti-prurient clauses, so do investors in the form of “Vice” clauses effectively cutting you off from institutional funding. 

“Startups in the vice space have historically been underfunded and overlooked by Silicon Valley, largely because of vice clauses: agreements that bar institutional funds from investing in them.”

From “The Companies Venture Capital Isn’t Allowed to Invest In,” Supermaker

Just like the aforementioned services charging a sin tax for being high risk, investors extract the same sin tax from you for being a vice. Services charge higher prices and investors demand more shares/ownership/equity in your project which also comes with  the usual strings attached resulting in loss of autonomy, governance, and vision. Soon your purpose-before-profit turns to profit-by-any-means-necessary. Instead of making decisions for the benefit of your customers, you’re making decisions that make the shareholders money and the investor’s exit as profitable as possible.

Wait….Exit?

What the fuck is an exit? Don’t investors just give you money then reap the benefits of your profit for the life of your company?

Apparently it’s the other thing investors want – an exit. 

“An exit strategy, broadly, is a conscious plan to dispose of an investment in a business venture or financial asset.”

From Investopedia

For most start-ups, an exit happens one of two ways: IPO or Acquisition.

Since an IPO is out of the question for any prurient company (darn those pesky vice clauses), that only leaves Acquisition.  

Acquisition is just a fancier word for “sale,” and your investors have a say in how the sale happens and to whom. This could mean being acquired by groups of nameless, faceless outsiders with their own agendas. Agendas that are more about protecting the platform as a profit making enterprise for themselves, and little to do with reinforcing these platforms as invaluable resources for the sex work community. Agendas which can result in deplatforming sex workers.

“As sex workers are not a protected group under US law, companies and institutions have a wide berth when it comes to setting policies to discriminate against people working in sex related jobs or at sex related companies”

From “Sex Workers use the internet as a harm reduction tool,” HackingHustling

Whether it’s FOSTA/SESTA, COVID, or the relentless pursuit of mainstream attention, companies are definitely taking advantage of their wide berth. Without protections, sex wokers are baring the biggest brunt of  sudden policy changes, stricter regulatory adherance, and brands pivoting away from NSFW.

Screenshot of OnlyFans tweet, May 5, 2020

“Notice how none of the content creators they’re promoting have anything to do with sex work? “ – Presley Peach

If our “purpose” is to be a the first sex worker owned and operated platform cooperative for adult creators, then *waves at all of the above* none of that will do. 

For those of you following along, here’s what we’ve got so far…

  1. To prevent the deplatforming of sex workers, selling the company to outsiders is not an option. 
  2. We also believe the sex work community should own / govern / have power over its own resources.  

What could we do to ensure both? 

Community Acquisition?

Does the community want to own its resources? Is it ready to own its resources?

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