SAN FRANCISCO—A recent split into adult and mainstream divisions at social network Zivity.com was a strategic decision, not evidence of a planned exit from the adult sphere as erroneously reported last week by an adult industry resource.
“We’re still in adult,” Editor-in-Chief and founder Cyan Banister told AVN, adding that the company's new mainstream counterpart—a wholly separate entity—can be found on the web at TopFans.com.
Zivity, which focuses on artistic nude photography, attracted the adult entertainment industry’s attention last year when it secured $7 million in financing from traditional Sand Hill Road-based venture capital firms. To date, even the mildest forms of adult entertainment have struggled to gain the interest of mainstream venture capitalists.
As the company grew, Banister explained, several new ideas developed and showed revenue potential. Specifically, she mentioned celebrity fan portal TopFans.com and the MySpace application “War of the Roses.” As these products gained momentum, the company had to make a decision about where its priorities would lie.
“Few start-ups are able to succeed with multiple products early on,” Banister explained.
Spinning off TopFans increased the chances of two successes, she added.
Investors were given the choice of staying with Zivity or shifting their interest—and their money—to TopFans. Most of the angel investors stuck with the former, while the venture capital investors opted for the latter. Banister cited the likelihood of a shorter time to exit with TopFans as the primary reason for the movement of those who opted in that direction.
Like the investors, Banister had to choose, and she opted to stay with Zivity. She does not have a financial stake in TopFans.
But “we’re all still family and friends,” she said, emphasizing that all parties were satisfied with the result.
Under the split agreement, TopFans took 75 percent of the $4 million in funds remaining and six employees. Banister and two other employees remained at Zivity and retained the balance of the cash.
“We’re going to be lean, which makes sense,” she said.
By keeping the company’s expenses down, Banister expects Zivity to be profitable in the near future. Instead of racing to meet a short-term exit strategy, she said she prefers being able to let Zivity grow “at its own pace.”
