Great stream of comments, I figured I would weigh in with our experience.

I founded Revel Body (www.revelbody.com) with the goal of using our new vibration motors to build better vibrators. We have been working on increasing the sensation and versatility of our products (more power and a broader range of vibrations than existing products) and removing the drawbacks of noise, reliability, numbness, etc. Right now we build and sell the most powerful, quiet and reliable battery-powered vibrator on the market. It is strong enough for muscle massage and can do things like create underwater suction and vibration (using the backside).

Unlike a lot of brands in the 'sex toy' world, our branding and design aesthetic are purposely designed to be clean, healthy and accessible. We focus on health and wellness as a way to enable consumers to buy and try our product. We want to remove barriers from people trying our products. We believe that the industry could double in size if people we not embarrassed to buy these products, so we are focusing on enabling that. We need to remove stigma, give people permission, etc. Focusing on the many almost endless medical benefits of regular orgasm is our focus right now.

These products are about as intimate a product as anyone can use, but they tend to be called 'sex toys'. This does not do justice to some of the better products our there, but probably is good for cheaper/mass market items. Toys are cheap and do not do anything important, and these are not just for sex in the traditional sense. Some brands are starting to use 'pleasure product', but we are looking for a new name for a high quality category of products like we build. Personal Appliance is too bulky. I would love if someone could put together a new for this category of product which really captures what these products can do.

We launched on Indiegogo, because the biggest crowd funding site would not allow 'sexual' related products. We blew past our goals nicely, but do not think kickstarter will come around and allow other sexual related products.

Unlike other sexual products, we have had good success at raising equity capital. We have done three small rounds which closed very fast and we ended up leaving many investors on the outside. I think our experience was different because we had a technology disruption story that made sense as well as being able to point out the many ways in which the industry is mainstreaming and growing rapidly. These points create a path for a company that can disrupt and industry as well as lead the charge to make it mainstream, which will lead to a great exit when a big consumer product is looking to enter this industry (they will want the best brand and technology). Other companies like Crave (raised $2.4M to angels), and Pipedream and Peekay show that mainstream PE money is entering this space.

There are ways to position companies for investment if you understand how investors view these kinds of investments; they are looking for an exit based return and to be part of something cool. Think of what kind of company would be bought (build versus buy decision). On being part of a cool startup, I think it is difficult to imagine better cocktail party talk than being part of a disruptive vibrator company. Companies in this space will probably do better with angel investors than with VCs, many VCs are funded by institutional funds which limit investment into 'morally questionable' activities (think fun stuff like sex, drugs, tobacco, rock and roll).

Like other sexual start-ups, we have had a lot of issues with other companies not wanting to do business with us because our sexual nature or association/proximity to porn start-ups. This includes banks, merchant accounts, advertisers (Facebook included), retargeting ads, etc. It is ridiculous but if you plan for it, you can work around it.

Lots of interesting things going on here...