Prosper.com Microfinance - SVMN.net mtg 2007-09-10

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Prosper.com presentation at 9/10/07 SVMN meeting.

Published in: Business, Economy & Finance

Prosper.com Microfinance - SVMN.net mtg 2007-09-10

  1. Prosper Marketplace
  2. Prosper is like an “eBay for Money” <ul><li>Marketplace for money </li></ul><ul><ul><li>Brings together borrowers with people who have money to lend </li></ul></ul><ul><ul><li>Administers lending process including payments and collections </li></ul></ul><ul><li>New asset class </li></ul><ul><ul><li>Anyone with as little as $50 can lend </li></ul></ul><ul><ul><li>Community decides where and why to grant credit </li></ul></ul><ul><li>Leverages power of community </li></ul><ul><ul><li>Groups and endorsements provide shame, acquisition and support </li></ul></ul>
  3. Existing Consumer Credit Markets Institutional Markets - Wall Street Community Lending - Early US S & L’s - Informal Asian Lending <ul><li>Good : borrower shame/loyalty </li></ul><ul><li>Good : low marketing costs </li></ul><ul><li>Bad : risky - no diversification </li></ul><ul><li>Good : great diversification </li></ul><ul><li>Bad: no borrower loyalty </li></ul><ul><li>Bad : high marketing costs </li></ul>= Borrowers = Lenders
  4. Prosper combines best of both markets Group Leader marketing = Lenders = Borrowers = Group Leader Lender diversification Borrower reputation Friends, Endorsements reputation/marketing
  5. <ul><li>$900 billion US credit card market </li></ul><ul><li>Announced Japan JV - $200 billion market </li></ul>Market Size – Unsecured consumer credit Source: SMR Research 2005 and Financial Services Agency of Japan 2006
  6. Prosper Stats Users: 410,000 Loans by $: $87,000,000 Borrower Loans: 15,000 Promissory Notes: + 1.2 million Payments to Lenders: 2,500,000 Discussion Posts: 370,000
  7. Backing <ul><li>VC Backing </li></ul><ul><ul><li>$40 million raised </li></ul></ul><ul><li>Outside Directors </li></ul><ul><ul><li>Jim Breyer, Accel Partners </li></ul></ul><ul><ul><ul><li>Wal-Mart, Facebook </li></ul></ul></ul><ul><ul><li>Bob Kagle, Benchmark Capital </li></ul></ul><ul><ul><ul><li>eBay, E-Loan </li></ul></ul></ul><ul><ul><li>Larry Cheng, Fidelity Ventures </li></ul></ul><ul><ul><ul><li>Verid Board </li></ul></ul></ul><ul><ul><li>Paul Hazen </li></ul></ul><ul><ul><ul><li>Former CEO Wells Fargo </li></ul></ul></ul>
  8. Listings
  9. Listing Summary
  10. Group Information
  11. Endorsements from Friends
  12. Bid History
  13. Deep Operational Integration Banking and Finance Collection Agencies Credit Reporting Agencies Anti-Crime Scheduled: Fall ‘07 Scheduled: June ‘07 Scheduled: Fall ‘07
  14. First Wave (Web 1.0) <ul><li>What was New: </li></ul><ul><ul><li>Streamlined existing processes </li></ul></ul><ul><ul><li>Value creation = disintermediation </li></ul></ul><ul><li>What was the Same: </li></ul><ul><ul><li>Source of value was the company </li></ul></ul><ul><ul><li>Company dictated the product </li></ul></ul> Offline Online Product Books Stocks Loans
  15. Second Wave (Web 2.0) <ul><li>What is New </li></ul><ul><ul><li>The Source of Value changed </li></ul></ul><ul><ul><ul><li>The Company  The People </li></ul></ul></ul><ul><ul><li>The Company’s Role changed </li></ul></ul><ul><ul><ul><li>Central Role  Supporting Role </li></ul></ul></ul><ul><ul><li>The Exchange of Value changed </li></ul></ul><ul><ul><ul><li>Company-to-People  People-to-People </li></ul></ul></ul>Web 1.0 Web 2.0 Product Video Guides Loans
  16. But what about all the other Web 2.0 Stuff? <ul><li>XML </li></ul><ul><li>AJAX </li></ul><ul><li>ASP </li></ul><ul><li>RSS </li></ul><ul><li>Wiki </li></ul><ul><li>SOAP and WSDL API’s </li></ul><ul><li>Big Rounded Logos </li></ul>X No People = No Value
  17. What if there were no people?
  18. Range Of Issues <ul><li>State licensing requirements </li></ul><ul><li>State usury and fee limitations </li></ul><ul><li>Securities laws – state & federal </li></ul><ul><li>State disclosure requirements and other lending regulations </li></ul><ul><li>Truth in Lending Act </li></ul><ul><li>Equal Credit Opportunity Act/discrimination laws </li></ul><ul><li>Fair Credit Reporting Act </li></ul><ul><li>Fair Debt Collection Practices Act/state collection laws </li></ul><ul><li>Electronic Funds Transfer Act </li></ul><ul><li>E-SIGN Act/Uniform Electronic Transactions Act/UCC Article 3 </li></ul><ul><li>FTC Act and Unfair and Deceptive Trade Practices Acts </li></ul><ul><li>Federal (Gramm-Leach-Bliley Act) and state privacy laws </li></ul><ul><li>Data security laws </li></ul><ul><li>Bank Secrecy Act/USA PATRIOT Act/OFAC </li></ul><ul><li>Money Transmitter Licensing </li></ul><ul><li>Federal Deposit Insurance </li></ul><ul><li>Bankruptcy </li></ul><ul><li>Tax </li></ul><ul><li>Website agreements and disclosures </li></ul><ul><li>ACH authorizations </li></ul><ul><li>Communications Decency Act </li></ul>

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