# Presentation: 706205

## FDICAdvisory Committee on Economic InclusionMarch 28, 2007

## First Wave (Web 1.0)

**What was New?**
- Streamlined existing processes
- Value creation = disintermediation
**What was the Same?**
- Source of value was the company
- Company dictated the product

-             Offline                               Online                Market_      _

## Second Wave (Web 2.0)

**What is New?**
- Value creation: communication, community, commerce
- Source of value is people
- Company is servant infrastructure

-              Web 1.0                         Web 2.0               Market_      _

## Prosper is like an “eBay” for Money

- Marketplace for Money
- Brings together borrowers with people who have money to lend
- Administers lending process including payments and collections
- Open access to Consumer Credit Market
- Anyone with as little as $50 can lend
- Community decides where and why to grant credit
- Leverages power of community
- Groups, friends and endorsements provide
- Vouching benefit
- Shame factor

## Backing

**Series A & Series B**
- $20 million raised
**Outside Directors**
- Jim Breyer, Accel Partners
- Wal-Mart, Facebook
- Bob Kagle, Benchmark Capital
- eBay, E-Loan
- Larry Cheng, Fidelity Ventures
- Verid Board
- Paul Hazen
- former CEO Wells Fargo

## Prosper’s Early Results

- Users:               			235,000
- Loans by $:   	     	    $47,000,000
- Borrower Loans:                		    8,800
- Promissory Notes:			450,000
- Payments to Lenders:	        1,200,000
- Discussion Posts:			260,000

## High Growth, Good Credit Quality

## Loan Listings

## Listing Summary

## Credit & Employment Data

| AA | A | B | C | D | E | HR |
| --- | --- | --- | --- | --- | --- | --- |
| +760 | 759-720 | 719-680 | 679-640 | 639-600 | 599-560 | 559-520 |

## Description

## Group Information

## Endorsements

## Questions & Answers

## Bid History

## Lender Bidding

## Estimated ROI

## Diversified Lender Portfolio

## Transaction fees

- BORROWER
- Closing fees

**1% ****	****AA - D**
**2% ****	****E - HR**
- Min. $25

- LENDER
- Servicing fees

**0.5% ****	****AA - A**
**1% ****	****B - HR**
- Per annum

- BORROWER
- Failed
- payment fee

**$15**
- First incident
- per billing
- period

## What We Do/ What Community Does

- What we do
- Perform ID, security, BSA, and bank account validation
- Handle loan disclosures and privacy protection
- Administer loan servicing and collections
- Set Marketplace standards, rules, and etiquette
- What community does
- Makes credit and pricing decisions
- Leverages reputation through groups and endorsements
- Introduces and helps new members
- Monitors and reports unacceptable behavior

## Per Loan Economics

|   | Prime | Near-Prime | Sub-Prime |
| --- | --- | --- | --- |
| Average Loan | $8,000  | $7,500  | $3,100  |
| Total Revenue | $195  | $245  | $150  |
| Origination Expense | ($13) | ($18) | ($42) |
| Servicing Expense | ($12) | ($17) | ($23) |
| Gross Margin | $170 | $210 | $85 |
| Marketing Expense | ($100) | ($90) | ($65) |

## Returns by Grade

|   | AA | A | B | C | D | E | HR |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Net 
Interest | 10.35% | 12.2% | 14.3% | 16.4% | 19.9% | 22.0% | 20.% |
| Net
Defaults | -0.7% | -1.4% | -3.4% | -4.0% | -7.9% | -18.7% | -27.8% |
| Net
Return | 9.6% | 10.8% | 10.9% | 12.4% | 11.9% | 3.3% | -7.0% |

|   | Prime | Near
Prime | Sub
Prime | Total |
| --- | --- | --- | --- | --- |
| Net 
Interest | 11.4% | 16.9% | 21.3% | 16.5% |
| Net
Defaults | -1.1% | -5.1% | -24.0% | -8.0% |
| Net
Return | 10.3% | 11.8% | -2.7% | 8.5% |

## Borrowing Groups

## Borrowing Groups

## Group Leader Rewards

- Match Rewards
- (Paid by Prosper)

**0.5% ****	****AA – D**
**0% ****	****E – HR**
- Percentage of loan amount

- Payment Rewards
- (Optional, paid by members)

**1% ****	****AA – A**
**2% ****	****B – D**
**4% ****	****E – HR**

## 3rd Party Applications

## Research Papers

## Prosper in the News

## Prosper in the Blogs

## Prosper Community Meet & Greets

- New York (cellardoor)
- NorCal (BigGulp)
- SoCal (DebInVenice)
- Atlanta (PolarC)