Ron Suber - Prosper

CROWDFUNDING: PAST, PRESENT, FUTURE

2PROPRIETARY & CONFIDENTIAL . © 2013

► NOT NEW► 17th century to fund books► 1884 to fund Statue of Liberty pedestal

► A collective effort to network, pool money via the internet

► Activities include:► Disaster relief/charity► Support of artists, movies, video games, entertainment► Political campaigns► Start up/acceleration company funding► Civic projects/community oriented

► Originated from Crowd Sourcing – small contributions from many parties

Crowdfunding (Crowd Financing, Equity Crowdfunding, Crowd Sourced Fundraising)

AIDEA

ZCOMPLETION

CROWDFUNDING IS HERE.

10-25%

3

FUNDS AS DONATION OR SECURING INVESTMENT?

PROPRIETARY & CONFIDENTIAL . © 2013

Crowdfunding Models

Interest payment on top of capital payment - also known as peer to peer finance

Fund in exchange for equity hoping value goes up or dividend

1. Debt Based

2. Equity Based

Reward those who provide support early on

Combination of the above

% of gains distributed to investors

4. Gifts, virtual thanks, mention in the credits

3. Profit sharing

5. Hybrid model


Different Approaches

All or Nothing

Money only collected if

target dollar amount met

Keep It All

Funds collected are kept

whether target amount is

reached or not

Bounty

Give the funds collected

upon project

completed/success


Benefits & Challenges

BENEFITS

► Financial gain

► Raise profile and reputation

► Marketing, awareness, branding

► Feedback

► Replaces email marketing

► Breaking local boundaries – opens the world

► Lessens the battle for initial stage

capital sourcing

► Easily and safely expands number

of supporters

► More diversified investor base

CHALLENGES

► Little or no “IP” protection

► Once posted – easy to copy

► Costs (Paypal, site and rewards for supporters)

► Failure

► Fraud

► Donor exhaustion

► Scam, abuse, regulatory

► Realistic

► No buzz/promotion

► Articulate the story and the edge

► Need a social network

► Vet the idea before funding request


Crowdfunding Platforms

And many more…

2001

•ArtistShare

2006

•Pledgie•Sellaband

2008

• Indiegogo•GiveForward

2009

•Kickstarter•Rocket Hub•Fundly

2010

•Micro-Ventures

2011

•FundaGeek•EarlyShares

•Abundance (UK)

2012

• Funded By Me (Sweden/Norway)

• Seedmatch (Germany)

2013

•Additional countries including Finland, Canada and Italy

In US

In Europe

•Fundable

UK


The Crowdfunding Landscape

US

Additional countries:► Finland► Canada► Italy

Sweden and Norway

Germany

12

3


Conditions for Crowdfunding

Human nature: People want to help

GoodwillSocial aspect

OK to failLots of ideas and

projects

Easy and almost free (40+ sites to promote)


In The Media

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► Regulatory: Work closely with Regulators to help shape the governance going forward.

► Education: Focus on educating both sides of the marketplace, without a common understanding of benefits difficult to have the two sides exchange value.

► Scale: Identify key market segments to promote the platform – rate of adoption will dramatically increase with the right message to the right segments.

► Efficiency: Once value exchange is created, tirelessly work to improve efficiency to lower costs for both sides of the platform.

► Technology: Makes all of the above possible – also changing very quickly. Building a nimble platform allows for the marketplace to adapt to the needs of both constituents quickly.

Success Doesn’t Happen Overnight


Where Does the Crowdfunding Industry Go From Here…Possibilities

► One aggregate platform above each site

► Mobile

► The future of small business funding

► Reduces friends and family round

► Crowd funding and Non-banks such as Mint, Prosper and Lending Club are among dozens of new companies shaping the way customers raise capital, lend, invest, pay, transact, save and plan

► Peer-to-Peer foreign currency exchange to make it cheaper, quicker, easier and more efficient to send cash abroad as well as pay in multiple currencies

► Even more open-source, developer-friendly “API's” for permission-based access to financial accounts enabling quicker funding, less theft/fraud and more crowd funding solutions to raise capital, borrow, lend and invest


This Is Just The Beginning


This Is Just The Beginning

Thank you


Disclosures

Neither Prosper Funding LLC nor Prosper Marketplace, Inc. are registered as an investment adviser with any federal or state regulatory agency. The information contained in this presentation is for informational purposes, and should not be construed as individually tailored investment advice or as a recommendation with respect to any security or investment approach. This presentation has been prepared without regard to the circumstances and objectives of the conference’s participants and should not be relied upon as authoritative or taken in substitution for the exercise of judgment by any participant. Each participant should consider the appropriateness of any investment decision having regard to his or her own circumstances, the full range of information available and appropriate professional advice. Prosper Funding LLC and Prosper Marketplace, Inc. recommend that each participant seek independent investment and financial advice concerning any services or investments discussed in this presentation.

Notes are offered pursuant to the Prospectus which accompanies this presentation and which is also available at www.prosper.com/prospectus. Persons considering investing in Notes should review the Prospectus in its entirety.


http://www.prosper.com/prospectus

http://www.prosper.com/prospectus

Ron Suber - Prosper

Economy & Finance

Transcript of Ron Suber - Prosper