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CROWDFUNDING:
PAST, PRESENT, FUTURE
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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)
A
IDEA
Z
COMPLETION
CROWDFUNDING IS HERE.
10-25%
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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
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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
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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
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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
AdditionalcountriesincludingFinland,Canada andItaly
In US
In Europe
Fundable
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UK
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The Crowdfunding Landscape
US
Additional countries: Finland
Canada
Italy
Sweden and Norway
Germany
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2
3
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Conditions for Crowdfunding
Human nature:
People want tohelp
Goodwill
Social aspect
OK to fail
Lots of ideas and
projects
Easy and almost free (40+ sites to promote)
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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 Doesnt Happen Overnight
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Where Does the Crowdfunding Industry Go From HerePossibilities
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
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This Is Just The Beginning
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This Is Just The Beginning
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Thank you
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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. Thispresentation has been prepared without regard to the circumstances and objectives ofthe conferences 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.
14PROPRIETARY & CONFIDENTIAL . 2013
http://www.prosper.com/prospectushttp://www.prosper.com/prospectushttp://www.prosper.com/prospectushttp://www.prosper.com/prospectus