Thursday, October 11, 2007

Notes From Prosper's Hawaii Meet & Greet

Prosper's CEO Chris Larsen participated in a meet & greet organized by Prosper member islandmele this last weekend. At the Honolulu, Hawaii gathering, Chris (noted as CL) did comment on Prosper and answer a few questions from folks. islandmele was kind enough to post her notes from the weekend. Here's the highlight reel as interpreted by me. Go read the original to get it straight from the islander's keyboard:

  1. CL doesn't see profitability for several years. It'll take a 4x - 5x in volume to get there. If (and it's a big if) my estimates of Prosper's cash flow is accurate, that puts their burn rate in the $400 - $500k / month region. This is fair for a startup with a the size Prosper appears to have. The missing detail is how Prosper's expenses scale with loan volume, which I'm sure CL will never reveal.
  2. Some of the features suggested at the Finovate conference should be rolling out shortly. My interpretation is that the new interface showing Prosper data derived default rates should be active in a few weeks. The Prosper data will be refreshed every 30 days (ish). The portfolio's will be some time afterwards.
  3. They're trying hard to get the secondary market in place, but those darn government regulators keep getting in the way (don't they realize that Prosper works at the speed of the internet?!)
  4. Prosper will be showing statistics related to whether friends and endorsements (with and without bids) are statistically significant.
  5. Prosper is looking at raising the max interest rate to 36%. I suggest reading zcommodre's rebuttal if you're a big fan of this idea.
  6. They brought in Doug Fuller to handle ID theft and fraud (on top of improving collections), and can't wait to lock up the bad guys.

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