Crowdfunding: Past, Present, Future

7/30/2019 Crowdfunding: Past, Present, Future

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CROWDFUNDING:

PAST, PRESENT, FUTURE


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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)

A

IDEA

Z

COMPLETION

CROWDFUNDING IS HERE.

10-25%


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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


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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


The Crowdfunding Landscape

US

Additional countries: Finland

Canada

Italy

Sweden and Norway

Germany


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1

2

3


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



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



This Is Just The Beginning


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.

http://www.prosper.com/prospectushttp://www.prosper.com/prospectushttp://www.prosper.com/prospectushttp://www.prosper.com/prospectus

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Crowdfunding: Past, Present, Future