Prosper.com and Pierre Omidyar in March 2007 Fast Company | P2P Lending, Peer to Peer Lending, People to People Lending

I read a variety of magazines, but my favorites are the new breed of magazines about business: Business 2.0, Fast Company, Entrepreneur, etc…

In March 2007 addition of Fast Company there is an interview with Pierre Omidyar. Pierre Omidyar is a founder of EBay and a multibillionaire because of it. He is interested charitable foundations like many of the newly minted technocracy. However, after a brief stint (4 years) setting up a charitable foundation he changed directions with his plans for helping the world. In 2004 he founded the Omidyar Network to create social value. What is somewhat unique is that he funds both public sector and private sector businesses. He feels that businesses because the are beholden to the bottom line have better built in feedback mechanisms for tracking progress…

FC: What’s a recent investment that really demonstrates this mission of fostering self empowerment, and how did you evaluate it?

Omidyar: There’s an online, peer-to-peer lending business called Prosper. It follows an arbitrage model that manages risk by pooling lenders and borrowers. We looked for three organizational attributes. The first is connection — Prosper connects people through a marketplace. The second is ease of access, which Prosper has because it’s on the Internet and it’s transparent. Finally, there’s ownership — a sense of having skin in the game. Prosper gives people a platform, but individuals self-organize into their own groups. If a borrower defaults on a loan, the pool of lenders loses the money. Early on, we didn’t think many for profit companies would fit all three criteria, but we’ve found more than we expected.

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