Crowdfunding has existed for centuries but has recently grown substantially through online platforms. It allows individuals and organizations to raise money from many people for projects or ventures. There are different crowdfunding models including debt, equity, profit-sharing, and rewards-based. Major platforms like Kickstarter and Indiegogo have facilitated billions of dollars in funding. However, crowdfunding also faces challenges like lack of intellectual property protection, failure risk, and potential fraud or scams. The future of crowdfunding may include greater mobile access, reduced small business funding barriers, and increased foreign currency exchange capabilities.

1. CROWDFUNDING:
PAST, PRESENT, FUTURE

2. Crowdfunding (Crowd Financing, Equity Crowdfunding, Crowd Sourced Fundraising)
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NOT NEW
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17th century to fund books
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1884 to fund Statue of Liberty pedestal
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A collective effort to network, pool money via the internet
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Activities include:
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Support of artists, movies, video games, entertainment
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Political campaigns
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Start up/acceleration company funding
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Disaster relief/charity
Civic projects/community oriented
Originated from Crowd Sourcing – small contributions from many parties
10-25%
Z
COMPLETION
A
IDEA
CROWDFUNDING IS HERE.
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3. Crowdfunding Models
FUNDS AS DONATION OR SECURING INVESTMENT?
1. Debt Based
Interest payment on top of capital payment - also known as peer to peer finance
2. Equity Based
Fund in exchange for equity hoping value goes up or dividend
3. Profit sharing
% of gains distributed to investors
4. Gifts, virtual thanks, mention in the credits
Reward those who provide support early on
5. Hybrid model
Combination of the above
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4. Different Approaches
All or Nothing
Keep It All
Bounty
Money only collected if
Funds collected are kept
Give the funds collected
target dollar amount met
whether target amount is
upon project
reached or not
completed/success
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5. Benefits & Challenges
BENEFITS
CHALLENGES
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Financial gain
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Little or no “IP” protection
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Raise profile and reputation
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Once posted – easy to copy
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Marketing, awareness, branding
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Costs (Paypal, site and rewards for supporters)
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Feedback
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Failure
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Replaces email marketing
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Fraud
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Breaking local boundaries – opens the world
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Donor exhaustion
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Lessens the battle for initial stage
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Scam, abuse, regulatory
capital sourcing
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Realistic
Easily and safely expands number
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No buzz/promotion
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Articulate the story and the edge
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Need a social network
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Vet the idea before funding request
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of supporters
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More diversified investor base
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6. Crowdfunding Platforms
2001
• ArtistShare
2006
• Pledgie
• Sellaband
2008
2009
• Indiegogo
• GiveForward
• Kickstarter
• Rocket Hub
• Fundly
2010
• MicroVentures
2011
2012
• FundaGeek
• EarlyShares
• Fundable
• Abundance
• Funded By Me
(UK)
(Sweden/Norway)
2013
• Additional
countries
including
Finland,
Canada and
Italy
• Seedmatch
(Germany)
In US
And many more…
In Europe
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7. The Crowdfunding Landscape
Sweden and Norway
Germany
UK
Additional countries:
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Finland
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Canada
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Italy
US
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8. Conditions for Crowdfunding
3
2
1
 Human nature:
People want to
help
 Goodwill
 Social aspect
OK to fail
Lots of ideas and
projects
Easy and almost free (40+ sites to promote)
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9. In The Media
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10. Success Doesn’t Happen Overnight
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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.
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11. Where Does the Crowdfunding Industry Go From Here…Possibilities
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One aggregate platform above each site
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Mobile
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The future of small business funding
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Reduces friends and family round
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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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12. This Is Just The Beginning
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13. Thank you
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14. 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.
PROPRIETARY & CONFIDENTIAL
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