Print

[yankeefan]

Dated today (4/28)- 

Notes are being sold by a California sub  (Prosper Marketplace CA, Inc). 

Haven't read it yet, but did scan to last page, and found this

Material Transactions Between Director and Parent
In April 2009, Christian A. Larsen, the President and Chief Executive Officer of Prosper and Prosper Inc. entered into a Revolving
Loan Agreement with Prosper Inc., extending a line of credit to the company in the principal amount of $1,000,000, with a one year
term, at 12% interest.

ETA-  The prospectus also notes that the loans are being sold under the single state exemption to securities laws, and threatens anyone (lender) who lies about where they live.  I bet they verify all those lender identities!


California Prospectus

[Mtnchick]

Does this mean they ran out of all the VC money or did he just do this to make it look like he was willing to spend his own $$$ instead of everyone else's?

[God-Father]

Does this mean they ran out of all the VC money or did he just do this to make it look like he was willing to spend his own $$$ instead of everyone else's?

It is not uncommon for the VCs to require executives to invest.  I am surprised by 12% 

[Xenon481]

Does this mean they ran out of all the VC money or did he just do this to make it look like he was willing to spend his own $$$ instead of everyone else's?

This means that Prosper is actually two different companies now.  The company that actually sells the "Notes" to "Investors" (read Dumbasses) is chartered only in California and only deals with people in California in order to stay within "Single State" exemptions.

[Mtnchick]

Does this mean they ran out of all the VC money or did he just do this to make it look like he was willing to spend his own $$$ instead of everyone else's?

This means that Prosper is actually two different companies now.  The company that actually sells the "Notes" to "Investors" (read Dumbasses) is chartered only in California and only deals with people in California in order to stay within "Single State" exemptions.

So all the "We really hope Prosper succeeds so we can get the money we put in a long time ago" posts are really useless because Prosper 1 could still be closed down?

[Xenon481]

Does this mean they ran out of all the VC money or did he just do this to make it look like he was willing to spend his own $$$ instead of everyone else's?

This means that Prosper is actually two different companies now.  The company that actually sells the "Notes" to "Investors" (read Dumbasses) is chartered only in California and only deals with people in California in order to stay within "Single State" exemptions.

So all the "We really hope Prosper succeeds so we can get the money we put in a long time ago" posts are really useless because Prosper 1 could still be closed down?

Prosper1 (Prosper Marketplace Inc.) is actually the sole owner of Prosper2 (Prosper Marketplace CA Inc.), so we should still be able to get our money for as long as Prosper2 stays around.  Assuming Prosper2 doesn't eventually split itself away from Prosper1.

[Loan_shark_74]

The way I see it, Prosper created a different company in order to reopen. Prosper 1 is still shut down and in a quiet period, but Prosper 2 is running with all gears in motion. This seems similar to the gimmick they are talking about for GM. GM splits into 2 companies with one company taking on a majority of the bad debt. This way, GM2 can go bankrupt and GM1 can continue to run as normal (but smaller). Prosper 1 attains the legal issues, while Prosper 2 runs free and clear (for now). Am I off base?

[Xenon481]

The way I see it, Prosper created a different company in order to reopen. Prosper 1 is still shut down and in a quiet period, but Prosper 2 is running with all gears in motion. This seems similar to the gimmick they are talking about for GM. GM splits into 2 companies with one company taking on a majority of the bad debt. This way, GM2 can go bankrupt and GM1 can continue to run as normal (but smaller). Prosper 1 attains the legal issues, while Prosper 2 runs free and clear (for now). Am I off base?

But Prosper2 is owned by Prosper1, so if Prosper1 comes into serious financial issues (say by a lawsuit), then they might be forced to liquidate or sell (for a market price) Prosper2 in order to cover Prosper1's legal debts.

[Loan_shark_74]

The way I see it, Prosper created a different company in order to reopen. Prosper 1 is still shut down and in a quiet period, but Prosper 2 is running with all gears in motion. This seems similar to the gimmick they are talking about for GM. GM splits into 2 companies with one company taking on a majority of the bad debt. This way, GM2 can go bankrupt and GM1 can continue to run as normal (but smaller). Prosper 1 attains the legal issues, while Prosper 2 runs free and clear (for now). Am I off base?

But Prosper2 is owned by Prosper1, so if Prosper1 comes into serious financial issues (say by a lawsuit), then they might be forced to liquidate or sell (for a market price) Prosper2 in order to cover Prosper1's legal debts.

I see. So what if they take Prosper 2 public? I bet they try it.

[Xenon481]

The way I see it, Prosper created a different company in order to reopen. Prosper 1 is still shut down and in a quiet period, but Prosper 2 is running with all gears in motion. This seems similar to the gimmick they are talking about for GM. GM splits into 2 companies with one company taking on a majority of the bad debt. This way, GM2 can go bankrupt and GM1 can continue to run as normal (but smaller). Prosper 1 attains the legal issues, while Prosper 2 runs free and clear (for now). Am I off base?

But Prosper2 is owned by Prosper1, so if Prosper1 comes into serious financial issues (say by a lawsuit), then they might be forced to liquidate or sell (for a market price) Prosper2 in order to cover Prosper1's legal debts.

I see. So what if they take Prosper 2 public? I bet they try it.

Then Prosper1 would have a huge infusion of cash with which they "should" be able to pay us if/when legal battles are won.

[Urbi_et_Orbi]

This is lobby-worthy

[Cushie]

Absolutely seconded (can't remember if we have to second the motion, but I surely do).

[cubbiesnextyr]

Does this mean they ran out of all the VC money or did he just do this to make it look like he was willing to spend his own $$$ instead of everyone else's?

It is not uncommon for the VCs to require executives to invest.  I am surprised by 12% 

Me too.  I deal with a lot of business owners who lend their businesses money.  All of them want to charge as little interest as possible to themselves (many want to charge none).  Most owner loans to their own company end up in the 2.5 - 4% range.  12% seems absurd.

[ira01]

Does this mean they ran out of all the VC money or did he just do this to make it look like he was willing to spend his own $$$ instead of everyone else's?

It is not uncommon for the VCs to require executives to invest.  I am surprised by 12% 

Me too.  I deal with a lot of business owners who lend their businesses money.  All of them want to charge as little interest as possible to themselves (many want to charge none).  Most owner loans to their own company end up in the 2.5 - 4% range.  12% seems absurd.

At least it reflects (part of) the risk premium.