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[kenL]

I and many others all quit lending on Prosper while our ROIs were still positive.

According to how I calculate ROI, you were negative while you were still lending. Your $900 loan with 24 inquiries was already late before you stopped lending.

First, this was a social loan based purely upon forum participation and I have stated many times that I do not hold any grudge upon Prosper for allowing this loan to be originated or for in any way enticing me into the loan. This loan was purely my decision and other than the later lender side accounting issues with the bankruptcy, Prosper held to their contracts.

I considered it a social loan gift that was wholly separate from the rest of my Prosper loans. I thought of this one like Kiva. I never counted it in my returns. Notice that it was a very bad by the numbers E with only a 15% state capped rate. There was no way that a loan like that would have ever been funded except as a social loan.

If you remove that loan from the ROI calculations, I still had a positive return. In fact, if you don't count that one loan, I came out $42.49 ahead (not counting taxes).

Other lenders on that loan might not like your casual attitude, especially since you are the first or second biggest lender.

[ira01]

Lol you've been saying the same bullshit for quite a while now Ira.

And it is as true now as it was the first time I said it.

[ira01]

I know, I know, now that lenders are getting good returns, returns are no longer the issue. Do I have that right?

Returns have never been the issue. It has always been management and their refusal to abide by their fiduciary duties and their willingness to ignore the terms of their contracts with the lenders.

Ira and I and many others all quit lending on Prosper while our ROIs were still positive.

+1 on all of the above, including my positive ROI.  I publicly quit lending when Prosper took one of its increasingly anti-transparent moves in September or October 2007.  At the time, IIRC, Lendingstats had my ROI at around 7%.  Even Ken's current site shows me with a positive ROI back then.

[Beerbud1]

Nobody has mentioned the obvious. New Money=New venture capitalist=New board of director member!

[Xenon481]

Other lenders on that loan might not like your casual attitude, especially since you are the first or second biggest lender.

If you search the old Prosper forums, you will see that there was much community support from a social perspective on the loan. The threads surrounding the loan and its various listings were the peak of true P2P lending on Prosper. Shortly after that is when Prosper started banning lenders for talking to borrowers even when the borrower requested the interaction.

[kenL]

I know, I know, now that lenders are getting good returns, returns are no longer the issue. Do I have that right?

Returns have never been the issue. It has always been management and their refusal to abide by their fiduciary duties and their willingness to ignore the terms of their contracts with the lenders.

Ira and I and many others all quit lending on Prosper while our ROIs were still positive.

+1 on all of the above, including my positive ROI.  I publicly quit lending when Prosper took one of its increasingly anti-transparent moves in September or October 2007.  At the time, IIRC, Lendingstats had my ROI at around 7%.  Even Ken's current site shows me with a positive ROI back then.

Yup, that's right.

I'm not making any excuses for Prosper, but things were bad back then and they were doing what they could to right a sinking ship. They made plenty of mistakes and Ira and plenty of others have good reason to hold a grudge. If I was an active forum person back then, I probably would have a grudge today too.

God-Father recently posted something like "I'm a greedy investor making money lending to needy people" that pretty much sums up my attitude too. I'm convinced that Prosper has learned from it's mistakes (at least most of them) and now they have a great lending model. Profitability is still far away, but they are light-years closer now then they ever were during 1.0 (because lenders are actually earning money). With such high returns now possible, generous bonuses and funding that should last for a couple of years; I just can't resist lending. So I'll continue to be a Prosper backer. I do however appreciate the knowledge, insight and opposing viewpoints that I find here.

[kenL]

Other lenders on that loan might not like your casual attitude, especially since you are the first or second biggest lender.

If you search the old Prosper forums, you will see that there was much community support from a social perspective on the loan. The threads surrounding the loan and its various listings were the peak of true P2P lending on Prosper. Shortly after that is when Prosper started banning lenders for talking to borrowers even when the borrower requested the interaction.

Thanks for the background. I wasn't lending back then, so I didn't see that p2p interaction peak.

[ira01]

I'm not making any excuses for Prosper,

Actually, you are.

but things were bad back then and they were doing what they could to right a sinking ship. They made plenty of mistakes and Ira and plenty of others have good reason to hold a grudge. If I was an active forum person back then, I probably would have a grudge today too.

God-Father recently posted something like "I'm a greedy investor making money lending to needy people" that pretty much sums up my attitude too. I'm convinced that Prosper has learned from it's mistakes (at least most of them) and now they have a great lending model. Profitability is still far away, but they are light-years closer now then they ever were during 1.0 (because lenders are actually earning money). With such high returns now possible, generous bonuses and funding that should last for a couple of years; I just can't resist lending. So I'll continue to be a Prosper backer. I do however appreciate the knowledge, insight and opposing viewpoints that I find here.

Personally, I don't choose to invest my money with unethical companies that constantly mislead people, and that repeatedly act as if contracts and laws were mere suggestions, to be ignored whenever convenient.  You are, of course, entitled to make different decisions.   

[Cushie]

I was wondering how long it would take nora to add something worthless to this discussion.

Classy.  I thought Nora made a good point.  Evidentally, you did too or else you'd refute her with something substantial.

[SLN]

I Just noticed this regulatory filing today:
http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=7659903

Here is the key piece:
"Prosper issued and sold to such Share Purchasers (either directly or through certain of their respective affiliates) 23,222,747 shares of the Company’s Series E Preferred Stock (the “Shares”) for an aggregate purchase price of $17.15 million."

Does anyone know if that makes this a down-round?

[alexpkeaton]

This strikes me as similar to Groupon. Apparently it costs them like $1.40 to produce $1 in revenue. The more money Prosper raises the faster they can lose it through lender and borrower incentives.

[xraider]

I know, I know, now that lenders are getting good returns, returns are no longer the issue. Do I have that right?

Returns have never been the issue. It has always been management and their refusal to abide by their fiduciary duties and their willingness to ignore the terms of their contracts with the lenders.

Ira and I and many others all quit lending on Prosper while our ROIs were still positive.

+1 on all of the above, including my positive ROI.  I publicly quit lending when Prosper took one of its increasingly anti-transparent moves in September or October 2007.  At the time, IIRC, Lendingstats had my ROI at around 7%.  Even Ken's current site shows me with a positive ROI back then.

Same.  I had a positive ROI when I stopped lending.  I stopped lending because I didn't like Prosper's surreptitious changes to its contracts, and I declined to sign the new LRA.  My ROI remains positive.  I continue to have problems with Prosper, most recently with its apparent inability to schedule its own monthly payments on the ch 13 bankruptcy in which it failed to file a timely proof of claim.  Prosper agreed to make monthly payments on that loan five months ago; three of the five payments were made only after I reminded Chris Larsen that the payments were overdue. 

[TotoMMB]

This strikes me as similar to Groupon. Apparently it costs them like $1.40 to produce $1 in revenue. The more money Prosper raises the faster they can lose it through lender and borrower incentives.

I'm guessing they hope to get enough funds recycling through that they can juice the returns then quit the incentives. With RR and WB2 in over $1M each, I think they may be a better marketing ploy than incentives. Get the masses thinking: "Hell, if these two are playing with that much, what's the harm in dropping $100?". That $100 becomes $120, which all gets reinvested, and so on.

[ResearchPro]

I'm convinced that Prosper has learned from it's mistakes (at least most of them) and now they have a great lending model.

Actually this is what I'd like to hear more about.
I'm greedy lender as well and unlike some here bad ROI was never an issue for me. However I do have concerns about 1) Prosper failing after burning the VC's cash and 2) Prosper altering the deals as it did before. What convinced you that (2) will never happen again?

P.S. Saw a comedy somewhere with Darth Vader altering the deal with Lando about 10 times in a row forcing him to ridiculous things... Why not Prosper?

[kenL]

I'm convinced that Prosper has learned from it's mistakes (at least most of them) and now they have a great lending model.

Actually this is what I'd like to hear more about.
I'm greedy lender as well and unlike some here bad ROI was never an issue for me. However I do have concerns about 1) Prosper failing after burning the VC's cash and 2) Prosper altering the deals as it did before. What convinced you that (2) will never happen again?

P.S. Saw a comedy somewhere with Darth Vader altering the deal with Lando about 10 times in a row forcing him to ridiculous things... Why not Prosper?

I think the most important lesson they learned is that lenders need to be happy. If lenders are not happy, Prosper will fail and I think they know that now.