Comments on: Prosper Breaks $10 Million and Lending Club Keeps Rolling On /state-of-the-industry/prosper-breaks-10-million-and-lending-club-keeps-rolling-on/ Your guide to peer to peer lending Sun, 05 Feb 2012 02:58:54 +0000 hourly 1 http://wordpress.org/?v=3.2 By: Dan B /state-of-the-industry/prosper-breaks-10-million-and-lending-club-keeps-rolling-on/comment-page-1/#comment-3980 Dan B Sat, 04 Feb 2012 01:41:52 +0000 /&p=3964#comment-3980 Ryan..............Of course you realize that your 2009 results are extremely "interim" because zero of your 2009 loans (except early pays) have reached completion, right. It's rhetorical because I know that Prosper didn't issue any loans in 2009 until August of that year. Therefore none of those loans will complete their 3 years until at least August of this year. Of course you didn't mention how much you invested each year etc............ But even if we were to take your 2009 numbers as a "final" number, your average annual returns are around 4.5%. So yeah I think you've done great in terms of weathering the early storms. But I can almost guarantee you that 11 months from now your 2009 numbers will not be as eye popping as they are today. Ryan…………..Of course you realize that your 2009 results are extremely “interim” because zero of your 2009 loans (except early pays) have reached completion, right. It’s rhetorical because I know that Prosper didn’t issue any loans in 2009 until August of that year. Therefore none of those loans will complete their 3 years until at least August of this year. Of course you didn’t mention how much you invested each year etc…………

But even if we were to take your 2009 numbers as a “final” number, your average annual returns are around 4.5%. So yeah I think you’ve done great in terms of weathering the early storms. But I can almost guarantee you that 11 months from now your 2009 numbers will not be as eye popping as they are today.

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By: Peter Renton /state-of-the-industry/prosper-breaks-10-million-and-lending-club-keeps-rolling-on/comment-page-1/#comment-3977 Peter Renton Fri, 03 Feb 2012 22:29:45 +0000 /&p=3964#comment-3977 @Dan, I don't consider myself an apologist for Prosper, I just call things as I see them. Now, as you know, I am a glass half-full kind of person, so I feel that both Lending Club and Prosper have a great future. As for interim results you are dead right - I should have said that the interim results of Prosper in 2009-2011 appear to be producing higher returns than the interim results from that period of Lending Club. It is obvious to all that when only looking at completed loans from the periods before 2009 that Lending Club is indeed trouncing Prosper in returns. One last point, I think you will agree that credibility is a subjective thing and you have made your opinions well known. But I have no such concerns with Prosper and that is why I will continue to argue for them. Some investors agree with me and no doubt many agree with you as well. @Ryan, I think anyone who achieved a positive return in Prosper 1.0 has done a very good job. In hindsight it was very smart of you to avoid the E and HR notes because they are the ones that provided the biggest losses. Well done. @Dan, I don’t consider myself an apologist for Prosper, I just call things as I see them. Now, as you know, I am a glass half-full kind of person, so I feel that both Lending Club and Prosper have a great future.

As for interim results you are dead right – I should have said that the interim results of Prosper in 2009-2011 appear to be producing higher returns than the interim results from that period of Lending Club. It is obvious to all that when only looking at completed loans from the periods before 2009 that Lending Club is indeed trouncing Prosper in returns.

One last point, I think you will agree that credibility is a subjective thing and you have made your opinions well known. But I have no such concerns with Prosper and that is why I will continue to argue for them. Some investors agree with me and no doubt many agree with you as well.

@Ryan, I think anyone who achieved a positive return in Prosper 1.0 has done a very good job. In hindsight it was very smart of you to avoid the E and HR notes because they are the ones that provided the biggest losses. Well done.

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By: Ryan /state-of-the-industry/prosper-breaks-10-million-and-lending-club-keeps-rolling-on/comment-page-1/#comment-3975 Ryan Fri, 03 Feb 2012 21:05:41 +0000 /&p=3964#comment-3975 I have had a Prosper account since 2006. Based on Lendstats, my ROI has been decent despite Prosper's early struggle (Investing mostly in A,B,C,D). I excluded 2010 and 2011 because I don't like to have a lot of the data come in before assuming my results. 2006 4.1% 2007 -4.7% 2008 6.2% 2009 13% I recently opened up a Lending Club account only because I am concerned about Prosper getting to profitability (Peter's #3 explanation). Other than this concern, I am quite satisfied with Prosper. I have had a Prosper account since 2006. Based on Lendstats, my ROI has been decent despite Prosper’s early struggle (Investing mostly in A,B,C,D). I excluded 2010 and 2011 because I don’t like to have a lot of the data come in before assuming my results.
2006 4.1%
2007 -4.7%
2008 6.2%
2009 13%
I recently opened up a Lending Club account only because I am concerned about Prosper getting to profitability (Peter’s #3 explanation). Other than this concern, I am quite satisfied with Prosper.

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By: Dan B /state-of-the-industry/prosper-breaks-10-million-and-lending-club-keeps-rolling-on/comment-page-1/#comment-3974 Dan B Fri, 03 Feb 2012 20:47:28 +0000 /&p=3964#comment-3974 Peter........Actually I didn't ask that question, because I know why Lending Club attracts more investors, retail or otherwise. But I do wish you'd resist the urge to be an apologist for Prosper. The sooner they are faced with the many below par things they're doing the better for everyone involved. And as for returns, yes one could argue that they're doing better than Lending Club but then one would be wrong. The key word that is missing is "interim" results Peter, interim results. In every other historical & complete metric, they're not doing better & the future is far from certain. But then you know that. As for reasons..........I could add another 5-6 to your list. But most of it all comes back to one thing...........a well deserved lack of CREDIBILITY. Get ready to say hello to Glenn from Prosper everyone :) Peter……..Actually I didn’t ask that question, because I know why Lending Club attracts more investors, retail or otherwise. But I do wish you’d resist the urge to be an apologist for Prosper. The sooner they are faced with the many below par things they’re doing the better for everyone involved. And as for returns, yes one could argue that they’re doing better than Lending Club but then one would be wrong. The key word that is missing is “interim” results Peter, interim results. In every other historical & complete metric, they’re not doing better & the future is far from certain. But then you know that.

As for reasons……….I could add another 5-6 to your list. But most of it all comes back to one thing………..a well deserved lack of CREDIBILITY.

Get ready to say hello to Glenn from Prosper everyone :)

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By: Peter Renton /state-of-the-industry/prosper-breaks-10-million-and-lending-club-keeps-rolling-on/comment-page-1/#comment-3973 Peter Renton Fri, 03 Feb 2012 19:56:33 +0000 /&p=3964#comment-3973 @Dan, That is a fair question. Why is it that Lending Club seems to attract more retail investors than Prosper? I don't see Lending Club's marketing as being superior to Prosper's although I don't think their aggressive stance against Lending Club has done them any favors with investors. Also, one could argue, by doing research on Lendstats, that Prosper has better returns than Lending Club. So why fewer investors? I think there are a number of possible explanations: 1. Investors in Prosper 1.0 were burned and these people have not returned. The bad publicity surrounding the returns initial investors also impacts retail investors. 2. The interest rate mix is more aggressive at Prosper. According to Nickel Steamroller the average interest rate since the beginning of 2012 at Lending Club is 12.19% and at Prosper is 22.07%. That is a big difference and I think most retail investors are more comfortable investing in lower interest loans. 3. Lending Club is in a much stronger position financially than Prosper. With the volume that Lending Club is now doing, you can see that they will achieve profitability some time soon and I think that is comforting to many investors. Prosper still has a long way to go to get to Lending Club's numbers. 4. On a related note, I think people are more comfortable investing with the industry leader and Lending Club is now definitely that. As to your other note, yes I have more investments in Lending Club than Prosper right now but that is changing. By the end of the year I expect my investments will be roughly equal in both companies. I continue to believe an investment in both companies is the best way to invest in p2p lending. @Dan, That is a fair question. Why is it that Lending Club seems to attract more retail investors than Prosper? I don’t see Lending Club’s marketing as being superior to Prosper’s although I don’t think their aggressive stance against Lending Club has done them any favors with investors. Also, one could argue, by doing research on Lendstats, that Prosper has better returns than Lending Club. So why fewer investors? I think there are a number of possible explanations:

1. Investors in Prosper 1.0 were burned and these people have not returned. The bad publicity surrounding the returns initial investors also impacts retail investors.

2. The interest rate mix is more aggressive at Prosper. According to Nickel Steamroller the average interest rate since the beginning of 2012 at Lending Club is 12.19% and at Prosper is 22.07%. That is a big difference and I think most retail investors are more comfortable investing in lower interest loans.

3. Lending Club is in a much stronger position financially than Prosper. With the volume that Lending Club is now doing, you can see that they will achieve profitability some time soon and I think that is comforting to many investors. Prosper still has a long way to go to get to Lending Club’s numbers.

4. On a related note, I think people are more comfortable investing with the industry leader and Lending Club is now definitely that.

As to your other note, yes I have more investments in Lending Club than Prosper right now but that is changing. By the end of the year I expect my investments will be roughly equal in both companies. I continue to believe an investment in both companies is the best way to invest in p2p lending.

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By: Dan B /state-of-the-industry/prosper-breaks-10-million-and-lending-club-keeps-rolling-on/comment-page-1/#comment-3967 Dan B Fri, 03 Feb 2012 09:05:28 +0000 /&p=3964#comment-3967 Well I think it's pretty clear that there isn't that much non-institutional investing going on at Prosper. One only needs to look at the struggle that the loans that don't get institutional attention go through to get funded to get a good picture. And considering Prosper's $6k+ average loan size, the extent of the struggle is quite telling. Also realize that the institutions aren't really taking the cream of the crop of loans either. Look at worth-blanket's portfolio & it's a virtual proxy for Prosper across the board. So it's not that the retail investors are passing on the scraps. It's that there isn't that much retail investor activity period. Look at it another way.............Up until recently I had an account at Prosper. At it's peak it was less than 5% of my total p2p investments. I know 7 other p2p investors that have accounts at both Lending Club & Prosper. None of them have more money invested in Prosper. And the difference isn't even close. That is saying something considering Prosper has been around longer. Not counting newly opened accounts, does anyone here with more than $10k invested (& who has accounts at both companies) have more money invested in Prosper than Lending Club? I know Peter doesn't. Well I think it’s pretty clear that there isn’t that much non-institutional investing going on at Prosper. One only needs to look at the struggle that the loans that don’t get institutional attention go through to get funded to get a good picture. And considering Prosper’s $6k+ average loan size, the extent of the struggle is quite telling. Also realize that the institutions aren’t really taking the cream of the crop of loans either. Look at worth-blanket’s portfolio & it’s a virtual proxy for Prosper across the board. So it’s not that the retail investors are passing on the scraps. It’s that there isn’t that much retail investor activity period.

Look at it another way………….Up until recently I had an account at Prosper. At it’s peak it was less than 5% of my total p2p investments. I know 7 other p2p investors that have accounts at both Lending Club & Prosper. None of them have more money invested in Prosper. And the difference isn’t even close. That is saying something considering Prosper has been around longer.

Not counting newly opened accounts, does anyone here with more than $10k invested (& who has accounts at both companies) have more money invested in Prosper than Lending Club? I know Peter doesn’t.

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By: Peter Renton /state-of-the-industry/prosper-breaks-10-million-and-lending-club-keeps-rolling-on/comment-page-1/#comment-3964 Peter Renton Fri, 03 Feb 2012 00:52:17 +0000 /&p=3964#comment-3964 @Ryan, Prosper is certainly focused on increasing the number of institutional lenders on their platform while at the same time growing their retail base. But the institutional side is probably already over 50% of their volume so I would like to see more retail investors on the platform too. Lending Club does not provide a breakdown like Prosper does. And even Prosper doesn't provide a break down of institutional/retail investors - we have to work that out for ourselves. I use Lendstats.com to look at who is investing the most in Prosper each month. Lending Club provides no information whatsoever in the data download regarding individual investors. @Ryan, Prosper is certainly focused on increasing the number of institutional lenders on their platform while at the same time growing their retail base. But the institutional side is probably already over 50% of their volume so I would like to see more retail investors on the platform too.

Lending Club does not provide a breakdown like Prosper does. And even Prosper doesn’t provide a break down of institutional/retail investors – we have to work that out for ourselves. I use Lendstats.com to look at who is investing the most in Prosper each month. Lending Club provides no information whatsoever in the data download regarding individual investors.

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By: Ryan /state-of-the-industry/prosper-breaks-10-million-and-lending-club-keeps-rolling-on/comment-page-1/#comment-3960 Ryan Thu, 02 Feb 2012 23:54:55 +0000 /&p=3964#comment-3960 I am a little concerned by the large portion of Prosper's business that is done by just a few lenders. If these lenders slow down their rate of investment, Prosper's numbers (and forecast) may look entirely different. On the other hand, perhaps Prosper's strategy is to get more big lenders lined up. Do we have access to see how much of Lending Club's business comes from the top few lenders? I am a little concerned by the large portion of Prosper’s business that is done by just a few lenders. If these lenders slow down their rate of investment, Prosper’s numbers (and forecast) may look entirely different.

On the other hand, perhaps Prosper’s strategy is to get more big lenders lined up.

Do we have access to see how much of Lending Club’s business comes from the top few lenders?

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By: Peer to Peer Lending (Social Lending) 101: Prosper, Lending Club, and Risk-Reward | Linedriven Ideas /state-of-the-industry/prosper-breaks-10-million-and-lending-club-keeps-rolling-on/comment-page-1/#comment-3951 Peer to Peer Lending (Social Lending) 101: Prosper, Lending Club, and Risk-Reward | Linedriven Ideas Thu, 02 Feb 2012 07:20:42 +0000 /&p=3964#comment-3951 [...] brokering over $10 million of loans, while the latter has eclipsed 30,000 new loans per month, according to /. Could it be for you? In our “prosumer” (producer=consumer) economy, that depends on [...] [...] brokering over $10 million of loans, while the latter has eclipsed 30,000 new loans per month, according to /. Could it be for you? In our “prosumer” (producer=consumer) economy, that depends on [...]

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By: Peter Renton /state-of-the-industry/prosper-breaks-10-million-and-lending-club-keeps-rolling-on/comment-page-1/#comment-3948 Peter Renton Wed, 01 Feb 2012 23:43:15 +0000 /&p=3964#comment-3948 @Dan, It was a huge day today at Lending Club, nearly $5 million in new loans - one of their biggest days ever. I agree, they should break $500 million by early tomorrow morning. @Dan, It was a huge day today at Lending Club, nearly $5 million in new loans – one of their biggest days ever. I agree, they should break $500 million by early tomorrow morning.

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