America's First People-to-People Lending Marketplace: Prosper

"Prosper gives people the opportunity to take back the marketplace for consumer credit," said Larsen. "By providing the platform and tools for an efficient marketplace created by and for people, Prosper aims to make consumer lending more financially and socially rewarding for everyone."

"We believe groups are at the heart of fostering a culture of responsible borrowers," said Larsen. "While some people might be apathetic about paying their credit card bills, they're likely to be far more conscientious about their payment habits when their group's reputation is on the line. For instance, a member of a university alumni group won't want to shame their alma mater and fellow alums by giving them a mediocre group reputation."

"There are likely to be people who bid on certain loans because they want to support people they care about and can relate to," said Larsen. "For example, a successful entrepreneur may remember the trials and tribulations of getting a loan to start her first business, and be instantly drawn to borrowers who are budding entrepreneurs."

Prosper generates revenue by collecting a one-time 1% fee on funded loans from borrowers, and assessing a 0.5% annual loan servicing fee to lenders. Backed by Accel Partners, Benchmark Capital, Fidelity Ventures, and Omidyar Network, Prosper has raised approximately $20 million. Prosper's marketplace platform is patent pending.