A Trillion Dollar Market By the People, For the People

BY Charles Moldow, General Partner


New Ideas on FinTech

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Traditional lending works well. For the banks. For centuries, banking has remained fundamentally unchanged. In the simplest terms, banks match savers with borrowers. They pay interest for deposits and make loans to businesses and consumers. Depositors see their savings grow, borrowers use the capital. Banks profit handsomely on the spread.

Banks, as intermediaries, have always added to the cost of borrowing and lending – that’s the price we pay as a society for their market-making abilities. That spread represents a price that was accepted because the banks played a part in the community, and served community needs.

Today, they do neither. Consolidation has created national mega-banks that are more financial mega-stores than they are pillars of the community. And following the 2008 financial crisis and the regulation that ensued, lending has dropped precipitously. While volumes have declined, profits have held. Why? Because banks make a significant, and ever expanding, profit off the spread.

But today technology and innovation are making possible a new generation of financial services that are more affordable and more available. That’s why we believe what we’re calling marketplace lending will be a trillion dollar market by the people, for the people.

Check back at foundationcapital.com for updates, because we plan to watch, participate in, create a dialogue around, and lead this revolution.



LendIt 2014 (05/06/14)
Charles Moldow Marketplace Lending Presentation

LendIt 2014 (05/06/14)
Venture Capital Panel


Related Links:

Lending Club (07/08/14)
Lending Club Records First Billion-Dollar Quarter

Silicon Valley Business Journal (05/06/14)
VC Charles Moldow On Why Peer-To-Peer Lending Will Hit $1 Trillion By 2025

LendingRobot (05/06/14)
7 Suprising Facts About Peer Lending

For Press inquiries please email fc@nectarpr.com

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