Welcome to Digital Freedom Network!
Primarily, DFN's goal is to provide network users with resources which will enable them to expand their range of networking options and broaden the global informational conversation to be as inclusive as is possible, thusly our focus on new economic and individual financial innovations now emerging and ever evolving.
In particular, we are focused upon new network-enabled economics and network-centered personal finance tools. We believe that these represent the future of the broader global economic and financial marketplaces - behind which, naturally, flow increased personal freedom.
"Crowd Funding" Bill Passes in US House, Now Moves on to US Senate
On November 9th, HR 2930, the "Entrepreneur Access to Capital Act", passed in the US House of Representatives, opening the door to crowdfunding ventures. The bill will come up in the Senate in early 2012.
What is "Crowd Funding"?
In essence, "Crowd Funding" means raising small amounts of money (capital) from large numbers of people (investors), in exchange for a return or other form of interest in that business.
Crowd funding offers a potential boon to existing small businesses who are suffering through an incredibly tight credit market, not to mention startup businesses whose access to capital is equally crippled by archaic regulation and burdensome (incredibly complex and expensive) compliance processes.
Removing these burdens could be a potentially very positive step to spurring economic growth, both domestically, and, as many other developed nations have similar restrictions, globally. This is one area where old laws need to catch up to new technological reality. And fast...
Peer to Peer Lending: New Social Lending, Credit & Loan Websites
Prosper.com is an online social lending marketplace which connects borrowers with both individual and institutional investors. Borrowers apply for loans and Prosper's investors sort through the (anonymized) loan applications and invest from $25 to $25,000 into those loans. Prosper handles all servicing of the loans, borrowers receive lower rates than from traditional lenders, and investors can achieve high yields on an investment opportunity which was previously only open to banks and credit card issuers.
Integration of this type of socio-financial networking infrastructure with social networking functionality seems inevitable - leading to big opportunities.
Prosper's personal loans function exactly like bank personal loans. Loan terms range from 1 to 5 years, with loan amounts to $25,000 per individual borrower. Rates are set, primarily, based upon the credit score of the individual borrower, and investors merely choose which loans to fund and how much they will invest in each loan.
Prosper's investors receive all proceeds from the interest rates charged to borrowers, minus a small servicing fee, and even collect any late fees that borrowers may incur, exactly like a bank or credit card company would profit from such an event. In the event that a loan is late or ceases to repay, Prosper handles all collection efforts on behalf of investors in Prosper's loans, just as a bank would.
Prosper's returns are very attractive. Average ROI is around 10% - per year.
Prosper's financial backers include Google Executive Chairman Eric Schmidt, eBay founder Pierre Omidyar, Capital One co-founder Nigel Morris, and a long list of technology, finance, and venture capital luminaries.
A new side-by-side comparison of US platforms for peer to peer lending is available here.