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Zopa's goal is very simple:
put individual private lenders in contact with credit-worthy
borrowers without all of the difficulties associated
with creditors. Because there's no middle man - the
borrower simply pays a 1% exchange fee to Zopa up
front - both parties benefit.
Think of Zopa as a bond market for consumers or as
eBay for money or for the financially sophisticated
- a new asset class for your portfolio. Zopa was created
by a team led by Richard Duvall, founder Egg, and
it is backed by Benchmark Capital, the capital behind
eBay.
Borrowers are lent to at a rate that is linked directly
to the borrower's personal credit rating. The borrower
gets the market rate that individual lenders are offering.
The private lender will be able to choose the rate
of return depending on which borrowers they want to
lend to - the higher the risk, the higher the return.
The exchange matches lenders with the borrowers who
agree to pay the specified rate of return.
In practice, no one will lend to just one person -
the lending will be spread across 50 people to provide
a more predictable return and to spread the risk.
There are no strings - no annual charges or set-up
fees and no lock-ins or early redemption penalties
for borrowers. Lenders are able to work through Zopa
free of charge during and an introductory period.
In short, at Zopa, Lenders will
Set their own return
by lending at Zopa and beat savings rates
Get direct access to
a new asset class for their portfolio
Lend to real people
Cut out the middleman
Meanwhile, Borrowers will
Get a rate that's right
for you, based on your personal credit rating
Borrow from real people
via Zopa, where you will not get lost among the crowd
Cut out the middleman
Zopa is currently looking to recruit Lenders before
the nearing launch-date.
Zopa has developed a Founder Member Scheme, which will
reward the first 200 lenders who pledge a minimum of
£10,000 before launch. The scheme will offer one
option in the company per £1,000 pledge. These
options will be subsequently lent and subject to a minimum
of £10,000.
To qualify, Founder Members must be able to produce
an accountant's or employer's letter stating that they
are "sophisticated investors", and sign an
option agreement that contains certain conditions that
commonly apply to company option schemes. Zopa lenders
must also be UK residents.
Zopa is also offering free trading-for-life to members
who pledge £1,000 or more pre-launch, whether
or not they qualify for the Founder Member scheme.
If you are interested, please visit http://www.zopa.com
for more information and contact:
Wendy: Wendy@zopa.com or call:
+44 (0) 7802 249 602
and
Giles: Giles@zopa.comor
call: +44 (0) 7860 674545
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Ariadne
Capital Journal - Through the Maze Volume
5, Edition 1
