Dating Web Site Seeks P2P Loans Via Virgin Money USA

New York-based dating Web site GetSteady.com is seeking peer to peer loans for growth of its US business operations.

I interviewed its’ founder and President Michael Zuyus via email this week to learn more about the company’s plans for growth and how they are applying peer-to-peer lending to their business plan.

GetSteady.com is a dating web site which caters to the gay, lesbian, bisexual, and transsexual (GLBT) community. The company is seeking loan proposals via Virgin Money’s “Business Builder” product, which is a promissory-note negotiated between the lender and the borrower, and then enforced and managed by Virgin Money USA. GetSteady.com promises interest rates better than traditional investments including savings accounts, CDs and blue-chip stocks.

Mr. Zuyus prefers not to disclose the amount of capital he hopes that this effort will raise, but is seeking minimum loans of $1,000. He has also declined to comment as to if anyone has elected to fund one of these loans.

The company makes an interesting differentiation between peer-to-peer loans as investments. I asked Mr. Zuyus if investors are guaranteed in any way to receive repayment, and he replied “I would like to stress that we do not have investors. If a bank granted my company a loan, they would not be an investor, it’s simply a business loan. In this case, it is a peer business loan.” I found this an interesting re-branding of peer-to-peer loans after hearing the term “investment” thrown around so frequently in reference to peer lending. (I can’t help but wonder if we’ll see this nomenclature adopted more broadly across the industry as a result of regulation?)

I questioned Zuyus about the decision to use peer-to-peer loans in lieu of traditional banking and he cited the recent decline of credibility in the banking community, later saying “Peer to peer lending has become a trusted and viable alternative [to traditional lending], furthering economic growth until banks begin to lend more freely to small business again."

A company press release from June 8, 2009 quotes Zuyus as saying “Using these funds, we aim to expand our marketing and advertising efforts responsibly, quickly capitalizing on the current online dating boom.”

Getsteady.com was founded in 2009 to provide low-cost connections within the GLBT community. The company focuses on serious-minded friendships and relationships based on trust. Members must be verified including their profile photos (Zuyus cites ongoing troubles with users on dating sites supplying false photos).

Jessica Ward is a freelance writer based in the Seattle area. She writes on peer to peer finance, family and more. She also blogs at www.pennywisefamily.blogspot.com.

ZimpleMoney launches social financial platform

ZimpleMoney launched a couple weeks ago as a platform which democratizes financial activities by giving people tools to select, buy and provide self-directed financial services. CEO Steven Rabago explains what that means and provides valuable insight into ZimpleMoney through the following interview.

What is your background and what inspired ZimpleMoney?

I worked in the commercial banking industry during and after college then started a consulting company advising CEO and business owners on how to raise debt and equity financing. The consulting practice evolved into doing board and C-level strategic planning, financial consulting and management turn around work. There came a point in time where I was tired of fixing other peoples business issues and wanted to start or buy my own business. So in 2001 I funded a start-up location-services company called Telogis and led it until 2007. I sold a portion of my interest in the first quarter of 2008. Telogis provides web-based fleet management software and a geospatial software map engine for software developers. I am on the board and retain a significant interest.

As I was transitioning out of Telogis I established some criteria for my next venture. I wanted a business...

• whose customers where ultimately a consumer;
• that enabled people to do good - not just be more efficient;
• where the team shared my values about having fun and working smart;
• with a sustainable business model;
• with cash flow to self fund the great ideas of its employees and partners and encourage their entrepreneurial spirit;
• delivered a product to market quickly;
• designed as a platform that enabled rapid deployment, re-branded and where others saw niche opportunity
  

What inspired ZimpleMoney?

I had a, “if he can do it, I certainly can” moment. Late in 2007 I read that Richard Branson had just purchased a Waltham MA based company called Circle Lending. If Sir Richard could do it, why I certainly could! With my background in finance and banking, the business model was very attractive to me. It also fit all my business requirements.

What is ZimpleMoney?

ZimpleMoney is a web-based product enabling people and organizations to manage and administer financial agreements. Samples of these agreements include loans, leases, rentals, tithing, trusts and settlements. ZimpleMoney focused on “naturally occurring” social networks like family, friends, churches, schools, organizations, non-profits, charities, trusts and foundations. ZimpleMoney sends bills, receives and distributes payments, post payments to ledgers, sends late notices, sends alert messages throughout the process, provides tax records and storage for file and document management and sharing.



Who is behind ZimpleMoney?

Scott McGarrigle and I are behind ZimpleMoney. We have been funding the business for the past year and will be adding a rounds of Friend & Family, Angel and VC investors in 2009. Scott and I have known each other for the past 8 years through Vistage. He and I began talking about the application in November of 2007, built specifications in early 2008 and started coding in late April.

In many ways, ZimpleMoney seems like a mix of Prosper, Lending Club, Kiva and Virgin Money. What are the similarities and what are the differences?

ZimpleMoney’s main difference is in its design and intention. We designed the software and business model to enhance engagement and communication within social finance communities. A community by our definition is two or more people engaged in a shared financial agreement. We also wanted to build a platform where the consumer could pick and choose services of traditional banks through the ZimpleMoney platform. We wanted the ZimpleMoney platform designed to manage multiple bank services plus your personal social finance activity through a single site.

ZimpleMoney looked at the various places people have formal, informal or tacit financial agreements. The most obvious is a loan – which is where our competitors focused their attention. When we looked around we saw loans, leases, rentals, tithing, trust, settlements and goal based deposits.

ZimpleMoney is offering certain portions of its software for free to registered users. None of competitors are offering free software.

We are similar to VirginMoney in that our direct customers know each other and have already come to an agreement prior to using our services. We are similar to Kiva in that our members can use the ZimpleMoney system to manage a micro-loan program of their own. Kiva seeks donations to fund itself where as ZimpleMoney is a self-sustaining business model.

We are not like Prosper and Lending Club in any way. Prosper and Lending Club established a lending marketplace where people offer their loan to buyers who bid to buy loans.

Where did you get the name for ZimpleMoney?

Do you like corny? We wanted a word to express fast and simple. Fast and Simple = “Fimple,” no that did not work…Zippy and Simple = “Zimple,” that works! Coincidently, it works really well with our product branding strategy as well ZimpleMoney, ZimpleCause, ZimpeTPA, ZimpleRents, ZimpleLease etc.

How does ZimpleMoney make money?

We have several sources of revenue: loan set-up fees, monthly recurring transaction fees, recurring enterprise license fees, advertising and related product sales.

Members have several service level options.

• FREE – you do all the data entry, manage up to three loans on the network (the free product will be available in a few weeks)
• Introductory offering - $39.99 per loan set-up and $7.99/loan/mo (regular price is $99.00 plus 9.99)
• Enterprise/Business user - $100/mo plus $7.99/loan/mo
• Non-profit users have a special pricing plan as well - $50.00 per month plus $7.99/loan/mo
  

ZimpleMoney service include: sending bills, sending payment reminders, receiving and distributing payments, posting account ledgers, sending late notices, status message alerts throughout the process, provides tax records and the ability to upload and share digital files, documents, photos, video’s etc. Members who are parties to the agreements have secure access to their account information anytime.

Your site has been live for a little less than a month. What has the reception been like so far and what have you learned from your users?

I am very pleased with the interest we have received so far. In fact it is a little overwhelming. Keep in mind we have not sent any press releases or announcements to the media. And it was not till last week that we saw any search engine indexing on the site.

Maybe the best way for me to answer your question is to tell you who is showing up. As of yesterday, we have had just under 1,000 people from 33 countries visit the site. Most of the “Contact Us” inquiries have expressed interest in using ZimpleMoney to manage a loan servicing or rental back office operation.

We are engaged in discussions in some unique vertical markets:

• Two micro-lending companies in Southeast Asia
• One non-profit that wants to manage its micro-lending programs in North and South America
• A network of 8100 independent auto dealers
• A company that manages equestrian centers
• A company that wants a back office for an online student lending business
• Web-based Real Estate Data Company that wants to co-market to its customers
• A dental finance company
• A veterinary group
• Private real estate lenders
• A church looking to manage tithing
• Private real estate brokers managing rent to own properties
• Private Charitable Trust looking for a product to manage “program related investments”
• Web-based automobile finance company
• Investment group who wants a place to share information (financial reports) and collaborate with respect to their common investments
  

Our users are telling us they want more of everything: advanced loan and rental options, rental application processing, loan documentation, bad debt collection services, loan secondary market options, deposit services, API’s etc. They want one place to manage all their financial services. It is clear we are on the right track yet still quite away from reaching that ultimate objective.

Lending Club has registered with the SEC to provide loan services. Other p2p lending companies have all closed (at least temporarily) in order to meet regulatory requirements. What is the regulatory situation for ZimpleMoney?

Back when I first looked at p-2-p financial services, I was concerned that all our peers, with the exception of VirginMoney, were violating either banking or securities laws. My objective was not to be a regulated enterprise. When we built the business model we looked to VirginMoney (fka CircleLending) as our guide.

ZimpleMoney intention is to provide software to both regulated and non-regulated users. We are not offering a “bid/ask marketplace” solution to our business and enterprise users unless they are prepared to invest in the cost of becoming a regulated business.

I think of ZimpleMoney more as a financial agreement administration service that offers social network tools to enhance engagement and communication between parties with common financial interests.

What are ZimpleMoney's biggest challenges?

Our biggest challenges are the same as most start-ups: hiring great people, staying focused, executing the plan and raising capital to grow our business.

What future plans does ZimpleMoney have?

ZimpleMoney will be releasing it free software within a few weeks. We have an aggressive technology road map that includes:

• features to support more advanced loan agreements,
• social network functions like in network messaging and live online voice communication,
• advanced modules for property management, leasing, tithing, trust and settlement administration,
• free allowance management product for families
• dedicated deposit system,
• API’s for strategic partners and licensees
  

I am focusing on key strategic relationships with larger commercial users managing existing and new loan portfolios; and raising money for ZimpleMoney.

Is there anything else you would like to add?

One of my personal motivations was to empower non-profits, trusts, and charitable organizations by providing access to a low cost software product enabling them to provide social capital within their communities. There is a huge opportunity for charitable trusts to make “Program Related Investments” (PRI’s) to non-profit organizations. By example, the David and Lucile Packard Foundation are reported to have nearly $160 million dollars invested in PRI’s and have been doing so for many years.

ZimpleMoney system enables charitable foundations to team-up, communicate, engage, “co-lend” and “co-partner” in worthwhile causes. Foundations with smaller amounts of capital can join other foundations to make important investments within their community or where they share common objectives.

Here are some links if people are interested in learning more about PRI’s:

www.primakers.net
www.foundationcenter.org/getstarted/faqs/html/pri.html
www.packard.org/categoryList.aspx?RootCatID=3&CategoryID=216
www.irs.gov/charities/foundations/article/0,,id=137793,00.html

The bottom-line: I think the peer-to-peer social finance movement is a long term trend. The commercial and investment banking industry and the regulatory agencies worldwide have largely failed. High risk and high leverage coupled with the sale of that risk is a living example of the “greater fool theory.”

I still don’t think the banks quite get it, they want to “control” customers; ZimpleMoney is the customer’s partner. ZimpleMoney democratizes financial services by giving people tools to select, buy and provide self-directed financial services. Zimpley said, “ZimpleMoney enables choice.”

VaultStreet streamlines financial document management

Matt and I originally planned on attending FinovateStartup in San Francisco on Tuesday. Unfortunately due to work commitments, we had to cancel our plane tickets and reservations at the last minute. Several of the CEO’s and founders who will present at Finovate have agreed to participate in email interviews and we will post these over the next few days. First up is Carter Kirkwood, CEO of VaultStreet.

At the first glance of his bio, it seems like lawyer Carter Kirkwood is the unlikely founder of a technology company. He was an intellectual property transaction attorney, where he specialized in representing e-commerce and software businesses that developed, licensed, or acquired technology. On the VaultStreet blog he confesses, “I am not a technologist.” He is, however, the target consumer. Like most of us, he has several checking accounts and spends way too much time with snail mail, paper statements, printing and filing. Or at least he used to. His solution to the filing problem is VaultStreet, an online document management system. These are Kirkwood's responses to our questions about VaultStreet:

Can you tell us a little about your background, the company and what inspired you to create VaultStreet?

My inspiration for founding VaultStreet is fairly simple – I HATE FILING. Yet I have to keep various records in case I ever get audited by the IRS, need proof of ownership for an insurance claim, or apply for a loan (like a mortgage). My observation was that my online broker, bank, employer, insurance provider and utilities all had my information stored on their computers, yet I always received everything on paper. Now I had been using Quicken for over 10 years (and used the data download feature) but that did not solve my problem (which was that I wanted to stop wasting weekends filing away paper or searching for it when I needed it).

My background is as an intellectual property lawyer and most of my clients were in the IT space. So I probably have a heightened sensitivity to the interaction between legal concepts (like privacy, ownership, and evidence) and technology. Over time it became clear to me that what was needed was a virtual “record keeping” system that could protect the user’s privacy from end-to-end (i.e. from the bank to the consumer to the tax preparer or financial planner) while at the same time providing chain of custody evidence which would show that the e-document had not been altered since it was originally created by the bank (or other institution). Finding a way to solve this problem turned out to be more difficult than I originally imagined and eventually required solving a series of sub problems in a manner that was backwards as compared to existing solutions (this is what we have filed the patents on).

Since those early days, we have learned a lot from our customers and have discovered that what they initially value most about our system is its ability to automatically collect and organize their financial documents for them in a single location while protecting their privacy. Fortunately, we built that functionality in to the system from the very beginning.




What are the major advantages of storing all financial documents in one location?

Consumers have a hard time remembering all of their different user names and passwords. Plus it takes a lot of time to navigate across 4-6 institutions to collect documents from multiple locations. Then you must save each individual document on your computer with a unique name and organize the document set. It takes up valuable time that could be better spent with family and friends. VaultStreet offer consumers the convenience and time savings of having all documents automatically collected and organized into a single location, which also prepares them to respond quickly to financial events such as loan applications. Collecting documents into VaultStreet’s online repository also offers protection in the event of disaster, such as a fire or flood.

For institutions, VaultStreet offers a real way to reduce the operational and administrative costs of mailing documents to account holders while increasing customer service to these same account holders at banks, brokerages and utility companies. Institutions can use VaultStreet to collect, organize and authenticate the source of financial documents for their customers. It’s a great value-added service with the potential to build customer loyalty.

Who are the primary users of VaultStreet?

Consumers/taxpayers are the initial primary users, but we have had strong interest from accountants, financial planners, tax preparers, and mortgage brokers.

You currently provide secure document storage for five brokerages and about ten banks and utilities companies. Will you continue to increase the number of institutions you cover?

Absolutely. This is a top priority.

Many of our readers hold peer to peer lending accounts. Do you plan on adding the ability to store documents from Prosper, Zopa and Lending Club?

We would be very interested in talking with those companies about how to work together to not only store documents from them but also to facilitate the process of asset and income verification that often occurs when consumers apply for loans.

Security is obviously a major concern. How will you ensure that sensitive documents will remain secure?

We have designed the system from the very beginning to be very secure. We not only work at VaultStreet but we are also users of VaultStreet, so we take the issue of security very seriously. To learn more about our security, we have posted information at http://www.vaultstreet.com/content/how-it-works/security_overview.php. Our CTO is available to address specific questions related to security.

What have been your biggest challenges as you launch a new company?

Early on, when the company was more of an idea and less of a product, it was a challenge to get people to understand what we did (but I think that is probably true for most transformational technologies). Now the biggest challenge is keeping up with all of the business development opportunities. We have been pleasantly surprised at how many banks, brokerages, and insurance companies have contacted us saying that they have been waiting for this kind of service.

Is there anything else you would like to add?

I want to extend a personal invitation to you and others to register with the service. Registration is available on the home page. To learn more, go to www.VaultStreet.com.