There was some big news out of Prosper earlier today. In a press release this afternoon, Prosper announced that chairman, co-founder and CEO Chris Larsen was stepping down from his role as CEO of the company. In his place it was announced that Dawn Lepore, the former CEO of Drugstore.com and vice chairman of Charles Schwab would serve as interim CEO.
Here is an official statement from Chris Larsen about this move:
“As Prosper continues to achieve incredible growth, now is the time to embrace the next phase of the company’s evolution,” said Larsen. “As Chairman, I look forward to working closely with the executive team to build a truly innovative consumer credit company.”
I actually chatted with Chris Larsen earlier today as he was kind enough to give me a heads up about this big news. He wanted to be very clear that he believed this is in the best interests of Prosper. He said that he was more of a startup guy and now that Prosper had reached almost 70 people it needed someone with a different skill set, someone that could really take it to the next level.
He said he was very happy with where Prosper is at. They have a lot of cash on the balance sheet. a strong growth trajectory and everything is in place for them to continue this rapid growth. They were in a good position to hire an experienced CEO that could drive Prosper forward to ten times and a hundred times the volume they are doing now. He feels that Lepore is the right person to do that. She won’t be doing it alone because Larsen is remaining chairman of Prosper.
The Only CEO Prosper Has Known
The p2p lending landscape will certainly be different without Chris Larsen actively involved as head of Prosper. He effectively started p2p lending in this country and he is the only CEO the company has ever had. While he made some missteps in the first couple of years, he has seen the company through some turbulent times. He has guided Prosper through the financial crisis, higher than expected default rates as well as SEC registration where many people were writing Prosper’s obituary notice. It will be very interesting to see how Prosper evolves without him.
Whether or not this is a good move by Prosper remains to be seen. Lepore certainly looks good on paper and no doubt she will bring some fresh ideas to her position. I will try and reach out to her for an interview after she has settled in to her new role.
What do you think? Is this a good move by Prosper or should Larsen have stayed on longer, maybe until they reached profitability. As always, I am interested to hear your comments.
@Peter, I don’t know anything about Chris Larsen, but when you write, “He said that he was more of a startup guy” I start to think that he is actually just bored. It’s been six years, and most of the big challenges are behind him. He’s looking on to the next challenge. If I am right, then I think it is a great idea for him to leave. It’s the same for anybody else. When their mind moves on, they need to physically move on as well. That he recognizes that in himself, I think is a great quality. Or if he truly believes he doesn’t possess the requisite skill set to continue to lead Prosper, then I also think it is a wise decision. Of course, there is always concern with a change in leadership. Ideas for what the company should be or look like change. The culture changes. And the company’s direction changes. I wish him well, and I hope Prosper continues to…prosper!
@Roy, That is the sense I got. The way he talked it seemed that this is something he has wanted to do for a while. I don’t know whether it was boredom or that he really believed the company would be served better. There are certainly more questions than answers at this point.
@Peter, It may not be boredom, per se. I just see the start-up phase as a more exciting aspect of business than growing or maintaining an existing business. There are unique challenges, and you’re seeing a vision come to life. It’s just a much more exciting, exhilarating and challenging time in the life of a business. There’s more of a “thrill,” and that phrase you quoted from him makes me believe he is looking for that again. I could be wrong. It simply could be that he has another business idea that he wants to work on. In any case, from what you posted, it seems like it is a good idea for him to move on. I’m hoping that it is a good idea for Prosper as well…
@Roy, Well that is the big question. I think we will all be watching Prosper closely in coming months to see if they remain on track.
Peter, When I heard this news it scared me a little. I have always respected Chris and his brilliance as Prosper’s CEO. I have been visiting your website for several months and admire your knowledge concerning P2P. Do you think Chris’s stepping down, makes Prosper a riskier investment vehicle?
Often when a private company begins the process of going public (IPO), the board puts in place a more “investor friendly” management team – a CEO and CFO that is willing to go through the slog of marketing the company to investors and then deal with all of the burdens of being a public company. I wonder if Chris’ resignation is a sign the company is nearing a public offering?
@Kent, I think there is more uncertainty right now around Prosper. Whether or not that translates to more risk is anyone’s guess. All we can do is watch Prosper closely and see if there are any major changes.
@Mike, Given where they are right now, I would be very surprised if an IPO was imminent. That maybe a likelihood down the track but I don’t think they can use their cash for the long and expensive process of an IPO. I think it is on the cards some day but not until after they are making money.
Prosper has a lot of catching up to do with respect to lending club volume. That was my initial thought on prosper’s direction after the CEO change. Beautiful looking offices and friendly staff that I spoke with.
It seems he was focusing on getting the right people together to launch ripple….
Ripple blew his mind, he saw what ripple can do to this world that others won’t see for years…