their financial accounts in one place, budgeting and tracking spending by category, identifying questionable charges, and monitoring their free credit score, which is updated monthly. Prosper opened to the public on February 5, 2006 and was founded by Chris Larsen (the founder of E-loan) and John Witchel. Prosper is backed by BlackRock, Sequoia Capital, Accel Partners, Agilus Ventures, Benchmark Capital, CrossLink Capital, DAG Ventures, Draper Fisher Jurvetson, Fidelity Ventures, Omidyar Network (an investment vehicle of eBay founder Pierre Omidyar), Meritech Capital Partners, TomorrowVentures (an investment vehicle of Google Executive Chairman Eric Schmidt), and QED Investors (an investment vehicle of Capital One co-founder Nigel Morris). Evaluation of credit risk Prosper has provided an increasing amount of information about prospective borrowers over time, while also making various changes to its credit policy. Prior to its 2008 'quiet period' and 2009 SEC registration, the company provided "Credit Grades" and other credit information about its prospective lenders. Following the SEC registration, the company created a new model that determined "Prosper Ratings" instead. Additionally, new prospective borrowers were required to have an FICO 8 credit score of at least 640, while returning borrowers only need a score of 600 to request a loan. Prosper Ratings Since its SEC registration in 2009, Prosper has provided a proprietary "Prosper Rating" for prospective borrowers based on the company's estimation of that borrower's "estimated loss rate." According to the company, that figure is "determined by two scores: (1) the credit score, obtained from an official credit reporting agency, and (2) the Prosper Score, figured in-house based on the Prosper population." Prosper Ratings, from lowest-risk to highest-risk, are labeled AA, A, B, C, D, E, and HR ("High Risk"). Business model Prosper has a transaction-based business model, in which the company collects revenue by taking a fee on its customers' transactions. Borrowers who receive a loan, pay an origination fee of 1.00% to 5.00%, depending on the borrower's Prosper Rating, and investors pay a 1% annual servicing fee. Secondary market / Trading platform - Development and Termination As borrowers repay over the three, or five-year fixed term of their Prosper loan, payments are distributed to investors' accounts. This money may then be re-invested into new Prosper loans or withdrawn from Prosper by transfer into the bank accounts of the Prosper investors. Prosper had developed a secondary market for note trading, in cooperation with Folio Investing. Through the secondary market platform,