Colektivo is a new debt-financing startup that appears to be attempting to bridge peer-to-peer loans with crowdsourced investing. A sort of Kiva for entreprenurs, bridging the concepts behind startups like CommunityLend and Vencorps. Startups are asked to fill out a loan application, and a group of lenders then decide if they want to make a loan to that startup.
Colektivo runs the first investment fund on the Internet managed by a group of investors. The investment fund sole purpose is to supply local small and medium enterprises (SMEs) with debt financing. This synergy between SMEs and savers represents a real alternative to banks and traditional investment products. The incomes of interest generated by the loans are redistributed to the savers whereas the principal portion is reinvested in other SMEs. With a minimum investment of 100$, investors are able to buy investment fund units
My first impression is that Colektivo is taking the worst from both worlds and attempts to bring them together to form an idea that seems full of risk and that promises minimal reward.
The peer-to-peer loans industry has been under a lot of pressure and has lived under a cloud of uncertainty in almost every jurisdiction so far. Prosper.com was shut down by the US SEC in November 2008, and in Febuary 2008, IOUCentral launched and was then quickly shut down here in Canada. My sense is that they are trying to avoid regulatory hell by managing it as an investment fund, which may or may not work, I am not qualified to say.
So, take the peer-to-peer model, and then layer on the further uncertainty of the crowd-sourced investment model and I get jittery. I hope they can prove me wrong though.
I am, however, feeling more and more bullish about Vencorps, which uses crowdsourcing to find good investment opportunities, but which uses its own money to make the actual investments. I have been watching some of the pre-launch contests they have been running, and I do see the potential.
Thanks for the visibility..
Let me clarify some aspects you've mentionned in your article.
1) Kiva only lends to entrepreneurs.
2) Colektivo will make loans to SMEs (commercial loans), not to entrepreneurs.
3) Of course we want to help startup companies, but most of our loans will be made to growing and established companies (Anyway the asset alocation will also be decided by the investors collectivity). It will not be a problem to attract these kinds of companies since we will be able to offer them better rates than banks. In other words, it's not like Prosper and other P2P lending marketplaces where borrowers are mostly “bad credit” ones.
4) Please don't compare Colektivo to Vencorps. Colektivo capital is not a venture capital fund… With Colektivo people get real incentives to make good decisions. They can gain reputation, they can earn monetary rewards and yet more important, they have invested in the fund (unlike Vencorps).
5) It's not full of risk. On the contrary, it's less risky than buying stocks or P2P lending promissory notes.. By investing in Colektivo, you are investing in a diversified loans portfolio.. For instance, if Colektivo invest in 100 SMEs at an average interest rate of 12-13% and afterwards 3 to 5 of them go bankrupt, still the investors will realize more than 10% yield. Moreover, loans are less volatil than stocks.
6) It's more than a crowd-sourced investment model, it's a crowdfinancing model (investors invest but they also making all financing decisions).
We will keep you informed.
Regards
It smells like a con to me, and I explain why here:
http://www.danielharan.com/2009/01/04/colektivo…
I commented on that article… http://www.danielharan.com/2009/01/04/colektivo…
I don't see how this looks like a con…
I commented on that article… http://www.danielharan.com/2009/01/04/colektivo…
I don't see how this looks like a con…
Thanks for the visibility..
Let me clarify some aspects you’ve mentionned in your article.
1) Kiva only lends to entrepreneurs.
2) Colektivo will make loans to SMEs (commercial loans), not to entrepreneurs.
3) Of course we want to help startup companies, but most of our loans will be made to growing and established companies (Anyway the asset alocation will also be decided by the investors collectivity). It will not be a problem to attract these kinds of companies since we will be able to offer them better rates than banks. In other words, it’s not like Prosper and other P2P lending marketplaces where borrowers are mostly “bad credit” ones.
4) Please don’t compare Colektivo to Vencorps. Colektivo capital is not a venture capital fund… With Colektivo people get real incentives to make good decisions. They can gain reputation, they can earn monetary rewards and yet more important, they have invested in the fund (unlike Vencorps).
5) It’s not full of risk. On the contrary, it’s less risky than buying stocks or P2P lending promissory notes.. By investing in Colektivo, you are investing in a diversified loans portfolio.. For instance, if Colektivo invest in 100 SMEs at an average interest rate of 12-13% and afterwards 3 to 5 of them go bankrupt, still the investors will realize more than 10% yield. Moreover, loans are less volatil than stocks.
6) It’s more than a crowd-sourced investment model, it’s a crowdfinancing model (investors invest but they also making all financing decisions).
We will keep you informed.
Regards
It smells like a con to me, and I explain why here:
http://www.danielharan.com/2009/01/04/colektivo-another-montreal-con/
I commented on that article… http://www.danielharan.com/2009/01/04/colektivo-another-montreal-con/#comment-780
I don’t see how this looks like a con…
I don't understand can you explain
Interesting business concept but would not work in Asia
Interesting business concept but would not work in Asia
My first impression is that Colektivo is taking the worst from both worlds and attempts to bring them together to form an idea that seems full of risk and that promises minimal reward. ——- this is my first impression too.