svmn october 2007 meeting - ebay microplace (karl willey)

Introduction

Silicon Valley Microfinance Network

November 2007

Market Research Shows Strong Demand

“Save the World Enthusiasts”

• “Web 2.0” segment• Young, idealistic,

educated• Often with ethnic

heritage• Energized by global

impact• New to investing

“Socially-Conscious Affluents”

• “Whole Foods shoppers”

• Affluent professionals

• Well-read & traveled• Want to match

lifestyles with values

• The “Oprah” segment

• Older, female skew• Heavy online

researchers• Socially active, but

tend to focus more domestically

“Soccer Moms & Dads”

MicroPlace’s market research has revealed three key target segments:

• Extensive quantitative research tested demand for MicroPlace offering at different interest rates and maturities

• Interested users from our top 3 target segments represent 30% of the online population

• They expressed interest in investing more than $22 billion

• Market potential even greater at higher interest rates and shorter maturities

Source: MicroPlace quantitative research study, December 2006

Microfinance Industry Needs Capital

Source: “Tapping Financial Markets for Microfinance” Grameen Bank USA Paper, 2005, Jennifer Meehan

Figures are in Billions

$0

$50

$100

$150

$200

$250

$300

Current Supply of Capital inMicrofinance

Estimated worldwide demand

• Tremendous success to date. . . – Over 100 million borrowers

– Over $7 billion of outstanding capital

– 97% historic repayment rates

• But global demand for microfinance far exceeds the current supply of capital

• Up to $300 billion needed

• Private capital will have to close the gap – donation capital will not be sufficient

Microfinance Institutions (MFIs): “The Last Mile”

There are approximately 10,000 microfinance lending institutions in all corners of the globe. They need capital to build their portfolios and their long-term sustainability

Community Investing GrowthImpressive Growth in Community Impressive Growth in Community

Investing CapitalInvesting Capital• At the same time, demand for

socially responsible investment opportunities is on the rise

• Community investing growth has taken off

• But, despite the commercial viability of microfinance, there are few investment vehicles available for the everyday retail investor

• And none have been available online, with the backing of a mass consumer marketing engine

• Until now . . .

MicroPlace Mission

To alleviate global poverty by enabling everyday people to make investments in the world’s working poor

Retail Investors

• Lots of capital available for investment

• Looking for new community investment options

• Microfinance has high appeal, low awareness

MicrofinanceFunds/MFIs

• Proven poverty alleviation tool

• Need for billions of dollars of loan capital

• Self-sustaining industry with the ability to provide investment returns

MicroPlace: Connects everyday retail investors with microfinance institutions in need of capital

Investments

Repayment$

$ Investments

Repayment$

$

How It Works

MicroPlace is an investment website that raises capital for microfinance institutions and funds through the sale of securities to U.S. retail investors

Individual Investors Security Issuers

$250

$250

$300

$500

$500,000

$1,000,000

MFIs

$500,000

$1,000,000

• Purchase securities

• Direct investment to MFI of choice

• Receive interest and principal from security issuers

• Registered broker

• Mass-markets to investors

• Assists with investor management

• Create & register securities

• Select / vet MFIs

• Use funds to support MFI loans

• Pay interest and principal to investors

• Borrow funds from issuers

• Use funds to make more microloans

• Pay principal and interest to issuers

(Examples for illustration)

Example Investment

MFI Info

SecurityIssuer Key Terms

Borrowers

Investors purchase a Calvert Community Investment Note, and target their investment to a specific microfinance institution – in this case, TPC in Cambodia

Site Overview

Invest1

Learn2

Manage3

Benefits From eBay’s Mass Marketing Strength

Mass Marketing Strength/Expertise Marketing Plans

Public relations• Seasoned PR executives• Strong eBay press/media contact network

Online Advertising Expertise/Partnerships• Opportunities to advertise on eBay and PayPal,

reaching millions of people• eBay is a huge internet advertiser

Viral (“buzz”) Marketing Resources• Thousands of employees eager to engage

Email Marketing Expertise• World-class campaign management technology

Print Marketing Experience• Opportunities for inclusion in eBay print media

PR• Broad consumer PR campaign to drive

awareness of microfinance and MicroPlace

Online Marketing• Keyword advertising• Graphical advertising

Viral• Launch campaign to jumpstart site• Viral marketing functionality built into site

Email • Ongoing campaigns to existing investors

Print• Inclusion in eBay catalogs

Tell a Friend!

• Spread the word about microfinance and MicroPlace by sending an e-card!

• Free, easy, fun!

• Choose from 6 designs

• No registration required

• www.microplace.com/ecards