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Compensation Model
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Compensation model will depend on the debt vs equity answer. Typically, when working with debts a matching platform (e.g. a bank) is compensated by a certain number of points of the interest rate. For equity, General Partners are compensated by a management fee (e.g. 2% per year of the fund) and a portion of the carried interest (e.g. 20% of the profits). If the P2PVenture handles debt with a very long term repayment or not collect investors' money accumulated in a fund, it could not use similar mechanisms. It could possibly work with a fee on transactions or through a subscription fee for investors, enterprises seeking money or possibly both. The last comment brings consideration to two-sided markets. Two-sided markets are markets where you have two types of actors (employers and job seekers, men and women in a night-club,..) and one of the actor is often more interested to trade than the other side: So it usually lead to free access to one of the sides (job-seekers, women in night-clubs,..) and full-cost to other one (employers, men,..). If we go with a subscription price, we will have to determine if investors would pay it and enterprises would have a free access, the reverse (placement agent model) or a split between the two (e.g. 80% by investors and 20% by startups). -- FredericBaud  |
Compensation model will depend on the debt vs equity answer.
Typically, when working with debts a matching platform (e.g. a bank) is compensated by a certain number of points of the interest rate.
For equity, General Partners are compensated by a management fee (e.g. 2% per year of the fund) and a portion of the carried interest (e.g. 20% of the profits).
If the P2PVenture handles debt with a very long term repayment or not collect investors' money accumulated in a fund, it could not use similar mechanisms. It could possibly work with a fee on transactions or through a subscription fee for investors, enterprises seeking money or possibly both. The last comment brings consideration to two-sided markets. Two-sided markets are markets where you have two types of actors (employers and job seekers, men and women in a night-club,..) and one of the actor is often more interested to trade than the other side: So it usually lead to free access to one of the sides (job-seekers, women in night-clubs,..) and full-cost to other one (employers, men,..). If we go with a subscription price, we will have to determine if investors would pay it and enterprises would have a free access, the reverse (placement agent model) or a split between the two (e.g. 80% by investors and 20% by startups). -- FredericBaud
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