Chris Larsen

June 4, 2018120
Chris Larsen

Chris Larsen is a business executor and angel investor, best known for the joint creation of several start-ups in Silicon Valley, including through peer-to-peer lending. In 1996, he co-founded the online mortgage lender E-Loan, and during his tenure as CEO, E-Loan became the first company to freely grant credit points to FICO for consumers. By 2000, the market value of E-Loan was estimated at $ 1 billion, and Larsen left the company when it was sold to Banco Popular in 2005.

In 2006, he became one of the founders of the Prosper Marketplace, the world’s first market for peer-to-peer lending, and he held the post of general director until 2012. Later in 2012, he co-founded the company Ripple Labs, Inc., which developed the software Ripple, which allows instant and direct transfer of money between two parties. Since 2015, Larsen continues to act as CEO.

Larsen was a supporter of financial confidentiality in California, and in 2001 he became one of the founders of the Californian coalition for privacy. He acted as a speaker at industry events such as Sibos, the flagship SWIFT conference and written articles for publications such as American Banker. He is also a board member or adviser for organizations such as Credit Karma, Electronic Privacy Center (EPIC), Qifang and Betable.

January 4, 2018, Forbes estimated the cost of capital Larsen at 59 billion dollars, putting it ahead of Mark Zuckerberg and taking fifth place in the list of the world’s richest people.

Early life and education

Chris Larsen was born in San Francisco, California, in the 1960s. His mother worked as a freelance illustrator, and his father worked as a United Airlines aircraft mechanic at the San Francisco International Airport. After high school, Larsen began attending the University of San Francisco, where in 1984 he received a bachelor’s degree in international business and accounting. He started working at Chevron after college, conducting a financial audit in Brazil, Ecuador, and Indonesia. He graduated from the MBA from Stanford Graduate School of Business in 1991.

Business career

In the early 1990s, Larsen began working for a mortgage lender in Palo Alto, California. Becoming friends with my colleague Janina Pavlovski, they quit their jobs in 1992 to start a mortgage business. By 1996, they switched their attention from loans to the development of a mortgage lending site. Both Larsen and Pavlovski were disappointed with the aspects of the mortgage lending industry and saw the Internet as a way to bypass agency fees and other charges. Initially attracting $ 450,000 in funding from friends and family, Larsen and Pavlovski moved from their small office in Palo Alto to larger with low rent in nearby Dublin to work on the project.

The E-Loan website became publicly available in 1997 and was successful as one of the first online mortgage lenders in the United States. The website allows borrowers to directly seek and buy loans, without fees charged by brokers and sales agents. The website will later offer direct home equity and auto loans. By 1998, E-Loan had difficulty financing its operations. Pavlovski served as the chief executive officer for the first two years, and in 1998 she offered to exchange posts with Larsen, taking the previous role of President Larsen.

E-Loan financing and public offering (1998-2000)

Pawlowski and Larsen discussed with Intuit over $ 130 million in redemption in the fall of 1998. Forbes wrote that “Pawlowski and Larsen, who together took 40% of the shares and placed 20% more in terms of employee shares, each will go with $ 10 million in cash and $ 16 million in Intuit shares.” A few days before the deal closed in August, however, Yahoo CEO Timothy Coagle made a deal to buy a 23% stake in E-Loan’s issued shares for $ 25 million. Larsen’s and Pawlowski’s payments will be smaller, but they will retain control over the company, and the E-Loan brand will survive. Choice of work with Yahoo, E-Loan also attracted venture capital from Softbank and Sequoia Capital. In 1998, E-Loan had an annual income of $ 6.8 million. The USA and next year Larsen offered the role of CEO to Pawlowski, although she decided to remain president.

At the end of March 1999 E-Loan, according to the public. The company reworked $ 470 million of mortgage loans in the first quarter of 1999, and the second fiscal quarter, revenue for the year reached $ 4.6 million. E-Loan lost $ 13 million in the third quarter of 1999, although revenues, in general, grew 200% from last year. As of October 1999, the company employed about 350 people. This year, the overall E-Loan processed 5000 loans, which by 25% of the online mortgage market were the highest percentages of any online company. By February 2000, the market value of E-Loan was estimated at about $ 1 billion, and Larsen served as CEO and chairman. During his tenure, E-Loan became the first company to freely grant credit points to FICO for consumers.

Activating privacy and selling E-Loan (2001-2005)

Larsen called himself “radically pro-consumer”, and in the early 2000s, he became a supporter of financial confidentiality in California. In 2001, a draft prepared by the Jackie Speyer Assembly proposed that consumers should choose before financial services companies can share or sell personal information, such as bank balances, phone numbers, and social security numbers. Although the bill had public support, he was initially defeated by pro-business lawmakers. In response, Larsen co-founded the Californian coalition for “Confidentiality Now”, helping to finance the project with 1 million dollars. The USA for own money. Larsen led the collection of 600,000 signatures in support of the bill Speyer, which is almost twice the amount required for the issuance of the ballot for the voting of voters. The signatures, combined with the lobbying campaign of Consumer Watchdog during 2002, led to the fact that large financial firms and lawmakers withdrew their opposition, and the bill was adopted in August 2003. Speyer recognized Larsen’s influence on the ruling “without Chris Larsen, the California privacy law, which sets standards for the rest of the nation, will never become a reality.”

As of May 2004, E-Loan sold more than 18.9 billion dollars. US consumer loans since its inception, and the company has remained profitable for eight consecutive quarters. Larsen resigned as CEO in early 2005 to start the Prosper Marketplace and remained chairman until, in 2005, E-Loan was sold to Banco Popular.

Prosper Marketplace (2005-2011)

In 2005, Larsen and John Witchell founded the Prosper Marketplace, in San Francisco, which was the first market for lending to peer-to-peer trading in the United States. Larsen served as CEO. The website opened to the public on February 5, 2006. From 2006 to 2009, Prosper managed a variable-rate model, acting as an online eBay auction market with lenders and borrowers, ultimately determining loan rates using the Dutch auction-as a system. Through the website, borrowers can request personal loans, while Prosper processes credit services and distributes borrower payments and interest back to credit investors. Prosper also publishes “credit ratings” of borrowers and checks identification data and chooses personal data. Larsen himself financed 450 loans through the website since 2008, and borrowers are as varied as homeowners, college students, credit card users and entrepreneurs. By 2008, Prosper facilitated the financing of loans in excess of $ 120 million. The average loan amount was $ 7,000. In 2008 Fast Company named Prosper its Fast 50 List of “the most innovative companies of the year”.

Soon the company faced a regulatory opposition to the US Securities and Exchange Commission (SEC), as the current provisions on lending operations were focused on traditional banks, rather than on technology. In 2008, Prosper filed its first prospectus with the SEC, changing its business model to use pre-established rates based on a formula that estimates the credit risk of each potential borrower. In 2011, Larsen outwardly supported the Move Occupy Wall Street, collecting money to help feed the protesters at the nearby OWS camp in San Francisco. By the end of the year, Prosper managed to allocate $ 271 million in peer-to-peer loans, and the company received a total of 74.5 million dollars. The USA from investments such as Jim Breyer, Tim Draper, Omidyar Network, Nigel Morris and the Court, on March 15, 2012, Larsen announced that he would step down as CEO, although he remained chairman of the company.

The basis of OpenCoin (2012-2013)

In September 2012, Larsen co-founded the company OpenCoin, which began developing a new payment protocol Ripple based on the concept developed by Ryan Fugger. The Ripple protocol provides instant and direct money transfer between the two parties. Thus, the protocol can bypass the fee and wait time for the traditional correspondent banking system, and any type of currency can be exchanged, including gold, airline miles, and rupees.

To maintain security, OpenCoin programmed Ripple to rely on a shared book that “is managed by a network of independent verification servers that constantly compare their transaction records.” Servers can belong to anyone, including banks or market makers. The company also created its own form of a digital currency called XRP, similar to Bitcoin, using currency to allow financial investments to transfer money with a small commission and waiting time. On May 14, 2013, OpenCoin announced that it had closed the second round of angel financing, and among their first investors were Andreessen Horowitz, Google Ventures, and IDG Capital Partners.

Ripple Labs (2013-2017)

In September 2013, OpenCoin changed its name to Ripple Labs, Inc., with the CEO of Larsen. Ripple Labs has announced that the source code for a peer-to-peer network behind the Ripple payment network is open source. Ripple Labs continued to act as key participants in the code for the Ripple consensus verification system, which, she said, could be integrated with the banks’ IT systems. In 2014, Ripple was the second largest in terms of market capitalization, after Bitcoin. Also this month, Ripple Labs was named one of the 50 smartest companies in MIT Technology Review. Ripple Labs then ranked 4th in the Fast Company list of the world’s top 10 most innovative companies in 2015 in money.

Presence and membership in the media

Larsen acted as a speaker or expert on a number of industry events, for example, speaking at the IIF Annual Meeting in 2014. Larsen also wrote articles on banking systems and other technical topics for publications such as the American Banker.

In the early 2000s, Larsen founded the Chris Larsen Fellowship at the University of San Francisco, and the school named it the “Alum of the Year” in 2004. In 2014, he is a member of the Young Presidents’ Organization (YPO), and he serves as a board member or advisor for organizations such as Credit Karma and the Electronic Privacy Information Center (EPIC). He acted as an adviser to the political committee of the Silicon Valley Foundation Foundation against pay. He is also aboard the Oportun.


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