“When you know the beginning and the end, it’s very comforting,” says Lending Club founder Renaud Laplanche in the new Startup Story video. It’s the middle where the tension builds and where no entrepreneur wants to be stuck.
In the beginning, back in 2006, Lending Club – the marketplace where borrowers and investors connect – was nothing more than an idea in the head of a French lawyer-turned-tech-entrepreneur. Today, it’s the among the leaders in the marketplace lending space.
I met Renaud in the middle of the story, in 2008. I had read an article about how Lending Club was disrupting traditional consumer lending, got wide-eyed, and immediately reached out to one of the board members. A few days later, Renaud and I were sitting down for breakfast at Scott’s Seafood in Palo Alto.
He was in the process of building a financial services business during the global financial crisis. “Half of the banks in the country were either buying each other or being 48 hours away from bankruptcy,” he says, looking back. “The world was falling apart around us.” Still, it turned out that the legislation that most affected his company was passed not during the Great Recession but during the Great Depression.
Most people would balk at the idea of bringing the Securities Act of 1933 into the internet age. Not Renaud. He might have been caught between the rock of economic recession and the hard place of government regulation, but he certainly wasn’t stuck in the middle. Over the course of many months and many meetings, he worked with the SEC to create a regulatory framework that would allow Lending Club to operate and, ultimately, grow.
As we now know, the team’s efforts – from all the late nights worked to all the Chinese takeout consumed – have been enormously successful. Yes, Lending Club is the industry’s largest player, but its really only just getting started.
As we discussed in our marketplace lending white paper, “A Trillion Dollar Market By the People, For the People,” Lending Club operates in an industry that generates $3.2 trillion in lending activity, which in turn generates $870 billion in fees and interest each year. Far from being the realization of Renaud’s end goal, today’s successes are sure to become the middle of a story of even greater success in the years and decades to come.