By our own experience and by the sheer volume of callers we talk to on our Radio Show, it’s clear that raising money is one of the most intimidating and difficult parts of starting up a business.

That’s why we’ve chosen as today’s Cool Company. is a new kind of source of money for startups – and it’s all about drawing upon your peers as the much-needed cash you need to move from dreaming to starting up. You might categorize this as "Friends & Family" funding, but it’s really not.

It’s more like "Stranger" funding! Prosper’s users lend to and borrow from other people on the site at supposedly better interest rates than those that traditional financial institutions offer. Another claim makes is that this source of funding removes some of the risks that come with person-to-person loans.

How do they make money? By taking a tiny cut: Prosper charges borrowers 1 percent of the loan amount and lenders 0.5 percent of the loan’s balance each year.

This one’s got GRAND SLAM written all over it!

What a cool company!

And what a demonstration of two things we always recommend:

1) When looking for a great business idea, keep your radar up for "screaming needs" in the marketplace- like people who are dying to find a source of funding for their startup

2) Copy successful models of your business idea that exist in other geographic markets, and apply them to your specific geography – in the case of, they’re simply applying (and improving upon) a U.K. company called

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