The marketplace lending industry is far from dead. Rather, it’s going through a reboot, which will include improved software, increased focus on regulation, and improved transparency.

This was the upshot from a venture capital panel at a recent Bank Innovation event in San Jose.

But what got the online lenders in trouble in the first place?

The industry shakeup in the beginning of last year, credited mostly to Lending Club, among other players, has certainly taken a chunk out of the investment flow from the industry. PWC’s fintech research arm, DeNovo, suggests that the negative investor sentiment, which is still felt now, may not last. According to a recent report:

Questionable investor confidence, at least in the U.S., clearly exists for these business models. But in assessing whether this might be a temporary phenomenon or a true sign of maturity, we find other indicative aspects of the market interesting.

So, as the industry is going through a reboot, what lessons can startups learn, looking back?

“Hiring a good compliance counsel to help navigate is extremely important,” according to Ryan Gilbert, general partner at Propel Venture Partners. “Second is to really appreciate the value of consistent and reliable capital. Even if you position yourself as a person to person player, knowing where the dollars are going to come from for you to fund the loans you’re going to originate is really the most important element you need to consider.”

The successful players in the industry today, according to Gilbert, all have a steady flow of capital to rely on, for when things go South.

Check out what the rest of the VCs had to say in the video below: