Matthew: Hi. This is Matthew Wise, founder of FounderLY.com. We empower entrepreneurs to have a voice and share their story with the world, enabling others to learn more about building products and starting companies. Today I have the pleasure to be with Naval Ravikant, co-founder of AngelList. Naval is an entrepreneur and an angel investor. He’s also the co-author of Venture Hacks. Previously, he was a co-founder of [Jenelle] Corp., which was acquired by [Finisair], who was the co-founder of Epinions, which went public, Vast.com and other companies. He’s also advised and invested in many notable startups including Twitter, FourSquare, DotFirst and more. So with that said, Naval, you can give us your brief bio to let our audience know who you are. Naval: Yeah, that was kind of it. I mean, I’m basically an entrepreneur to an angel investor turned back into being an entrepreneur now with AngelList. Matthew: Excellent. And so what is AngelList and who’s it for? Naval: Yeah, AngelList, right now, it’s sort of Match.com for startup and investors. We help startups get efficiently and quickly funded by good investors. To date, we’ve probably gotten over 200 startups funded. On a good day, we’ll get one or two startups funded working at a pretty quick clip and it’s for all entrepreneurs who are raising money for their startup. We do seed stage rounds. We’re now doing some series A. We did a series B. We’re doing a series C. So it’s getting kind of more and more broad in terms of what we do. It’s an open community service. We just make deductions, essentially, for high quality startups and more and more of the work is now done through crowdsourcing through community. Matthew: Excellent. And so given your kind of domain expertise as a serial entrepreneur, as an early stage angel investor, what are some of the trends you’re seeing? We know a lot of things are shifting towards founders. Lots of founders are becoming investors but what are some of the trends you’re seeing with regards to founders raising capital? Naval: There’s a lot of trends, a lot of change. The amount of money being raised these days is a lot less per company, so that in turn gives the entrepreneurs a lot more power because that means there’s more sources of capital available to them, from friends and family to angels to seed funds to series A to B, Cs. Everyone’s competing to put money inside startups that have some traction. It is still a difficult time though in a sense that most startups have no traction. They’re still ideas or early products and some have a lot of traction and the ones that have a lot of traction, everyone wants to pile into at high prices and best terms and the one that are no traction sometimes it can be very hard to raise money for. Trends were seeing are the terms are getting more founder friendly. They’re becoming more standardized. Financings are happening more quickly when they do happen. Another trend that’s related to that is it’s very hard to recruit, especially developers, because everyone is starting their own company. There’s a lot of leverage available through Facebook, iPhone, other platforms but we’re sort of at a Renaissance for entrepreneurship and creativity. Matthew: I see. And so kind of going a little bit further into it, kind of digging into the details, lots of people have different trigger points that motivate them to start something and I imagine that you’ve seen lots of different things as an investor but was there a specific event or aha moment that made you want to start AngelList or was it a series of just observing? Naval: It was a series of things. I had raised my own money before, done my own startups. Then I was co-authoring Venture Hacks, basically laying out the game theory for raising money of venture capital to startups and just a lot of them were saying hey, don’t tell me how to do it. Just do it for me and so AngelList is the product that came out of that. It was taking all those things that we teach in Venture Hacks about how to raise financing, how to negotiate and structure financing and do it quickly and efficiently with good investors and we just turned that into a product. Matthew: I see, I see. And so in terms of just time frames, how long have you guys been in operation? When did you actually launch? Naval: We started 12 months ago as an email list. Matthew: Okay. Naval: And about six to eight months ago, we started building it out as a product. Matthew: Okay. And in terms of, like you say, show some proof and metrics and traction, can you share a little bit about that with AngelList to our audience? Naval: Yeah, we have had thousands of startups apply. We have 1,300 investors on the list, including 500 VCs. All the top tier investors are on there. People like [Mark Andrishan], [Mitch Kapur], Media Score Ventures, First Round Capital, [inaudible 04:48], Sequoia, everyone’s active on it. [inaudible 04:52], etc. Of course, not everyone takes interest in every deal or takes every startup but those people are all there and paying attention. We have gotten hundreds of startups funded and we’re getting more funded every single day. Matthew: And I noticed that a lot of founders, when they launch something, they have their own set of assumptions. They’re testing those but they also get feedback from users and customers and so I imagine you’ve gotten lots of different feedback from your user base. Have you learned anything from them that you didn’t know before? Naval: Many things. Many things that were not obvious to us. It turns out angels don’t really share deals with each other. It’s the entrepreneurs that share with each other. Matthew: Interesting. Naval: Entrepreneurs will do an enormous amount of work to build up their profiles. Angels won’t do a whole lot because they’re used to stuff coming to them. You can’t enable easy direct communication between the two sides. Otherwise there’s a lot of spam and then sort of off topic stuff. Matthew: I see. Naval: Keeping the quality of the community high while still scaling is sort of the main challenge, which is in any high quality community. That’s true in [inaudible 05:55] as well but it’s true in this community also. Matthew: So would it be safe to say that angels as a general rule, they collaborate, co-invest, they syndicate deals but maybe the main driver isn’t pure altruism. It’s more economic drivers. Naval: Yeah, I think some of them are actually more altruistic and some of them see themselves as patrons of technology, as there were patrons of the arts in some of the [inaudible 06:15]. Matthew: Right. Naval: I don’t think they don’t share because they don’t want to. I think they’re happy to. It’s just how much effort do they want to make. For a startup, it’s life or death whether they get funded or not. So the startup just cares more. And generally, entrepreneurs are people who are prone to action, whereas investors are people who are prone, I think. So that is reflective in their behavior patterns and the product as well.