Andrew Cove moved to New York from Santa Monica on May 1 planning to join NYU’s ITP program. Oops. Somehow the entrepreneur, fresh off his first failed startup, wound up at an internship at IA Ventures which “opened some interesting doors”–and one of those doors eventually led to the startup-investment matchmaker AngelList. A happy coincidence, it seems, as Mr. Cove was somewhat down on his luck before he moved to the city.
“There was baggage–I had just killed a startup,” he said. “I just kind of wanted the experience of living in New York City. It never occurred to me to consider I’d be working for something based in San Francisco.”
New York is the second-most active market on AngelList. Based on the deals companies reported to AngelList, which is far from comprehensive, Silicon Valley is responsible for 53 percent of investments, followed by New York with 18 percent, AngelList founder Naval Ravikant told The Huffington Post.
Los Angeles accounts for six percent of deals; then Austin with five percent, Europe and Boston with four percent and Seattle with three percent.
AngelList, which has no revenue and is supported by a grant from the Kaufman Foundation, has been growing by leaps and bounds since launching in 2010. AngelList now has 2,500 registered investors and 13,000 startups, Mr. Ravikant told HuffPo. To recap: startups list their vitals and how much they’re looking for on AngelList, with options for who can see the information. Investors can then “follow” startups and get a feed of updates from interesting, mostly pre-funding companies. AngelList says it has recorded more than 750 individual investments in an estimated 400 companies, a low number because many deals aren’t reported.
Mr. Cove is the newest “venture hacker” on AngelList’s nine-person team. He works out of Dogpatch Labs in Union Square, helping companies polish their pitches and guiding investors through the site. “It wasn’t actually a concerted thing to have people in New York,” he said. “It turns out to be advantageous because so much is happening in New York.”
Betabeat welcomed Mr. Cove to New York with a hearty call-out in the rumor roundup. He followed up with us this week–and he says AngelList is changing in a very interesting way.
How did you get introduced to AngelList?
I was primarily familiar with AngelList through when it first appeared on Hacker News, and when the explosion of coverage came out of that. The startup I was working on probably wouldn’t have been able to succeed on AngelList largely because it had no traction at the time. But AngelList was exactly the sort of thing that would have been a great tool for me because I was undernetworked. I came out to San Francisco from L.A. wanting to do a web startup, having no connections.
What was your startup?
I was doing–there’s actually a Y Combinator company doing this now– it was QR codes for social networking for businesses, where businesses and ultimately individuals could connect Facebook and LinkedIn and get a QR code for it.
Who are AngelList’s competitors?
There are a few. I would say that we’re aware of them but we’re so heads down focused on our own product that it’s not–not that we don’t think about it, but they don’t influence how we develop our product.
So AngelList is focused on product. What were some recent changes to the network?
We revised a bunch of messaging stuff recently to make it much cleaner. Probably the biggest thing we added recently was reviews for investors. If there’s a negative review of an investor you don’t actually see the negative review, you just see x number of reviews out of y number of reviews were positive. It’s specified by the user whether it’s positive or negative.
Are you seeing anything interesting in the data?
New York is hugely active both from the investor side and the startup side.
The biggest thing that’s happening now is there’s a growing number of companies that have a presence on AngelList even if they aren’t raising money. They’re starting to treat AngelList as a Facebook for companies. It’s interesting for a lot of reasons … certainly interesting because companies used to ask us every now and then, “I’m done fundraising can you guys close the profile now,” and now it’s starting to sway with startups keeping their pages up to show followers [their progress].
For some people, AngelList seems to carry a stigma–like it’s a second, third or last resort for startups that can’t raise money. Is that changing?
I think the percepton of what the site is for will start changing. Part of the benefit of this is, we have confirmed connections between everyone who’s invested with the startup. We’re collecting the data as it happens. We get really good data on funding events. That’s why the stuff happening off the site, closing that loop and collecting that data is important. The foundations are there to have a really cool collection of prominent events in startup history from an investment standpoint.
And now there are a number of companies who have come to AngelList with funding, with very strong leads and with multiple options. And the benefit of being on AngelLlist is that the previously serial process can now happen in parallel and out in the open. When you’re trying to figure out who you want to close your round with, and you know there are some options available to you, you basically create a storm because all the investors you’re talking with will see everyone else who’s following you and taking an interest in you. That speeds this process up so that everything happens more rapidly.
There’s a bunch of misperceptions about the site. There are four characteristics that you need to be exceptional in one of on the site and social proof is just one of those.
Are we going to start seeing more from AngelList in New York?
Yeah! I’m doing a Skillshare class in November. We’re throwing events. There’s stuff in the works.