AngelList, the online network that connects founders with investors, has been a hit with entrepreneurs. At the Founder Showcase in Mountain View, CA, AngelList’s Ash Fontana, who runs fundraising products for the company, shared a few details about tweaks its making to improve its service.
First, Fontana hinted that the service’s Invest feature might be expanding. The feature lets startups receive as little as $1,000 investments using the service. AngelList does this by partnering with SecondMarket, which bundles funds into an LLC and invests the cash. Fontana says that feature is available to a few companies, “But there’s no reason it shouldn’t be open to a lot more companies,” he says.
The feature has been very potent in some cases. Distil networks, a Web security company, closed a round in January, raising $1.8 million from the likes of TechStars and ff Venture Capital. But then it raised $200,000 of additional funding in under a week using AngelList’s Invest feature.
Fontana also said the company has this week been working on improving its trending features. One of the criticisms of the platform has been the possibility of startups gaming the system. Typically, what can happen is a company will try to manufacture traction in a short period of time. That means they will get all their friends to like and follow them, creating a blitzkrieg effect, which in turn can increase the chance of getting featured on the site.
Fontana’s response: “That’s actually not that different from how it happens in real life,” adding that startups try drum up that kind of enthusiasm all the time.
Still, he says that filters look at quantity as well as quality. He concedes that AngelList can work on improving how to read the signals for activity regarding a company, such as taking into account things other than, say, follows in gaging interest in a startup.
However, Fontana says getting the attention of someone influential, even using the blitzkrieg approach, is still a good sign. “If you get someone important, then you deserve to bubble to the top,” he says.
[Illustration by Hallie Bateman for PandoDaily]