Matchmaking for Web Start-Ups and Investors

For Naval Ravikant, the problem with investing in start-ups boils down to coffee.

“I got really tired of coffee meetings,” said Mr. Ravikant, 37, a technology entrepreneur turned investor. So burned out, in fact, that he bought the Web address idontdocoffee.com. When start-up companies looking for financing request in-person meetings, they get a reply from the e-mail address [email protected].

“I thought, we’re dealing with Internet start-ups here, there has got to be a better, more efficient way to evaluate them than to do thousands of coffee meetings,” Mr. Ravikant said. “Coffee should be the last step, not the first.”

So in February 2009, Mr. Ravikant and Babak Nivi, a fellow investor and start-up mentor, started AngelList, a networking Web site that substitutes endless pitch meetings with Internet-based matchmaking.

AngelList, akin to online dating sites, allows eager start-up companies to pair up with investors looking to buy into the next Twitter or Facebook. More than 1,300 investors have already joined the site, including about 400 venture capitalists. The rest are angel investors, the name given to those who buy a stake of a company with their own money.

On average, more than 20 start-ups from all over the world join the site every day, and about 200 companies have been financed. Mr. Ravikant and Mr. Nivi vet the investors before they are allowed on the site, which is free to join for both investors and start-ups and has become hotter in Silicon Valley than many popular start-ups.

The site combines deal-making with social network profiles to make it “one of the most innovative things that has happened in venture capital in the last five years,” said Dave McClure, an angel investor and founding partner of 500 Startups, a Silicon Valley technology incubator.