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Nextdoor competes with other social networks. It differentiates itself from Facebook, for example, by limiting the potential people in each network, so presumably improving privacy. It has been characterized by The Washington Post as part of a "wave" of community focus in the United States. They also hope to capitalize on what they perceive to be a widespread longing for local community at a time when online social networks are widely used. The site was in beta testing in 176 neighborhoods until October 2011.
Nextdoor is currently venture capital funded. Nextdoor also hopes to facilitate exchange of goods and services in a manner similar to Craigslist. They believe, however, that users will be more comfortable trusting other verified users than they would trusting sellers on Craigslist. Recommendations of area resources are also provided. Chenda Ngak of CBS News has compared the site to a "College Bulletin Board".
Before registering an account, prospective users verify their home address. Verification methods include providing a credit card or confirming a code mailed or phoned to the prospective user. Nextdoor provides registered users with a list of neighbors who have also registered (users are required to provide their real name). Nextdoor allows users to see which nearby residents are registered on the site, and to send postcards advertising the site to non-registered neighbors. Nick Wingfield of The New York Times worried that the site may "be used to publicly shame" neighbors or lead to "snarky messages" between residents. Nextdoor leadership has maintained that the presence of real names helps maintain civil behavior among users.
Nextdoor was co-founded by Nirav Tolia, who based the company in San Francisco, California. Tolia had previously helped start Epinions. Early investors include Benchmark Capital, Shasta Ventures, and Rich Barton. As of October 2011, Nextdoor had 22 employees. In July 2012, NextDoor raised $18.6M in venture capital funding. Dan Clancy (ex Google) joined Nextdoor in February 2014.
On May 14, 2014, Nirav Tolia, CEO of Nextdoor, was charged with felony hit-and-run for fleeing a crash on Highway 101 in Brisbane, California that left a woman injured. "It's ironic that the CEO of a company that is holding itself out as trying to promote neighborliness, crime watch and things like that flees the scene of an accident that he caused and doesn't bother to call 911 or stay around to exchange information or see if he caused any injuries," said the woman's attorney, Joseph Brent. The charge was reduced to a misdemeanor and Tolia pleaded no contest and was sentenced immediately to 30 days in county jail and a $239 fine.