Picture 37Jelli, a San Mateo-based startup trying to make old-school radio more interactive, has raised $2 million from angel investors to expand nationally. Jelli runs one to two-hour radio shows where listeners online can collaboratively create playlists in a Digg-like way in real-time. People can suggest songs, vote or “rocket” them up to the top, or “bomb” them and take them off the air.

“It’s like a video game on a radio station that gives people a special thrill from knowing they can influence what others are listening to,” said Mike Dougherty, the CEO and founder of Jelli.

We wrote about Jelli back in October, saying it was a pretty novel way to approach the music space. Even though the company is working with a decidedly older way of distributing music compared to companies like Pandora or Spotify, that approach gives it a more reliable source of revenue. Unlike online radio stations, traditional broadcasters don’t have to pay song royalties. That gives Jelli the benefit of an existing advertising revenue stream, without the sort of costs that have bled other music startups like Imeem to death.

Jelli has been working with San Francisco Bay Area radio stations like Live 105 to test out its service, but it’s preparing for nationwide syndication in the first quarter of this year with shows for rock and Top 40 songs. The company’s also launching a Facebook Connect integration later this week, so you can get friends to join in and make playlists together.

The company has attracted funding from investors like Josh Kopelman of First Round Capital, Zappos COO and CFO Alfred Lin and TriplePoint Capital. Peter Sperling, a director of one of the largest online advertisers in the country Apollo Group, is also an angel as well.

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