One of the more interesting venture funding shifts we've seen over the last decade is the growing interest by VCs in investing in startups targeting small businesses.
Even as recently as 5 years ago, few VCs would even consider investing in companies targeting small businesses. The reason was was straight forward - VCs felt it was too hard to market to small businesses and too expensive to support them.
This, by the way, was also common wisdom at most large corporations.
But two things have changed the view on the small business sector by both VCs and large corporations:
1. the reach and customer self-service capabilities of the Internet has fundamentally changed the economics of serving the small business sector;
2. a number of venture backed companies targeting small businesses have become hugely successful (Google, Yelp and Groupon are but a few examples).
So we weren't surprised to learn that Manta, the rapidly growing online community and marketing site for small businesses, recently raised $44 million in additional venture funding. This round brings the total VC investment in Manta to $61 million. Impressive numbers.
I had a chance to catch up with Manta CEO Pamela Springer to find out what they are planning to do with their new treasure trove. Springer says they're building more tools and capabilities to help small businesses generate more leads and referrals.
They're also expanding their community features and creating a social, Facebook-like capabilities for small business owners to network with one another and share insights, ideas and referrals.
We think both intiatives are spot on.
Small businesses are always looking for leads and referrals. And research by Manta - which echoes our research (and research of others) - shows that small business owners most often turn to other small business owners for business advice. Providing a social network to allow small business owners to tap into a broader network is bound to be useful.
Small businesses should check out Manta. The service is relatively inexpensive and it's easy to join. They have a free version but most will want to test their paid versions, which start at $29 per month.