Social Marketing Service Gets a VC Boost Social Toaster, an online marketing service, snags $2 million by sticking close to home.

Baltimore-based web developer Brian Razzaque knew he wanted to create a platform that would facilitate social media marketing for companies, but he was vague on the details. His "aha" moment came when an employee asked to be notified each time Razzaque posted something to the company blog; the staffer would read the post, then share it with his social network. That was when Razzaque realized that satisfied customers, employees and vendors with a strong affinity to a brand will happily disseminate content among their social peers--if it is handed to them in a convenient, shareable way. SocialToaster was born.

Unlike traditional social media marketing that relies on fans to discover and make the effort to spread a brand's message, SocialToaster allows companies "to leverage the mass reach of their supporters by pushing their message out so their content has a better chance to go viral," Razzaque says.

Here's how it works: A company's Facebook fans or members of its e-mail database are invited to join the brand's SocialToaster platform. Those who sign on--often enticed by rewards such as tickets or swag--receive an e-mail whenever the brand has something to promote. With one click, these influencers can share the content with their friends across their selected social networks. On the client side, companies can use SocialToaster's dashboard to track the effectiveness of each campaign on a granular level, identifying the messaging that resonates best among their top ambassadors.

Clients ranging from pro basketball's Detroit Pistons to pro football's Indianapolis Colts to mortgage lender Quicken Loans have seen solid returns. SocialToaster claims that 40 to 60 percent of the average customer's social media content is shared. Companies pay $379 and up per month for the service, depending on the number of brand ambassadors sharing their content.

Yet Razzaque knew he needed cash to build a product that could handle the needs of major clients. In 2011, while whittling through $500,000 from a silent seed investor, he went after several dozen potential backers in New York City, Boston and Silicon Valley. Money-wise, his road trips were a bust, but he did collect valuable feedback on his business model (simplify the pricing) and sales pitch (talk about the number of active fans SocialToaster can leverage, not the amount of content shared).

In the end, he didn't need to go far to find help. Last summer he closed a nearly $2 million round of Series A funding led by Blu Venture Investors, located just down I-95 in Vienna, Va.

"SocialToaster had already signed up a number of enterprise customers who all commented on how easy it was to implement the platform and how they loved the ability to leverage their fan base to get their message out," says Blu Venture founding member Paul Silber. "And we believe that SocialToaster can quickly grow to be an internationally recognized brand."

For Razzaque, finding a backer close to home was a testament to his product's sensible business model and staying power. He explains that investors in the region focus on business fundamentals: revenue, number of customers and profitability, whereas Silicon Valley will gamble on the potential of a tech business model, looking at the number of new customers and growth rate. Put another way, Razzaque's existing revenue stream wasn't sexy enough for the Valley, but it was a perfect fit for the mid-Atlantic investment scene.

Razzaque has already put the money to use, expanding SocialToaster's sales, marketing and customer service teams as he takes his message to even larger companies. "All we do is ask brands' superfans to amplify their marketing efforts," he says. "It's as easy as toast."