Some heavyweight investors are lining up behind AdReady, the Seattle startup that is attempting to make it easier to place display advertising on Web sites. Bain Capital, Khosla Ventures and existing investor Madrona Venture Group are pumping $10 million into the company, cash that it will use to increase marketing and hire new employees.

Founded last year by former Classmates.com executives, the 33-person company plans to end next year with 50 to 60 employees, said Chief Executive Aaron Finn.

Launched in October, AdReady has developed an online library of about 600 prefabricated display ads in categories such as real estate, education and travel. Customers choose an ad, customize it and then -- with AdReady's help -- launch it into the ad networks from Google and Yahoo's Right Media.

So far, about 1,000 companies -- ranging from plumbers to painters to major airlines like Alaska Air -- have signed up for the service. The ad-creation tools are free to use, with AdReady getting paid when a client decides to set a budget for the campaign. AdReady takes a 20 percent commission on the campaign.

For example, if a painting company wanted to spend $1,000 to market services in Seattle, AdReady would earn $200. It requires that companies have a minimum campaign of $100.

AdReady's service is a far cheaper alternative than a small business going to an agency to create an ad, said Finn.

"We really remove a lot of the cost out of the creative development process," he said. "If you walked into any creative agency, you are going to pay anywhere from $500 to $5,000 to have an ad created for you."

AdReady's goal is to remove that cost so clients can spend more money fine tuning the ad to get the maximum bang for the buck. "That's the most important thing is finding what works for you," he said.

To get the word out, AdReady is using its own customized ad tools to market on Web sites for small business owners. (Talk about eating your own dog food.) AdReady also has created a specialized version for business customers. For example, The Cobalt Group -- the Seattle online automobile marketing services company that I featured yesterday -- is testing a program to resell the display advertising tools to its auto dealers. AllRecipes.com, the Seattle unit of Readers' Digest, also is working with AdReady.

Auto represents a huge market, with Finn saying they have already had some success with local dealers.

"It really started to show that online is really where people are making their buying decisions and not only should you be doing search, but you should be doing more traditional types of display advertising," he said.

In the near future, AdReady wants to license the service to online publishers who could use the tools as a way to target smaller advertisers.

"If you go to most publishers right now, there is a $25,000 a month minimum to work with them. But they get a lot of people who want to spend $1,000 or 5,000," he said. "We are really a great way to increase that ability to scale to smaller advertisers."

As part of the investment, Bain Capital's Ajay Agarwal has joined the board. Total financing in the company now stands at $12 million.

Finn said the financing process moved quickly, with the company targeting less than 10 investors for the venture round. Several wanted to invest, with multiple offers arriving at the doorstep.

"We got a phenomenal response," he said. "The market is hot. It certainly didn't hurt with what happened with aQuantive and DoubleClick and Right Media in the Spring."