Updated

zvents.bmpZvents, which lets people search for events in their neighborhood, has raised $7 million in a first round of funding led by VantagePoint Venture Partners.

That is a very large sum of money, and it raises questions about the company’s business model. Such a large round makes it more difficult for Zvents to return a profit to investors. This suggests Zvents is swinging for the fences — it will have to become all pervasive. VantagePoint was a backer of MySpace, so it has expectations.

Menlo Park’s Zvents is striking partnerships with news organizations around the country, including with the Mercury News, Miami Herald and Contra Costa Times and Denver Post. Zvents gets a share of the advertising revenue that runs beside the event listings, and newspapers get access to Zvents’ Ajax-based easy-to-use interface. Beside its listings, Zvents pulls in other things like neighboring bars and restaurants through Google maps (Here is the SF Web 2.0 conference listing, for example), making it useful for users. However, there are competing events sites, such as Eventful, and other sites like Topix.net, which is also striking local partnership deals with news groups and hoping to profile events.

Zvents launched at last year’s Web 2.0 conference. Then, chief executive Ethan Stock said he would raise venture capital this year; he has slipped in just before the bell. He says the cash is justified: $10 billion in advertising still needs to move online, news organizations are having to upgrade their offerings to grab that advertising, and Zvents is right smack in the middle of that, he said. Topix.net raised even more cash ($15M announced yesterday), a bundle that is going to be difficult to make a good return on (although in Topix’s case, the investment has become more strategic, because investors are the news organizations themselves).

Here’s our write up of the partnership with the Mercury News.

Previous seed investors Red Rock Ventures and NetService Ventures Group participated. The funding will be used to expand Zvents’ geographic coverage across the U.S., the company said. It is about to sign up Boston.com, and an organization in Los Angeles, Stock said.