In-image ad startup Image Space Media has raised $2.9 million in a first round of funding led by New Atlantic Ventures. Image Space Media puts small overlay ads on the lower half of images on a website; ads only show up when a user mouses over a photo (See an example here). The company says its system—which “serves hundreds of millions of impressions per month”—provides publishers with additional “incremental” ad revenue, while still allowing them to participate in traditional ad networks.