I think there's probably a ton of one-man businesses out there that want to buy advertising, but don't have the technical or financial means to do AdWords (or similar) effectively. If those people could risk $50-$100 on sponsoring some content to see what kind response they get, I think some would.

If you can make it so people can generate sales by spending $50-$100 at a time that would be of great value.

A newsletter seems like a very good idea, although I doubt you should restrict yourself to that. Also, I think many (not all) small businesses will want to advertise locally. You should make sure businesses only see requests for sponsorship they might conceivably sponsor.

I don't like the domain at all. I think it'd be much better to find a single made up word that's brandable, or a multi-word domain that's not a misspelling.

I don't know how you're planning to make money, but I don't think anyone would complain if you took a cut of the ad buy.