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Targeted digital marketing firm Social Startup Labs has firmly established itself as a key player in the equity crowdfunding space, having helped more than 20 startups raise $8 million-plus in the last 18 months in both Australia and the UK.
Behind the Newcastle, NSW-based company’s success is founder Pippa Smith, who spent years learning the ins and outs of the equity crowdfunding startup world in London before making the jump to Australia and establishing her own end-to-end service to support local businesses.
Speaking with Business News Australia, Smith explained how building rapport with crowdfunding platforms helped put her firm on the map for entrepreneurs Down Under.
“We've got really good relationships with the crowdfunding platforms…we've worked really closely with them and built up a really good reputation," says Smith, a 2024 Australian Young Entrepreneur Awards finalist.
"Other people will see the campaigns that we advertise and then ask the brands: How did you raise? How did you do that?”
“We work to really quick turnaround times, which is probably the most important thing when raising capital. It's quite an intense process for a founder, and they've often got their head in so many different parts of the business."
She says Social Startup Labs takes away some of the burden of managing the process, which can be "pretty intense over an eight-week period".
"It's more like a sprint than a generalised marketing campaign. It's not like marketing a product to a consumer; it's marketing shares to investors. It’s a different kettle of fish.”
The company offers a suite of services, including digital media marketing, email marketing, social media management, web design, video script, storyboard and production, equity crowdfunding offer document writing, investor memorandums, campaign consulting and more.
Clients that have worked with the Social Startup Lab include kombucha brand Nexba, bulk food coop service Box Divvy, and Venus Shell Systems, the parent company of seaweed supplement brand PhycoHealth and seaweed skincare company PhycoLife.
With the help of the firm, last year saw PhycoLife secure almost $1.2 million in funding via Swarmer during its second raise, where it promoted the first marine-based hyaluronic acid – an ingredient often used in skincare to increase moisture and reduce skin wrinkles and lines.
“We promoted their campaign to their existing investors and community, and also raised awareness for their raise to new investors using paid advertising,” Smith explained.
“What we found is a lot of the existing community had been sitting on the fence, or they doubled down on their investment in the second raise," she says.
"Because they got such good momentum on their first day - I think they raised about $550,000 on day one - we then could market that and say they were oversubscribed by 200 per cent to 300 per cent.
"When you put that into advertising and you remarket that to everyone, people get very excited and also want to be on board.”
Accustomed to the mature equity crowdfunding market in the UK, Smith also noted the differences in investor behaviour and funding trends between the two countries.
“It is definitely a different climate because the UK market is more mature. However, we still have some really successful campaigns currently on at the moment. What's kind of happened is the really early-stage businesses - pre revenue businesses - are not capturing as much funding,” she said.
“The market is being a lot more conservative about where they're putting their funds. What's kind of happening is people are putting all of their eggs in one basket.
“With later-stage businesses, one of the things that I say to clients or people who are looking to raise as well at the moment is to try and gather their community on board as much as possible, because the whole concept of crowdfunding comes from the crowd. Being able to leverage your existing community and your existing crowd is really important.”
Social Startup Lab has worked on more than 20 equity rounds so far. Smith - who works alongside her partner and one more employee – is optimistic this number will continue to rise, with her eyes set on industries such as food and beverage, agtech, lifestyle and fast-moving consumer goods (FMCG).
Enlisting the help of the firm, Nexba – founded by Troy Douglas and his brother-in-law Drew Bilbe - managed to raise $718,744 via VentureCrowd in July 2024 to accelerate global expansion plans.
“A lot of the businesses that we work with are doing good for people on the planet and we love working with brands in that kind of space,” she said.
“There are particular investors that we target, and we know that work...a lot in agtech, food and beverage, lifestyle brands, FMCG (fast-moving consumer goods).
"We worked with Nexba recently to support their global expansion plans. We delivered three different raises with them. One on VentureCrowd, a follow-on round on Birchal, and a final campaign in the EU on Crowdcube.”
Despite the legal intricacies that come along with marketing in this space, Smith and her team are keen to deliver.
“You do need to include disclaimers on every single piece of material that goes out to prospective investors and the community. Anything that mentions capital raising has to adhere to ASIC’s rules, and then it also needs to include the disclaimers that you should always consider the risk warning and read the off document before investing,” she said.
“We just try and set ourselves apart by becoming essentially an extension of a client's team over those eight weeks.”
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