Flashy filmed interviews with founders, neatly designed graphs and ideally timed social media posts make up the visually rich storytelling behind equity crowdfunding rounds - something we've learnt to take for granted from startups looking for retail investors to back their big idea.
The digital marketing that goes on behind the scenes of these crowd-sourced funding rounds is a niche that Neon Treehouse founder and agency CEO Josh White has deftly tapped into, bringing the campaigns to life for the likes of sports drinks manufacturers, tech companies, e-bike businesses and more across numerous platforms.
Business News Australia jumped on the phone with White to find out more about his newfound speciality.
Since Australian lawmakers changed the Corporations Act to let companies raise capital via equity crowdfunding from retail investors in 2018, the space has been booming.
According to crowd-sourced funding facilitator Birchal, more than $72 million was raised over 91 crowdsourced funding campaigns from more than 35,000 retail investors in 2022, demonstrating the importance of the financial instrument to the local start-up and scale-up scene.
Core to an equity crowdfunding round’s success however is the ability to convince retail investors to put forward their hard-earned money into nascent companies that demonstrate promise but require capital to get to the next stage.
For the founder of Australian digital marketing firm Neon Treehouse, Josh White, the growth of the equity crowdfunding space represented an untapped niche.
It was an approach from a friend of a friend that led Neon Treehouse to ‘stumble’ across the opportunity, running the campaign for sports drink PREPD’s equity crowdfund with just one day’s notice.
“A lot of firms aren’t interested in doing them because they’re very high pressure if you don’t know what you’re doing. It can kind of feel like you’re the reason why it flops or not,” White told Business News Australia.
“But I was interested in the space and I wanted to be a part of it, so I said ‘get me in on it, I’ll make it happen’.”
The raise, facilitated via Birchal, eventually bagged Adelaide-based PREPD close to $1 million, enabling the company to grow into the US. Neon Treehouse also ran the digital marketing efforts for the scaleup’s second raise, and in total has helped the sports drink manufacturer raise $1.6 million.
“We actually have ended up working with PREPD for two and a half years, helping them grow as they were trying to build an internal team that can scale even further,” White said.
Since then, Neon Treehouse has also worked with Melbourne-based proptech outfit Erin Living Co. on its initial $368,000 equity crowdfund, e-motorbike brand Braap’s $500,000-plus raise, fashion label Sunset Lover’s $200,000-plus raise and a small raise for theatre streaming platform Theatrix via Swarmer.
This involves ‘the whole gamut’ of services according to White, including social media ads, digital ads, google ads, SEO, email marketing automation, website design, creative work - the lot.
“It’s definitely a space that we love. I’ve always had a real affinity given our own startup journey with Neon Treehouse,” White said.
“Whilst we do work across e-commerce, I suppose a soft spot for us, and what we’ve always been very passionate about, is the startup space and helping to grow amazing businesses."
Not every crowdfund is a success though, and for every headline about scale-ups smashing records on Birchal, VentureCrowd, OnMarket, Equitise and Swarmer, there are plenty that fall through the cracks.
Having been brought onto a few raises now, White said it was important that companies looking to the instrument use the expressions of interest (EOI) phase to find out ‘the heat of the market for your product’.
“The sorts of businesses that don’t have universal understanding from the general public, they often struggle a little bit to get the momentum that they’re looking for from the EOI stage,” White said.
White suggested startups use the EOI stage to see if there's an appetite for the business before going all-in on the raise component of the process, giving founders an opportunity to refine their pitch to investors.
“The reality is that not every campaign that starts will finish," he said.
"We tend to work with the platform to identify what opportunities there are with the current databases and audiences to bring these campaigns to life.”
A decade in business, and leaving Adelaide
Having celebrated 10 years in business last November, White says the milestone marks a ‘coming of age’ moment for Neon Treehouse, which started in South Australia back in 2012.
The company itself was born from a rebrand of White’s digital marketing service providers Social Tree and Knackmap, which eventually turned into the full-service digital agency Neon Treehouse.
Since becoming Neon Teehouse the company has grown steadily, and was named one of the top 25 growth businesses in SA in 2021 and 2022 by BDO’s Fast Movers report.
Its roots have grown too, with the company expanding beyond Adelaide to open up offices in Sydney and Melbourne, where the founder is based.
“I go back [to Adelaide] pretty much every fortnight for a couple of days. I love Adelaide - my family is there - and I go and see all of the beautiful beaches,” White said.
“I used to hate Melbourne - but when I started having to enter the different cities while trying to work out how we were going to move I started experiencing more of the suburbs - I love the feel of the suburbs here and I ended up taking very strongly to Melbourne once I stopped being a tourist.”
White said there was little appetite for the services the company (originally called Social Tree) was offering at launch, and that many only realised the latent power of digital and social media advertising much later.
The services on offer were scant too, so White built Knackmap - software that facilitated digital advertising services for clients - and changed the company’s name.
“But probably a year and a half after we launched it there were some big funding deals for competing platforms (Sprout Social, Hootsuite, etc.) and we ultimately decided that the software had kind of run its course as a contender trying to create a better experience for social media marketers,” White said.
“At which point we refocused ourselves back on the consulting side and the agency side and at that point the market was ready - people had realised there was something to this social media and digital marketing space.
“So we rebranded to Neon Treehouse and we took ourselves back to the market and we’ve seen some awesome growth from there.”
As for the future, White said the company had some ‘pretty aggressive goals’ to expand the company’s existing operations, specifically the group’s physical footprint.
“One thing that I’ve learned, especially over the last couple of years is that everything can be done online but nothing can replace the human connection piece of what we do,” White said.
“Adelaide, as a place, has very high standards about the expectations of service providers and the personal connection they have with their clients. I think that’s why we’ve been able to scale so nicely here in Melbourne because of the fact we’ve taken a lot of our style of working over here. That’s something we’re really proud of.
“So the plan is to scale that beyond the two cities - we’ve got our eyes set on Southeast Asia.”
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