Welcome to episode 9 of Fundraising Demystified. In this episode, we had the pleasure of speaking with Andrew Neuse, the founder of Wundergraph, a next-generation framework to optimize frontend, backend, & full-stack developer workflow. They've recently raised a $3 Million Seed round. We talk about how founders need to understand the VC game, why cold emails won’t work & why founders should focus on building a brand instead, & why he thinks the pitch deck isn’t as important as most think it should be. Let’s dive in.
From Self-Taught Software Engineer to Startup Founder
Jens recounts his journey from being a self-taught software engineer to starting Wundergraph. His experience in the field, working on a failed startup and honing his skills in various companies, led him to the realization that integrating multiple systems with different languages and APIs was a time-consuming process. This realization sparked the idea for Wundergraph, an open-source project that eventually evolved into a full-fledged company.
Wundergraph's team of four, comprising Jens and his co-founders, brings together diverse skill sets that complement each other.
The Fundraising Journey and Understanding Venture Market Fit
Wundergraph's fundraising journey was not without its challenges. Jens highlights the importance of building relationships and finding the right partners among venture capitalists (VCs) who align with the company's vision. Rather than solely focusing on convincing VCs about the idea, Jens emphasizes the significance of showcasing a strong team and demonstrating traction.
Understanding the VC game and achieving Venture Market Fit (VMF) is crucial for founders. Just like product-market fit, VMF ensures that founders are building something that VCs find exciting and are actively investing in. Building a brand, being accessible to VCs, and strategically timing funding announcements are essential aspects of achieving VMF.
Raising Funds: KPIs, Traction, and Building a Great Company
Jens emphasizes that having great key performance indicators (KPIs), good traction, and a proven business model are more important than having the best pitch deck. Founders should focus on building a great company and presenting it in a way that piques the interest of VCs.
Wundergraph's growth trajectory showcases the importance of persistence and customer-centricity. Acquiring their first customer who paid $3,000 per month was a significant milestone, and the company now focuses on fueling growth based on customer feedback.
Setting Up a C-Corp in the US for Non-US Founders
The founders of Wundergraph, based in Germany, explain the advantages of establishing a Delaware C-Corp. They highlight the benefits of the US tax system and the ease of attracting US investors. By setting up a subsidiary GmbH in Germany, they can pay regular salaries to the founders. The process of setting up a C-Corp through Stripe Atlas was straightforward, although legal counsel was sought to ensure the correct company structure and ownership of intellectual property.
Wundergraph's Future and Advice for Founders
Wundergraph is currently in the late stages of closing some exciting accounts and expects to optimize their KPIs before raising the next round. Jens advises founders to maintain relationships with VCs who passed on previous rounds, as updates and rapport can make future fundraising easier.
Jens provides valuable advice for founders looking to raise their seed round. He emphasizes the importance of shifting focus from technology to the customer, go-to-market strategy, and building a business that interests VCs. Highlighting the significance of marketing, unique selling propositions, and solving people's problems to generate revenue and attract investors.
Wundergraph, with its open-source product for working with APIs, offers benefits for startups and enterprise companies alike. To learn more, follow Jens on Twitter and visit Wundergraph's website and GitHub repository.
In conclusion, Jens Neuse's insights on venture market fit, building a brand, and navigating the fundraising landscape provide valuable knowledge and inspiration for founders at all stages of their entrepreneurial journey.
Links mentioned:
Wundergraph website - https://wundergraph.com/
Follow Jens on Twitter - https://twitter.com/jensneuse_de
Follow Jens on Linkedin - https://www.linkedin.com/in/jens-neuse-706673195
Hosted by Jason Kirby - https://www.linkedin.com/in/jasonrkirby/
Email Jason at jason@thunder.vc
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