In mid-2022, Leon Wisskirchen (BSc, 2019 and former Head of Operations at SumUp USA) and attorney Konstantin Haefner (a former legal advisor at online bank N26) founded Velsa, a tech start-up that has developed a new way for entrepreneurs to get legal advice online. Velsa automatically generates strategic legal plans based on a given business model and product idea. By doing so, they can collect all the data needed when a company is on the hunt for a suitable lawyer: legal milestones, costs, and timeframes.
1. With Velsa, you’re trying to rethink the legal market and legal counseling for start-ups. What does that entail for you?
Leon Wisskirchen (LW): The number of start-ups operating in highly regulated fields (e.g., finance, health, or pharmaceuticals) has boomed over the past few years. These companies mostly need, apart from venture capital, help with their regulatory questions. The problem is that these teams need to spend a lot of time—and need to have a lot of luck—to find the right advisor. We want to change that. What we offer these founders is, in some ways, a “lawyer” that they can carry around in their pockets, allowing them to get clarity on any legal implications of any given business action or new product within a matter of seconds. With the help of the data collected, our software is able to connect our clients with legal help tailored to them. That way, we’re making a lawyer search possible that is based on data and not on “who knows whom.”
2. One of the most well-known online marketplaces for acquiring legal help, Advocado, announced bankruptcy in July. What will Velsa do differently?
LW: Advocado mostly focused on the end customer. But, from an economic perspective, this can lead to some difficulties, as the final value of the services rendered ends up being too low. You can’t easily make a business model out of “I’ve had an accident! What do I do?” We’re focusing on businesses and the complex legal questions that they encounter again and again during their life cycle. Doing so generates continuous revenues and promises significantly higher profitability. Additionally, Velsa offers start-ups another major advantage over the traditional “old industry” marketplaces: Our software already understands the legal concerns of a particular business model, for example what license you might need. Based on that input, it subsequently provides customized access to a top advisor.
Searching for lawyers without having the proper input is like going sailing without a compass. You could find yourself stuck on the wrong island. Or you could sink.
3. You both met at the Accelerator program “Entrepreneur First.” How did you both link up? And what makes you a good team of founders?
LW: I wanted to find someone with a complementary set of skills and who is 100% committed to chasing a new idea. In the process, I kept crossing paths with Entrepreneur First, a talent investor, in Berlin. Entrepreneur First matches hopeful founders and supports them as they start their ventures. A cohort of 50 potential CEOs and CTOs, a three months founders’ program, and the chance to secure a pre-seed investment? That sounded interesting.
Investors typically ask themselves three questions: Why you? Why now? And why at this scale? Konstantin and I understand the challenge of scaling highly regulated companies—and of advising them during this process. Konstantin, as a former lawyer at N26, and myself, as the former Head of Operations at SumUp USA. In Germany, one classic topic is, for example, meeting the requirements of the Federal Financial Supervisory Authority (BaFin), which don’t always fit with modern and digital businesses. It’s often only through first-hand experience that one gains the insights (that aren’t entirely obvious) needed to identify a problem, come up with a solution, and, ultimately, generate value for the customer.
4. Many WHU students and alumni want to start their own companies. What tips do you have for them to find the right co-founder?
Konstantin Haefner (KH): Finding somebody with complementary talents but a different background was also a priority for me. That just makes it so much more probable that you’ll be able to develop an innovative business model together. In our case, Leon brings his deep understanding of operative teams and systems in FinTech; I bring the legal know-how needed to build our product.
But really, the foundation for a successful co-founder relationship is built on something else, and that’s common values. As complimentary the co-founders’ skillsets must be, the co-founders themselves need to be aligned when it comes to their principles. The values that we share and deem important include, for example, tolerance, trust, and reliability. But we also spoke at length about our intrinsic motivation, our goals, and our boundaries. Differences do not necessarily need to be a roadblock. They should just be communicated openly early on.
LW: The same is true when it comes to recruiting. One common mistake is ranking professional qualification over cultural fit. We believe that you can learn a skill. You can’t learn value. The easiest way to figure out the cultural fit is through their interactions with others. How do they treat their friends? How does this person think of others? Are they considerate of others? Do they treat them with respect?
5. How can one determine, after or just before a start-up has been founded, that the team has any legs?
KH: The most important indicator of whether the team can have success is its productivity. How can one measure productivity? Good teams can develop, build, and sell something right from day one. Bad teams look for excuses for why they can’t.
Everybody on the founders’ team must have that feeling that their own productivity has tremendously increased as a result of working together—be that in form of better decision-making, faster coding, or easier customer acquisition. Is the team more productive than the sum of its parts? If that is not the case, the opportunity costs of this partnership are likely too high, and you should look elsewhere.