🇩🇪 How to Start a Company in Germany: The Digital Playbook for Founders
- Jörn Menninger
- Oct 20
- 35 min read
🚀 Management Summary
Starting a company in Germany has long been associated with mountains of paperwork, notary appointments, and waiting in line. For international founders, the barriers felt even higher. But that’s changing rapidly.
This article breaks down how LegalTech and Fintech platforms like Beglaubigt.de and Holvi are simplifying company formation through digital notarization, compliance automation, and streamlined onboarding — without compromising on legal rigor.
You’ll find:
✅ The key steps to starting a company in Germany
🧠 How LegalTech digitizes bureaucracy
💸 How fintech integrations speed up founder onboarding
🌍 Why international founders have new opportunities in Germany
🗣️ Voice-ready answers for AI search and assistants
📚 Table of Contents
The Bureaucracy Problem
How LegalTech is Digitizing Company Formation
Fintech + LegalTech Partnerships: A New Era
Step-by-Step: How to Start a Company in Germany
Foreign Founders: Special Considerations
Key Takeaways
FAQ
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🏢 The Bureaucracy Problem
Why is starting a company in Germany so complex?
Company formation in Germany involves notarization, legal checks, and multiple authorities — creating delays and friction for founders.
For decades, the German startup formation process has followed a rigid, paper-based model. Founders had to coordinate in-person notary appointments, bank account openings, shareholder agreements, and registration with local Handelsregister (commercial registers).
This complexity doesn’t just slow founders down — it discourages foreign entrepreneurs who lack German legal fluency. A single missing document can lead to weeks of delay.
But the real friction comes from fragmentation: legal, banking, and compliance processes sit in silos.
🧠 How LegalTech Is Digitizing Company Formation
Can you start a company in Germany online?
Yes — LegalTech platforms enable digital notarization and document verification, making online company formation legally valid.
LegalTech pioneers like Beglaubigt.de are modernizing the notary process. Using secure video identification and digital signature technologies, founders can now
digitally notarize incorporation documents, authenticate shareholders remotely, and automate filings with authorities.
This change is a paradigm shift:
📝 No more printing and signing stacks of paper
📅 No waiting weeks for notarization appointments
🌐 International founders can incorporate without being physically present
Pro Tip: Use a LegalTech platform early in the process. It ensures documents are correctly formatted and saves significant time at registration.
🏦 Fintech + LegalTech Partnerships: A New Era
How does fintech make company formation faster?
Fintech integrations remove friction in business banking and compliance, enabling same-week company formation in many cases.
Banking has traditionally been a bottleneck. Many founders waited weeks for business bank accounts to be opened, stalling legal registration.
Fintech platforms like Holvi now integrate directly with LegalTech solutions to:
🏦 Open business accounts in parallel with legal filings
🧾 Automate KYC/AML compliance
🔄 Exchange data with notaries and authorities in real time
For founders, this means onboarding time drops from weeks to days.
Stat Spotlight: According to Beglaubigt.de, digital notarization reduces incorporation time by up to 60% compared to traditional methods.
📝 Step-by-Step: How to Start a Company in Germany
What are the steps to register a company in Germany?
Choose legal form → Prepare documents → Digital notarization → Register with Handelsregister → Open business account → Start operations.
Here’s the modern founder’s roadmap for company formation in Germany:
Choose Legal Form
Most startups pick GmbH (limited liability company) or UG (mini-GmbH).
Prepare Legal Documents
Articles of association, shareholder agreements, and director appointments.
Digital Notarization
Use a platform like Beglaubigt.de to handle remote notarization.
Commercial Register Filing
Submit digitally via LegalTech integrations. Receive confirmation in days, not weeks.
Open Business Account
Platforms like Holvi streamline KYC and verification.
Start Operations
Once registered, you can sign contracts, hire, and invoice.
🌍 Foreign Founders: Special Considerations
Can foreign founders start companies in Germany remotely?
Yes — EU and non-EU founders can start companies remotely using LegalTech, but may face extra compliance steps for identification and banking.
For foreign founders, LegalTech is game-changing. Platforms enable:
Remote identity verification
Multi-language document support
Coordination between local notaries and foreign shareholders
However, banking compliance remains more stringent for non-EU citizens. Fintech integrations help smooth this, but founders should prepare:
Certified IDs and translated documents
Proof of address and business purpose
Potential additional KYC steps
📌 Key Takeaways
German bureaucracy is real — but digital notarization and Fintech integrations are dismantling bottlenecks.
Founders can now incorporate remotely with full legal compliance.
Partnerships like Holvi × Beglaubigt.de mark a systemic shift in how startups enter Germany.
International founders have a clearer, faster path than ever before.
Those who prepare legal documents early save the most time.
💬 Founder Quote Box
“The day I didn’t have to queue at the notary’s office was the day I knew German bureaucracy was changing.”— Foreign Founder, 2025
🌐 Market Lens
Gemany’s LegalTech landscape is moving from niche to infrastructure. Regulatory changes in digital notarization law and EU AML frameworks are enabling platforms to operate across borders, making Germany more attractive to international founders — especially in SaaS, fintech, and B2B tech sectors.
🧵 Further Reading
External Links
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📝 About the Author
Jörn “Joe” Menninger is the founder and host of Startuprad.io — one of Europe’s top startup podcasts. Joe's work is featured in Forbes, Tech.eu, and more. He brings 15+ years of expertise in consulting, strategy, and startup scouting.
✅ FAQs
1. How do you start a company in Germany?
To start a company in Germany, you must choose a legal form (GmbH or UG), prepare incorporation documents, get notarization, register with the Handelsregister (Commercial Register), and open a business bank account. Using LegalTech platforms like Beglaubigt.de can simplify notarization and filings.
2. Can I start a company in Germany online?
Yes. Since 2022, digital notarization and remote identity verification have been legally approved. Platforms like Beglaubigt.de allow founders to incorporate fully online without physical notary visits.
3. What documents do I need for German incorporation?
Typically, you’ll need your Articles of Association, shareholder list, director appointment resolution, proof of capital contribution, and ID documents. Non-German founders may also require certified translations.
4. How long does it take to form a GmbH digitally?
Digital incorporation can take 5–10 business days if all documents are correct and bank verification is automated through Fintech providers like Holvi. Traditional methods can take 3–6 weeks.
5. Can foreign founders incorporate remotely?
Yes. EU founders can incorporate entirely online. Non-EU founders may face additional KYC checks but can still complete the process remotely with proper documentation and digital ID verification.
6. What LegalTech platforms operate in Germany?
Top LegalTech platforms include Beglaubigt.de, Firma.de, and Notar-Digital — all specializing in online notarization and company formation support.
7. How does fintech speed up company formation?
Fintech platforms like Holvi integrate business banking, KYC/AML compliance, and account opening into the registration flow — reducing waiting times and eliminating repetitive data entry.
8. What is digital notarization in Germany?
Digital notarization uses secure video identification and qualified electronic signatures to verify incorporation documents online, ensuring full legal compliance under German law.
9. Do I need to visit a notary physically?
Not anymore. Since the digital notarization reform, most founders can verify documents online. However, certain edge cases (like property transfer) still require in-person notarization.
10. What is the role of Holvi in company setup?
Holvi simplifies banking for new companies. Its integrations with LegalTech providers like Beglaubigt.de allow founders to open business accounts while their incorporation is being processed — saving days or even weeks.
11. What’s the best legal form for startups in Germany?
Most founders choose a GmbH for limited liability and investor compatibility, or a UG (haftungsbeschränkt) for lower capital requirements (€1 minimum share capital).
12. How much share capital do I need to start a GmbH?You need a minimum of €25,000 in share capital for a GmbH, or €1 for a UG. You can deposit half (€12,500) upfront for GmbH registration.
13. What taxes apply to German startups?
Companies pay corporate income tax (15%), solidarity surcharge (5.5%), and trade tax (14–17%) depending on municipality. A tax advisor is recommended during setup.
14. Can I open a German business account without being in Germany?
Yes — with fintech banks like Holvi or N26 Business, international founders can open accounts remotely using video ID verification and electronic onboarding.
15. How do LegalTech and Fintech partnerships help founders?
By synchronizing the legal and financial steps of company formation, these partnerships reduce duplicate verification processes and accelerate go-to-market time for founders.
16. Is digital incorporation recognized legally?
Yes. Under the Online Incorporation Act (2022), digital incorporation via electronic signatures and video verification holds full legal validity in Germany.
17. What’s the biggest mistake founders make when incorporating in Germany?
Underestimating document accuracy. Even minor inconsistencies in shareholder details or translations can delay registration. Using LegalTech ensures templates meet regulatory standards.
18. Can I register multiple founders online?
Yes. Multiple founders can join the same video notarization session from different locations — one of the key advantages of digital notarization.
19. Are LegalTech platforms safe to use?
Yes. Platforms like Beglaubigt.de comply with GDPR and use qualified electronic signatures (QES) — the EU’s highest standard for digital identity verification.
20. What’s next for LegalTech in Germany?
The next wave will include AI-assisted document drafting, automatic compliance updates, and integrated founder dashboards connecting notaries, banks, and tax advisors in one interface.
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The Host & Guest
The host in this interview is Jörn “Joe” Menninger, startup scout, founder, and host of Startuprad.io. And guest is Maximilian Wilk, Co Founder & CEO of AQON PURE
📅 Automated Transcript
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:00:00]:
If you're a founder in Germany, here's the brutal reality. Setting up a company still takes weeks, costs a fortune and often ends with a fax. Yes, a fax to a notary. That's why Germany's the startup rate has sunk to its lowest point in a decade. Today we're joined by Alexander Muller Holvi star Felix Gelach y Combinator backed founder of Beclaubic de Together they're on a mission to break Germany's bureaucratic barrier to entrepreneurship. In this episode, we'll unpack how fintech and Legal Tech are rewriting the rules of company formation and what that means for the future of founders across Europe. Welcome to Startuprad IO, your podcast and YouTube blog covering the German startup scene with news, interviews and live events. Foreign let's start with our first guest, Alexander Muller.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:01:05]:
Hey Alex, how you doing?
Alexander Müller | DACH Country Director | Holvi [00:01:07]:
Very good, very good. Pleasure being here.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:01:10]:
He began his career help at Accenture, helping financial institutions navigating digital transformation. From there he joined Speed Invest back in fintech startups across Europe and Southeast Asia. Later he co founded Friday Finance which was acquired by pliant in 2023. Today, as Ho V's country director for Germany Austria, Alex leads one of Europe's pioneering new banks for SMEs, combining business accounts invoicing and bookkeeping into one streamlined platform. Alongside him is Felix Gelach. Hey Felix, how you doing?
Felix Gerlach | Founder | Beglaubigt.de [00:01:46]:
Hey, what's up?
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:01:48]:
One of Germany's most promising legal tech entrepreneurs, a y combinator alumnus, Match 2024 and Forbes 30 under 30, Henri Felix previously co founded Passbase, a digital identity startup acquired in 2023. Now with his new company Baglaubic Da he's tackling one of the most stubborn bottlenecks in the startup ecosystem, the notary process. By digitizing incorporations and making notary services accessible online, he's lowering barriers for founders across Europe. Together, Alex and Felix represent the future of business formation in Europe, bridging Legal Tech and fintech to create a seamless founder journey. Guys, welcome. This is going to be your interview. Alex, let's start with you. Once upon a time you were helping big banks as strategy consultant.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:02:44]:
Actually, I think we, we've been competitors at the time. What drew you into fintech for SME space?
Alexander Müller | DACH Country Director | Holvi [00:02:52]:
Well, it's been quite a long journey, but at the end of the day I think I really saw the problem from both sides. And now reflecting a bit about how SMBs are treated and from the eyes from a financial service provider, from the big banks, it's really like the unwanted stepchild of the banking world. They're not really retail because it's not the consumer, but they're also not commercial. Don't fall into the commercial banking area where big loans and big payment processing really plays a role. So I really get stuck in the, in the middle and it's, it's getting bounced around and back. At a time early in my career there was also when there was a ton of regulatory innovation or opportunity for regulatory innovation. PSE2 was just being ratified and rolled out. There was this open banking opportunity.
Alexander Müller | DACH Country Director | Holvi [00:03:37]:
And then when I switched to bc, I was at Speedy. I saw there's actually people that are really working on capitalizing on these opportunities. And from there on I decided to double down and try to solve it myself or become a part in solving it. And that's why ended up in the founding journey and later now at Holby.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:04:04]:
Felix, every founder has a spark. What was the one day moment when you realized Germany's notary system needing disruption? By the way, we're not actually attacking the notaries here, only the legal framework in which they need to operate. Just to be clear.
Felix Gerlach | Founder | Beglaubigt.de [00:04:26]:
Yeah, actually it was a series of events. Being in the startup scene for the last 10 years and seeing different markets basically how to incorporate companies in Germany as well as seeing startup scenes in London, Asia as well as of course Silicon Valley. Right. And I noticed of course there's a huge gap of how incorporations are done, how businesses business transactions are done in different places. Right. You can incorporate a company in UK for like 15 pounds, you can sign your series A papers in US just with like a digital signature and then you're coming back to Germany and seeing that like an incorporation takes up to like four weeks of time. And this is the big opportunities, the big opportunity that we are seeing with Beclavik and especially with the partnership with Holby.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:05:25]:
Germany's startup ecosystem has hit a 10 year low in incorporations. Why do you think the status quo persists despite widespread digitalization?
Felix Gerlach | Founder | Beglaubigt.de [00:05:36]:
Well, I think there are like a couple of factors. I think the conditions somewhere else are way better than in Germany nowadays. I think the smartest builders and entrepreneurs are moving abroad. They are incorporating their Inc or LLC somewhere else in order to raise faster capital, in order to attract faster talent and being faster to the market. And this is like unfortunately like an agitative trend. And basically we are here to disrupt this trend and bring it to the right direction.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:06:18]:
Alex, what's the biggest hidden challenge for SMEs facing in opening a business bank account in Germany today? I vividly Remember the days when I was, when I was an apprentice at the bank learning what amount of paperwork, like physical paperwork back in the days you really needed for opening such an account?
Alexander Müller | DACH Country Director | Holvi [00:06:45]:
Yes. I think if you, if we talk about the commoditized business bank account, an established company, then maybe there we have done a good, good chunk of work in the past 10 years to tear down the barriers to open a business bank account. But now imagine you're a first time founder, you don't have, you never incorporated before and you're like, okay, I'm going to incorporate and get my registration, I get, I start building my business model and then suddenly you are faced with oh, I need to do my share deposit, my share, my share capital deposit, I need to do my commercial registry integration. And suddenly you realize to get your company registered you need to prove that you deposited your share capital into a bank account. But in order to get a bank account you need to be registered as a, as a company and you really have this chicken and egg problem. And luckily there are solutions nowadays and a big bank, even until today they would still be very heavily paper based and sometimes costly to solve this chicken and egg problem. And we've been working a lot over the past few years to tear down these barriers as well and make it as seamless as digital first, as unbureaucratic as possible. And this is also where Felix and me have been building this partnership to make it much, much easier for founders.
Alexander Müller | DACH Country Director | Holvi [00:08:06]:
That being said, that's not, it's not a table stakes today and it's a pretty new product and many founders still face this challenge in opening the first business account.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:08:17]:
I remember that at one point banks accepted photocopies, but then you had to have a stamp, an official seal on it that was really the photocopy of something. So there was really a lot of admin work there. Felix, you built a legal tech in one of the most regulated lobby heavy industries. What kind of resistance have you faced from the association of notaries in German called Nutarkhammer?
Felix Gerlach | Founder | Beglaubigt.de [00:08:49]:
Yeah, very good question. I think it's very important to understand that we are not working against notaries and the Chamber of Notaries, but with them. Our goal is basically to enhance their processes and digitize the journey of a founder and making also the life for notaries easier. I think it's very important that we still center the most important part of the notary, like the seal, the trust seal at the very end in the process, but basically focusing our work of digitizing and enhancing their processes before an incorporation and Also afterwards, and this is very important as this is like an unsolved triangle between the founder, notaries, registries as well as banks. Right. And we are now here basically to solve this with technology and innovation. Of course we, we know that Germany and like the government parts are like still very slow. In order to understand how in a way how innovation is can impact also like the economy.
Felix Gerlach | Founder | Beglaubigt.de [00:10:10]:
But basically in order to stay competitive with Germany, we need to move the needle and we need to bring especially to the most regulated parts innovation.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:10:25]:
Both, both of you, I was wondering, Germany's often criticized for bureaucracy kill bureaucracy killing innovation. From your perspective, what is like the real root cause of that? Law, politics or culture? Because what I always have in mind is the saying Trauss no Kenshin, that means for example, cafe has a rule. If you sit outside, you can have a mug of coffee, you have to order the big expensive port and they just stick to the rule and they repeat it as often as you ask them. So is that culture piece of the puzzle?
Felix Gerlach | Founder | Beglaubigt.de [00:11:07]:
Yeah, very good question. I think Germany is deeply rooted in bureaucracy. I think we are like a paper first country. Every process, every process. Basically we need to fill out forms and it's still hard to innovate as like the governmental bodies like they have plume up like this is like the biggest employer in Germany and basically the government basically is trying to fence around outdated systems. The problem is, as I said, we are slowly losing the race in terms of international competition in terms of innovation. Innovation takes place somewhere else and not anymore in Germany. And I think something dramatic needs to change in the processes in order to foster innovation again.
Felix Gerlach | Founder | Beglaubigt.de [00:12:11]:
And this is why I'm so excited about like a partnership between like a NEO bank and US and also like innovative notaries in order to solve that in order to enable faster business transactions in Germany, from incorporations to the most critical business transactions. And one partner is basically unable to solve the puzzle. So therefore it's very important to partner up with big players in the market who have the right understanding why this is important and a wide understanding of the mission and vision that we face together.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:12:59]:
Alex, do you want to add something?
Alexander Müller | DACH Country Director | Holvi [00:13:01]:
First of all, I really agree with what Felix says that there is like all of the stakeholders have their individual part to play when thinking about how did we get to this point where we are today, that we are like paper first as a company or as a country. I think we've done a great job in optimizing our processes. The problem is that these processes are still decades old and aren't really Ready for what is the 21st century or what is nowadays a possibility. And I think this really is deeply rooted in our culture and also partially fragmented political responsibility. Culturally we are super risk averse, right? Ask our parents. Many of them will tell you, oh, I'd rather not even take a loan. Taking credit is bad. Only what I have for myself that is what's good.
Alexander Müller | DACH Country Director | Holvi [00:13:57]:
So it's this risk conversion that we grew up with and this risk aversion has also been codified into regulations and law. So it's really on us, like the next generation of builders and founders to break out of this very, very actively. And from a banking perspect perspective, I can say anyone or anyone who ever worked with compliance, it's much, much harder breaking up a rule than setting it up in the first place. So this is very, very active work we need to do. And always keep in mind that we do this to make things more innovative, smooth, but also safer down the line.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:14:35]:
For our audience. Felix, you once said the biggest hurdle isn't tech, it's psychology. You share a story where Bioc almost broke a founder's dream and how the club de changed that outcome in our founders vault. Alex Hovey has been around since 2011. What pivots did Hovey to make to survive in a fiercely competitive neo banking market?
Alexander Müller | DACH Country Director | Holvi [00:15:07]:
Yeah, I think the first pivot is already quite a few years ago. And this is really going away from just being this basic business account with access to a MasterCard or Visa card. Right. That was the, that was the innovative product in the late 2000 and tens and with something like a digital account opening we really could achieve that scale. And back at the time was so interesting our biggest competitors were the large incumbent banks. Now fast forward another five, six, seven years. Today it's completely different. Today our competitors aren't the large incumbent banks anymore, but it's all the other digital players, the business banking players which are also hitting the market and trying to increase the market share.
Alexander Müller | DACH Country Director | Holvi [00:15:53]:
And this is where for us it was also very clear to not just expand the product beyond an accounting card where we integrate with partners for example, or build our own ancillary products, but we also need to expand the market segments that we address. Historically, Holby was mostly focusing on sole entrepreneurs and freelancers. Nowadays more than half of our customer base are SMBs incorporated companies. And the crux, what's really most imperative for us was always to keep focus while expanding. If you're not keeping focus for us that meant really being picky about the type of customers we want to expand with because every customer will then bring back requirements like expectations and you need to suit it to them otherwise you're not building a a product that satisfies everyone's needs. And that focus, that prioritization was really key when doing our pivots or expansions in the course of our company's history.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:16:59]:
Felix, I'm curious how did your path based exit shape the way you right now building the CloudBICD?
Felix Gerlach | Founder | Beglaubigt.de [00:17:10]:
Very interesting question. I think Biglaubigt is now like a completely different company. How we build basically passpass back then with passbase we raised more than 20 million USD towards series B and hired as fast as we could. And after basically selling the company to a US competitor we sat down. My co founder and me sat down and said okay, what is actually the truth of entrepreneurship and what do we want to solve actually? And our take was that it's all about what kind of value can you bring to the market and to your users and not how much money you can raise or how fast you can grow in terms of employees. So we started basically big labic de like openlodic, the company behind with the mission of like building a product that brings value to the market and building a product and company that is super healthy from day one. So therefore we started bootstrapping backlaubeck for more than 12 years to actually find a product that brings value to the market before we actually try to onboard external money to leverage our efforts. And nowadays we we are standing with a very healthy company.
Felix Gerlach | Founder | Beglaubigt.de [00:18:42]:
We gathered the most talented designers, engineers and operators around us in order to be mission centric and not VC centric. And we care a lot about our users. Our users are founders and SMEs and small business owners that want to do business faster in Germany and we enable them to digitize many processes that were stuck in the past.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:19:16]:
Interesting observation. I've heard this line of thought. Some call it startup centric, some call it customer centric versus VC centric quite a lot this year. I think that that's new train of thought going through the minds of Entreprene here in Germany. Alex Hovey integrates banking, investment invoicing and bookkeeping. Actually that piece is no fun and I appreciate everybody who helps with that. What's your playbook for making these tools usable for non finance savvy founders? And everybody who did in Germany a VAT filing can understand that you need quite some knowledge to just do that, right? Yeah.
Alexander Müller | DACH Country Director | Holvi [00:20:07]:
I'm also coming back to this customer centricity and VC centricity in a second. I think to your question right now. On paper, our playbook is really simple. We use that little bit of Nordic mentality that we have. As you know, Holby has finished roots and the design philosophy that really says things just need to work at the end of the day, that's the most important. You get a business account, you get a card, you get financial admin tool, and it just needs to work. It's as simple as that. And in order to make this work, you really need to hammer down on the customer centricity.
Alexander Müller | DACH Country Director | Holvi [00:20:42]:
And what I've learned over the years, it's not just a platitude that people say in podcasts. The previous company that we built was definitely a bit more VC centric, and we did a lot of polishing to make the journey look good on paper. But what really matters is that you sit down and focus on customer centricity. This is easier said than it's done, though. For me, this means even though I'm like, even now in the management team and we're looking at a big market and tens of thousands of customers, I'm sitting in customer calls every single day. And that's an effort that everyone needs to put in. So if anyone says I'm customer centric, well, then I'd also want to hear, okay, does this reflect in your daily operational work? Because you can't build great product from an ivory tower. You need to experience the complexity your customers, or in this case, my customer, have really in person.
Alexander Müller | DACH Country Director | Holvi [00:21:41]:
And so I guess the philosophy is really simple. We handle the numbers so the founders can focus on the business.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:21:50]:
Alex, I really appreciate this, this attitude going into customer conversations every day. I've realized if founders, if executives do that, it's much, much easier to keep customer centric. Because if you, if you are not in daily touch with the customer, it's very much easier to make unpopular decisions with your customers. Right.
Alexander Müller | DACH Country Director | Holvi [00:22:19]:
It's never easy to listen to a customer that's not happy with you. Because at the end of the day, when founders that build their own business, it's also a bit of a reflection of themselves. I mean, that's very natural and hopefully not a surprise. And then if someone says, hey, I'm really not happy with that, letting that go and not being disassociating from that so that you can really focus on making the product better, it's tough. I understand everyone that wants to take a day off of facing the trenches.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:22:54]:
Felix and Alex, can you both walk us through the ideal founder journey in 2020? 5 from company incorporation to sending out the first invoice. If everything works as you guys have envisioned it, right.
Felix Gerlach | Founder | Beglaubigt.de [00:23:12]:
I think it's very important to start first about like this status quo in the market. As I mentioned the. I think it took before like those major partnerships like three to four weeks actually to incorporate a company. You have to get sorted your documents, you have to get organized like a notary appointment. You have to find like a bank, a banking partner basically to deposit your share capital as well as going back to the notary again and doing like the orchestration for the official commercial register and again waiting for the official filing and bringing back the documents to the bank. It was a huge pain. It took up to like four to six weeks actually to get it done as a founder and this is actually not the main job of a founder. Right.
Felix Gerlach | Founder | Beglaubigt.de [00:24:12]:
The founder needs to focus on its business. Right. Especially in the inception in the first weeks and months you need to focus on your business, find users and not focusing your your daily thoughts and and work on like how to incorporate and what are now the next steps and zooming out now on like the perfect user journey for like a founder is actually you need. You should spend maximum like 1 or 2% of your work efforts on like the admin work on side of like how to incorporate. Right. And how does it work or should work is like you basically incorporate online, fully online. All paperwork is done online and it's sorted out within 24 hours. Right.
Felix Gerlach | Founder | Beglaubigt.de [00:25:06]:
And you can start focusing on your business and not the admin work. And behind all the processes should be done in terms of like having like a bank account registration for your company and all parts also that follows afterwards in terms of gewerber and Meldung tax ID registration for the transparency register. Like the job is not done there filing for the company. But the optimal user journey is that you can should be done within 24 hours and everything should be done within a few clicks.
Alexander Müller | DACH Country Director | Holvi [00:25:49]:
Yeah, I really agree with that. It needs to get to a point where it's completely digital really end to end. We know today there's just technically some parts that can't be fully digitized like the registration to the commercial registry. This needs to go by paper. The invoice is sent to the service address of service and that's in the regulators or that's in the regulator's hand to digitize this process. But when it comes to actually for example initiating the notary process, this is where we can really put this digital layer on top and make it much, much easier for founders and that's for example at Holby we wanted to have this. We wanted to help those founders to go to the notary in person or digitally. And for us that was why the decision came from the partner with Big CloudX because they have built this network with the notaries to make digital incorporations happen.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:26:50]:
We have around 50,000 listeners to this episode when it goes onto radio, podcasts and YouTube. So I was wondering, all those founders out there listening, what was your hardest step in incorporating your company? Drop us a comment Felix Y Combinator is famous for zero to one scaling. What was the hardest Y Combinator lesson you applied to the cloudic?
Felix Gerlach | Founder | Beglaubigt.de [00:27:21]:
DE yeah, I think one of the biggest lessons for us is like ruthless focus. Right? Of course in our DNA of open law is basically to bring install legal to the world and fixing the legal system. Right. But of course this is like a very bold and big vision and we need to strip it down and focus it down to actually the first core problems. And this is for us like Germany and actually fixing one big piece of it with the notary system and how incorporations and notarizations are done. And this is one of the hard lessons you learn by focusing on like one single market, focusing on your customers and trim it down to like very explicit use cases.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:28:27]:
Awesome. Guys, we will be back after short ad break where we'll unpack the strategy that changed everything for Hovey and the cloud victory and why this might finally end. Germany Startup Winter Guys, thanks for sticking with us. We are back from a little ad break and going straight to Alex. Alex, what growth methodology has worked best in bringing Hovey deeper into the German SMB market? I'm sure there is a lot of bank executives now listening with very, very open ears.
Alexander Müller | DACH Country Director | Holvi [00:29:06]:
Yeah, I think those that know Hovey, especially back in the time of the late 2010s, know of the scaling journey right at the time we had 250,000 customers or something like that in Germany. And back at the time the playbook was really pretty simple. You do a product, let's grow kind of motion where you have the digital account onboarding and the verifications went really pretty, pretty quick and then, then you really crack the performance marketing game. You need to be listed, you need to be top of, top of of the page stuff like that that work back at a time five, six years ago. If you try this today, maybe your success isn't as predetermined anymore because customer expectations and the sophistication has risen so much and also the offerings across the competitive lenses landscape and so our strategy isn't just about acquiring customers anymore. It's really about becoming a native part of the founder ecosystem. And one example of that is in B2B banking in Germany. That means you have to really commit, commit and commit.
Alexander Müller | DACH Country Director | Holvi [00:30:12]:
You need to become a German product, speak the German language, be regulated under the German regulator, the Bafin have German ibans and integrate with the tools that founders use here. One of these examples is you need to integrate with Dartev if you're an SMB or server desk and Lex Office. Those are all the local accounting softwares. If you don't do this anymore today, no accountant will come up and say hey, Holvi is a good product because you're also making their life a bit harder. And the founders will say, hey, I'm already used to those integrations in my, in, in my ecosystem. Why, why is that not here? And this is really what is for us the key point under committing to the local market. And that was on the accounting side. Nowadays we even go one step further and partner with legal tech like Felix and the Big Lavic because we think we also need to be there at the moment when a business is born.
Alexander Müller | DACH Country Director | Holvi [00:31:10]:
And we know today we have the tools and the distribution to make this technology accessible to a broader base of founders.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:31:20]:
We may add for everybody who's not from Germany, DAATF is like the central communications hub for all tax data. We don't go into detail. I just want to add here from a personal perspective that the user experience has quite a long way to go. But I was curious. Alex, I have one question. When you were answering mine, I was wondering you were talking about top of page Google Times. I personally feel without any confirming data that changing to AI search away from Google has a big importance for founders or potential founders. Would you confirm that from a gut feeling?
Alexander Müller | DACH Country Director | Holvi [00:32:07]:
There's a lot of moving pieces, but let me give you a few data pieces for you to make your own picture at the end. Our paid performance pipeline has plummeted in the last year, but we have doubled our pipeline. The way we acquire organically has really skyrocketed. On second hand, we don't yet see a lot of traffic coming from AI that also reconciles with global traffic in AI. There is some and it's growing and obviously we look at trends but it's not yet enough to really make a foundational impact. That being said, of course we are all over to optimize for AI to have the large language models understand that we are one of the notable players out there. It's about future proofing ourselves.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:33:05]:
Felix, how do you make strategic decisions in a space where regulation can change overnight?
Felix Gerlach | Founder | Beglaubigt.de [00:33:13]:
Yeah, very interesting question. I think it's also here important to understand that our users are not only like the founders and SMEs, but also like the notaries and regulatory bodies. So we want to find solutions with them and not against them. And by doing so, we have actually a chance to bring innovation to the market and foster actually faster business transactions. On the other side, of course, the incorporation is only like a tiny piece of the whole user journey of founders. As I mentioned, there are a couple of other components that are very, very interesting to us to solve for founders. As I mentioned, tax ID transparency, register accounting is coming next. Right? And all those pieces need to be solved in order to reduce the admin work for founders.
Felix Gerlach | Founder | Beglaubigt.de [00:34:17]:
So basically we are building along the user journey to not just set on one piece, the incorporation piece, because of course, like regulation can change overnight, but also on the. On the upside, basically. And we are ready for that. And working with notaries and not against them.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:34:38]:
Actually, I do understand taking their perspective, they do have a very boring job, mostly crafting contracts. Then sitting there, you have to read the whole contract, then you confirm everybody is there, everybody has the passwords with them, and then you sign it, you put your official seal it, and that's it. So I do understand they also have an interest in making this faster and more technological than it is right now in still many offices out there. Alex, can you share a customer story where all these tools made the difference between a founder surviving or maybe even shutting down?
Alexander Müller | DACH Country Director | Holvi [00:35:28]:
Yeah. I met this founder entrepreneur last year at a networking event with the House of Finance and Tech in Berlin. And he told me his entrepreneurial journey, and it dates back to the beginnings of COVID He was starting to build up an education platform to help students find a job. And then when Covid came around, he was in the process of setting up his bank account. And from one day to the other, all of this became exponentially harder. Going to the branch, filling out the forms, and this in a time where you go through all the rocky time where you set up the business in the first place. And this is where hallway came in. And with the digital account opening, getting the IBAN just within the day, and being able to issue your First Apple Pay MasterCard, that really made all the difference for him.
Alexander Müller | DACH Country Director | Holvi [00:36:31]:
And listening to these stories, that also makes your own work feel quite meaningful.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:36:37]:
I have a question for both of you, and I do believe I already know the answer. Scaling challenges. What is harder on the one hand to have founders convinced to adopt digital or convincing the regulators to really allow that?
Alexander Müller | DACH Country Director | Holvi [00:36:56]:
I mean, I'm picking up right on this with this story, right? The founder was screaming for a digital tool. I think the balance isn't even close. Convincing regulators is infinitely harder to adopt digital tools than founders. Regulators at these points are still whispering about the risks. And the bottleneck really isn't about adoption, it's about permission.
Felix Gerlach | Founder | Beglaubigt.de [00:37:23]:
Yeah, 100% agree with that. The biggest challenge is actually that regulators understand the power of innovation in the startup ecosystem. Right? And startups shouldn't be treated as just like an afterthought, but more like an infrastructure piece of our economy. And this starts with like the incorporation and digital notarization per se. But yeah, of course it takes time, especially in Germany. We are a huge country, more than 83 million people are living there. So it's not that easy to change the law overnight, even though we already know that the system is fully outdated. I think we need bold visionaries that actually pinpoint the problems.
Felix Gerlach | Founder | Beglaubigt.de [00:38:19]:
We need strong partners. And yeah, I think there is a world and a scenario in the next five years where we see that also regulators are open to change and foster innovation.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:38:35]:
I like the point that you're making here because we're somewhere 83, 85 million people here living in Germany. And the thing is you then can calculate that whatever you do in changes to regulation, make it more digital and so on and so forth. You always need thousands of state employees to pull along to understand and to adopt this as well. That's pretty tough to call. Alex has been at Speed Invest, built Friday Finance and now manages Holvi. We will talk about his tactical playbook in the founders world. Join down here in the show notes. So Felix, in five years will Germany finally have a fully digital incorporation or are we still stuck with the fax machines? By the way, do you guys have a fax machine at becloudmcda?
Felix Gerlach | Founder | Beglaubigt.de [00:39:31]:
Luckily not. We are digital first. So the good news are that we are already supporting digital notarizations in corporations. Right, but this is only like a tiny fraction as there are like other requirements tied to that. Right. Our founders need to have like the eid and it's not common user only like a very tiny friction of our founders actually have those EIDs and hopefully we see more adoption over the next five years that this move up the needle and the full incorporation process can be done for the prod mass. And of course like fax machines, I think the next Generation hopefully only remembers like the little icon and the emojis and not anymore like the machine per se.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:40:36]:
Actually I have in mind my oldest son is now 6 years old at one day one time I'll put him in front of a dial for. Let's see how that works. Alex, what in this. Don't get me wrong, I know predictions are always difficult, especially concerning the future. But what industry predictions do you have for SME banking for all of Europe? Like looking down the road for 2030.
Alexander Müller | DACH Country Director | Holvi [00:41:04]:
Yeah. Let me answer this question in two parts. First, I want to piggyback on something that Felix said with the adoption of eids, which is a necessity for at this point verifying your identity or even go to a digital notary. One of the prediction will be that this the proportion of people having EAD will be nearly conclusive across the German population. That's also a bit of an optimism speaking here. When we introduced EAD or online ad online personal in German a year ago, the average adoption was at 9%. I'm tracking every week how many Holvi customers verify themselves with eid. Now we are already stable at a stable rate above 30%.
Alexander Müller | DACH Country Director | Holvi [00:41:54]:
So this is something that is increasing more and more. And having this online identity, at least for natural persons, opens so many opportunities for digitization down the line like incorporating your company. So this is, this is the first prediction. Adoption of EID will, will continue to rise. And I think that's a very, very good thing. And I think on the business banking side, I think by 2030 the business bank will withdraw more and more to the background. It will be all about AI co pilots to CFOs that support the human in the loop or the CFO to do the work better. The banking part is obviously the regulated part, but it will be the transactions that are running in the background where value is built on top of it.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:42:47]:
You guys have both seen a lot. So I was wondering what's a contrarian view you hold about the term startup ecosystem that most people would disagree with?
Felix Gerlach | Founder | Beglaubigt.de [00:42:59]:
Yeah, maybe I do start. I think that or like my contrarian view is that the ecosystem, startup ecosystem is not startup friendly in Germany. And this is of course why this partnership exists between Holvi and Berglawbigt to move actually the needle and enable faster in corporations so that founders can focus back on their business again. What we are seeing is that the smartest builders, they are moving abroad. They are not anymore incorporating in Germany. Why is that? It's just distracting and very hard to raise capital here in Germany and Something massively needs to change in order to attract back the talent. Currently we are losing those talents. And this contrarian view, of course I hope more and more people see the need, more and more partners see the need in order to enable back like the small pieces of our economy.
Felix Gerlach | Founder | Beglaubigt.de [00:44:10]:
And this is the startup ecosystem.
Alexander Müller | DACH Country Director | Holvi [00:44:13]:
Yeah, maybe I have a bit of a contrarian view to what Felix just said. I also see of course what you're saying and the common, I guess the common view is that the German bureaucracy kill started but I'm a helpless optimist so I'm also trying to find the good in it. And at the end of the day the founders who built here, who found here, who embrace that, they are also very, very battle tested from day one. And I think they are well set up to build fundamentally solid, solid businesses. And right now in the media, N8N the AI automation platform is all over the news. And their founder, Jan, first name I remember, I think he's an outspoken proponent of keeping his legal setups and legal companies in Germany and something that I respect quite a bit. And if there's an opportunity to help more founders do that and simplify it, then I want to double down on any of these opportunities. And I think that's also where Felix and Ayden then I back in agreement.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:45:22]:
From our audience. I would like to know if you could fix one bureaucratic hurdle tomorrow, which would it be? Let us know. And I would bet somewhere taxes are there on top. Felix, we coming close to the end. What advice do you give first time founders facing Germany's red tape today?
Felix Gerlach | Founder | Beglaubigt.de [00:45:50]:
Very good question. I think founders should focus on their business first and not on the admin work. Which means like first time founders should delegate and outsource as much as possible on the admin side in order to focus on like their momentum on the first month, right. A founder has like maximum like 12 months of one rate of starting a business and this is the most precious time for founders. And this is why we are here with Bucklawig, Tolvi and co in order to accelerate the process for incorporations, for banking, for accounting and so on in order that our founders can focus on their business.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:46:41]:
Alex, what's the boldest prediction you'd make about the future of entrepreneurship in all of Europe? We already heard your vision for SME backing 2030 digital banking. Let us share your vision for the future of entrepreneurship in all of Europe.
Alexander Müller | DACH Country Director | Holvi [00:46:59]:
Yeah, I'm not really one to make predictions, but I certainly do have hopes for the future and I think where Europe is really uniquely placed is to become this global center for purpose driven entrepreneurship. I was really inspired by Felix just a few minutes earlier when he said first we bootstrapped. We tried to find our solid business model, something that we really believe in scaling up and then we look for external investors to scale this up. I think this is the very right thing to do and it's this type of quality of a business that I see you're well positioned to produce. But in order to do this, I also think we really need to focus on standardizing legal company setups across the EU and right nowadays the EU Inc. EU Incorporated initiative going on the 28th regime that they call and everyone who's heard of that, who hasn't put in their votes and their feedback, I think this is something that we really can drive together as founders, operators, as the startup industry or tech industry to make this vision come true.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:48:11]:
For both of you. I do have one of our usual closing questions. Are you currently looking for talented people?
Felix Gerlach | Founder | Beglaubigt.de [00:48:21]:
So maybe I start of course always as like a founder. This is like one of your talent, top priorities to bring in top talent and the most talented people around you that share the same vision as you have. So clear answer. Yes. Yes.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:48:40]:
We link Baktaobigde down here in the show notes and if Alex also agrees, we also have the link to their career website down here in the show notes. Am I right to assume that Alex?
Alexander Müller | DACH Country Director | Holvi [00:48:53]:
Absolutely. We are hiring in Berlin, Helsinki and Vienna. It's a company with a really strong and comfortable Nordic culture. And anyone can obviously also contact me on LinkedIn to inquire for more job opportunities.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:49:13]:
And also I've heard the quality of life in Helsinki is pretty good. But also you should bring warm socks for the winter.
Alexander Müller | DACH Country Director | Holvi [00:49:22]:
That is true. Everyone knows Slush as this global conference and Slush, I think especially in autumn and early winter is a bit of a way of life. So yes, bring warm socks and sturdy shoes.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:49:35]:
Yeah. And Felix, I was wondering, are you open to talk to new investors?
Felix Gerlach | Founder | Beglaubigt.de [00:49:41]:
Yeah. So we are in a lucky position that we don't need to raise external money. Again like core focus for us is to build like a healthy, healthy business and continue with that. So yeah, currently no need for new investors.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:49:58]:
Guys, thank you very much. Was such a pleasure having you here. For the people that will be months between the publication of this one and the Entrepreneur's Vault, but nonetheless we are now dropping off to record the entrepreneurs vault link down here in the show notes. Guys, was a pleasure to having you. Thank you.
Alexander Müller | DACH Country Director | Holvi [00:50:18]:
My pleasure. Thanks so much.
Felix Gerlach | Founder | Beglaubigt.de [00:50:20]:
Sir, thanks so much for the interview.
Jörn 'Joe' Menninger | Founder and Editor in Chief | Startuprad.io [00:50:27]:
That's all folks. Find more news streams, events and interviews@www.startuprad.IO. remember, sharing is caring.
Felix Gerlach | Founder | Beglaubigt.de [00:50:44]:
Sat.
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