How 2 high school teens raised a $500K seed round for their API startup (yes, it’s AI)
Reading Time: 4 minutesJust a few weeks ago, 18-year-old best friends Christopher Fitzgerald and Nicholas Van Landschoot graduated from high school.
While most teens their age would be living it up in their last summer before college or the adult jobs that await them, Fitzgerald and Van Landschoot are hunkered down in a VC office in Boulder, Colorado.
They’re spending the summer working on their startup APIGen after they raised a $500,000 pre-seed investment from Varana Capital. Fitzgerald will head off to Penn State in the fall and Van Landschoot will move near the university but is putting his college plans on hold to be a full-time startup founder.
The money was raised while they were still in high school after a prototype for their idea garnered a lot of interest among the large Boulder community of AI enthusiasts.
APIGen is working on a platform that will build custom APIs from natural language prompts. It will be able to, for instance, allow an e-commerce business to simply ask for an API that connects its web front end to its database, and the platform will deliver it.
By API, the founders don’t just mean a standard ‘application programming interface’ that allows applications to exchange data or perform some other simple workflow function. They want APIGen to create complex custom APIs that can do multiple or serial tasks.
In addition to web apps and databases, Fitzgerald says IoT devices are one of his startup’s target areas. He offers the example of a customer asking for an API that instructs a drone to fly around the perimeter of an area, capture images and allow another application to interface with the result. Another example is an API that uses face recognition for building security. Once a database of photos of verified employee faces is created, the user could ask APIGen for an API that lets a smartlock’s door camera check the face of everyone who arrives against that database before unlocking the door.
‘APIs at the end of the day, can be as simple or as complex as you make them to be,’ Fitzgerald said. ‘They can range from just new connectors that take one entry of data, one row of data from a table of a database, to entire back ends. And that’s really what we’re trying to target there, for entire web apps for entire IoT applications.’
The teens met on their school’s debate team and bonded over their love of coding. Their first project together was a chatbot that would allow people to chat with data. They soon realized that it wasn’t an original idea. Still, while building that app, they learned that their tech relied on APIs and that ‘making APIs was kind of a pain,’ Fitzgerald said. ‘They were hard to design.’
So they focused on that. Once they crafted an alpha version of their idea, a demo-level tool, they began to show it around to the programmers in their circle to get feedback. They knew people in their local tech industry. Van Landschoot’s dad works in cybersecurity IT, and Fitzgerald landed a summer internship as a programmer at SoftBank through a connection with a friend’s dad.
And then they started sending cold messages to VCs on LinkedIn and to anyone else they thought might respond.
‘We asked people to destroy this pitch deck,’ Fitzgerald said.
A VC is so impressed, he offers to invest
With Fitzgerald dressed in his best sweater and Van Landschoot in a debate-team-style collared shirt, they leaned into their debate training and pitched their company, their vision, the potential market and themselves.
Rather than feedback on the pitch, ‘At the end of the meeting, they mentioned that they were actually interested,’ Fitzgerald said of the Varana partners. Broenniman asked the teens how much money they were looking for.
Varana did its diligence looking into the potential of the API market, which has created multibillion dollars’ worth of successes (MuleSoft bought by Salesforce, Apigee bought by Google, to name just two). And it looked at the founders’ backgrounds: Fitzgerald graduated as valedictorian of a top-ranked high school in Boulder, which has a highly ranked public education system; Van Landschoot was such a gifted programmer that he had been tutoring college computer science students since he was 14.
The Varana partners scheduled a second meeting for the founders to demo their tech to make sure the teens weren’t just ‘good at talking but not delivering and doing stuff,’ as Van Landschoot described.
The teens were nervous, they confessed, but the demo went well and the VC offered a term sheet: $250,000 of pre-seed money with another $250,000 in a SAFE, which is a note that converts to equity if the startup raises later. The VC also provided office space.
While they were pitching to the VCs, Fitzgerald learned about Boulder’s active AI Meetup that has 1,400 members, organized by a dad of one of Fitzgerald’s tennis team teammates. Boulder has a famously close and cozy startup community and, along with nearby Denver, hosts office outposts for Amazon, IBM, Google, Microsoft and many others.
The teens joined the group and demoed their product, and the local AI enthusiasts rallied behind them and their idea.
APIGen is obviously very early. And it isn’t the only one working on automating APIs. Giant tech companies like Salesforce’s MuleSoft and established startups like RapidAPI are already working on this market, as are most of the cloud giants.
APIGen also doesn’t yet have its minimum viable product built, though it’s getting closer with a beta version that will be released this month. ‘We’ve already had some interest from businesses, but obviously we’re still pre-MVP at this stage, and just cranking, trying to get it out as soon as possible,’ Fitzgerald said.
Still, Broenniman, who takes board seats with investments, is in for the ride. He points to how the young founders have already built a community of eager supporters.
‘APIGen may be the vehicle into which we’re making an investment, but we’re creating partnership with Christopher and Nicholas,’ he said. ‘This is a $7 billion-plus market. They are entering with some elements of competition there but are carving out their own space. The opportunity for return from our standpoint is insane.’
Ref: techcrunch
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