After graduating from the Gymnasium in Rothenburg ob der Tauber, he entered the Royal Bavarian Army at Munich as a Fahnenjunker (officer cadet) in 1906.

After the end of the war, Kraußer took part in the suppression of the Munich Soviet Republic in 1919 as a member of the Freikorps unit headed by fellow-Bavarian Franz Ritter von Epp.

[2] In 1922, in Nuremberg, Kraußer joined the Wehrverband Reichsflagge (Imperial Flag Combat League), a paramilitary organization with a regional focus in Franconia.

When the league split in October 1923, the more militant members under Ernst Röhm and Joseph Seydel [de] formed the Bund Reichskriegsflagge (Imperial War Flag Federation).

In connection with his Frontbann activities, Krausser was arrested in September 1924 and charged with violating the Law for the Protection of the Republic, but was released after just six weeks in custody.

Because of these memberships, Kraußer at this time did not obtain admission to the Nazi Party, which did not permit members to belong to other political associations.

When Ernst Röhm became the SA-Stabschef in 1931, he set about recruiting other former Bavarian military officers that he knew and trusted for top level positions, and Kraußer was one such selection.

[9] After the Nazi seizure of power, Kraußer served from 1 May to 31 December 1933 as the SA Special Representative to the commander of the auxiliary security police in Bavaria.

[10] Alarmed by the growing size and power of the SA, and seeking to alleviate similar concerns on the part of the German military high command, Hitler, now the Reich Chancellor, decided to launch a purge against Röhm and his inner circle in an operation that became known as the Night of the Long Knives.

When Kraußer arrived in Munich that morning on the overnight train from Berlin, he was arrested by two plainclothes policemen and taken to Stadelheim Prison.