Khosla Ventures has led a $10 million seed round in Synthetic, the new AI startup from serial entrepreneur Ian Crosby.
This investment comes despite Crosby's previous venture, Bench Accounting, shutting down amid financial woes just two years ago.
A Founder with a Controversial Track Record
Crosby founded Bench in 2012 as an automated bookkeeping service for small businesses, which grew rapidly but began bleeding cash by 2021.
The board fired him that year after he rejected a $250 million acquisition offer from Brex, citing strategic disagreements and leadership style issues.
New management failed to stabilize Bench, leading to its abrupt closure in late 2024 and a fire-sale acquisition, stranding thousands of clients without their financial records.
Undeterred, Crosby briefly joined Shopify, then launched Teal, another accounting tool quickly acquired by Mercury.
Synthetic's Bold AI Ambition
Synthetic aims to create a fully autonomous AI bookkeeper that handles complex accrual-based financials without any human input, targeting only AI and software startups initially.
Still in the design phase, the prototype works for narrow use cases, but Crosby insists on perfection, likening it to a self-driving car that won't launch until it handles any road.
Khosla Ventures partner Jon Chu sees Crosby's past as a growth opportunity, drawing parallels to founders like Parker Conrad who bounced back stronger after oustings.
This bet highlights a VC trend of funding controversial founders, betting their experience outweighs past failures in a maturing AI landscape.
Success could slash accounting costs for tech startups by 90%, freeing founders to focus on growth amid rising compliance demands.
However, fully autonomous accrual accounting remains elusive due to AI's error-proneness in nuanced financial rules, posing regulatory risks.
For everyday small business owners, Synthetic represents hope for affordable, error-free bookkeeping, potentially disrupting a $100 billion industry dominated by humans.
Andrew Lee
