Khosla Ventures is betting $10M on Ian Crosby, whose last startup, Bench, imploded

Ian Crosby, known for his previous venture Bench Accounting, which faced a dramatic shutdown in 2024, is embarking on a new entrepreneurial journey. His latest startup, Synthetic, is focused on creating an autonomous artificial intelligence system capable of handling bookkeeping tasks without human intervention. Despite being in the early design stages and acknowledging the technological challenges ahead, Crosby has successfully secured $10 million in Seed funding, led by Khosla Ventures, alongside contributions from Basis Set Ventures and Shopify's CEO, Tobias Lütke. Typically, investors might hesitate to back a founder with a troubled past like Crosby, especially following the failure of his previous business. However, Jon Chu, a partner at Khosla, embraces such challenges. "I tend to run towards controversy a little bit," he remarked, highlighting that narratives shaped by groupthink can often overlook the truth. He referenced Parker Conrad's initial struggles with Zenefits, which eventually led to the successful launch of Rippling, now valued at nearly $17 billion. Chu believes in the potential for growth, which explains his support for Crosby and Synthetic. Crosby insists that he was not solely responsible for Bench's demise, noting that he was dismissed by the board in 2021, shortly after he rejected a lucrative acquisition offer. Tensions regarding the company's strategic direction reportedly contributed to his ousting, particularly as the business was struggling financially. "He took a big swing, made a few mistakes. That didn’t go well," Chu commented on Crosby's previous experience. After his time at Bench, Crosby joined Shopify and launched Teal, another accounting startup that was acquired by Mercury just 18 months later. In his due diligence for Synthetic, Chu spoke with various executives who had worked with Crosby post-Bench, all of whom praised his abilities. Crosby envisions a fully AI-powered bookkeeping solution, differentiating his approach from many current accounting startups that still rely on human accountants. "We're not going to release anything that's not fully autonomous," he stated firmly. Synthetic aims to cater specifically to AI and software startups, although Crosby acknowledges the current limitations of AI in bookkeeping accuracy. He likened the development of their prototype to a self-driving car that can navigate only specific routes, emphasizing the need for more comprehensive testing before broad deployment. Despite the uncertainties, Crosby feels confident in his ability to navigate the evolving landscape of AI technology. "I've raised years of cash, so we can just wait it out," he concluded, indicating a patient approach to the challenges ahead.