Khosla Bets $10M on Ian Crosby After Bench Collapse

Khosla Ventures is backing founder Ian Crosby with a $10 million seed round for his new autonomous AI bookkeeping startup, Synthetic, despite the high-profile collapse of his previous company, Bench Accounting, in 2024.

The Audacious Vision Behind Synthetic

Crosby’s new venture, Synthetic, is taking aim at one of the most tedious aspects of business administration: financial record-keeping. The startup’s ultimate goal is to build a completely autonomous AI bookkeeper capable of generating precise, accrual-based financials without any human intervention. While the product is currently in its design phase—and Crosby himself acknowledges that current technology might not yet fully support his vision—the concept has secured major financial backing. The $10 million seed round was led by Khosla Ventures, with additional participation from Basis Set Ventures and Shopify CEO Tobias Lütke.

Why Khosla Ventures Embraces the Controversy

In an industry where investors frequently shy away from founders associated with recent business failures, Khosla Ventures partner Jon Chu is taking a contrarian approach. Chu explained that he often leans into controversial situations rather than running from them.

According to Chu, public narratives during corporate crises are frequently driven by groupthink rather than objective facts. He pointed to Parker Conrad’s highly publicized departure from Zenefits in 2016 as a prime example. Despite the intense criticism Conrad faced at the time, he went on to build Rippling, an HR and payroll giant now valued at nearly $17 billion. Chu expressed strong confidence in Crosby’s potential for professional growth following his past setbacks.

Inside the Fall of Bench Accounting

While Bench Accounting ultimately shut down, Crosby maintains that he was not the driver of its insolvency. Crosby was fired by Bench’s board in 2021. This decision came just three months after he rejected a $250 million acquisition offer from fintech unicorn Brex. At the time, the board disagreed with Crosby’s strategic vision as the company experienced high cash burn, and reports indicated his executive team was frustrated with his direct leadership style.

Chu acknowledged that Crosby took a massive swing and made mistakes that led to a difficult outcome. Following Crosby’s exit, Bench’s subsequent management was unable to stabilize the business, eventually leading to its collapse.

A Track Record of Quick Recovery

Crosby’s career did not stall after his departure from Bench. He joined Shopify and later founded Teal, another startup focused on accounting infrastructure, which was acquired by Mercury just 18 months after its launch. During the due diligence process for Synthetic, Chu contacted multiple executives who worked alongside Crosby during these post-Bench roles, receiving overwhelmingly positive feedback about his leadership and capabilities. Chu believes these subsequent roles provided Crosby with the necessary environment to refine his management style and learn from his previous errors.

The Road to Fully Autonomous AI Bookkeeping

Unlike existing digital accounting platforms like Xero, which still rely heavily on human professionals to manage data entry and reconciliations, Synthetic is taking an uncompromising approach to automation.

Crosby stated that the company will not release a product unless it is entirely autonomous, framing the venture as an “all-or-nothing” bet. Initially, Synthetic plans to cater exclusively to software and AI startups. However, Crosby does not downplay the technical hurdles ahead, admitting that current AI models still make notable errors when handling complex bookkeeping tasks.

To describe the current state of the product, Crosby compared it to autonomous driving technology, noting that while their prototype works flawlessly in a controlled, narrow environment, scaling it to handle the unpredictable variables of the broader market remains an unproven challenge. Despite these technical limitations, the $10 million in fresh capital gives Synthetic a comfortable runway, allowing the company to wait for foundational AI models to mature and achieve the accuracy required for complex financial calculations.