Khosla Ventures invests $10 million in Ian Crosby, the founder of collapsed accounting startup Bench. This bold bet raises questions about investor motives and the potential for rebuilding. We explore the deal details and its impact on the fintech sector.
In an unexpected move, Khosla Ventures has announced a $10 million investment in Ian Crosby, the former founder of Bench, a startup that provided accounting services for small businesses. Bench suddenly collapsed last year, leaving thousands of clients in disarray. This daring wager by one of Silicon Valley's premier venture capital firms raises questions about investor motivations and their ability to see opportunity in failure. The deal underscores a culture that sometimes rewards resilience over pristine track records, especially in the high-stakes world of fintech.
Ian Crosby is a Canadian entrepreneur who founded Bench in 2012, aiming to simplify accounting for small businesses using artificial intelligence. The company grew rapidly, raising over $100 million from prominent investors like Bain Capital Ventures and Altos Ventures. However, in 2025, Bench imploded due to cash flow problems and mismanagement, leading to hundreds of layoffs and leaving customers without services.
Now, Crosby plans to launch a new fintech venture, and Khosla Ventures has decided to back him with this substantial sum. Details of the new project remain under wraps, but sources indicate it will focus on leveraging AI to improve financial services for small businesses. The investment is a bet on Crosby's vision and lessons learned from his previous failure.
This investment highlights the entrepreneurship culture in Silicon Valley, where failure is often viewed as valuable experience. Some analysts believe Khosla Ventures sees unique talent in Crosby, especially after he learned from past mistakes. Critics, however, argue this bet is risky, given Bench's sudden and costly collapse.
The deal comes amid intense competition in the fintech sector, with new AI-driven startups emerging. If Crosby succeeds, he could become a model for previously failed entrepreneurs. If he fails again, it would underscore the difficulty of rebuilding after a major implosion. This investment may also encourage other VCs to back founders with failed startups, potentially reshaping investment norms.
Bench was a startup offering AI-powered accounting services for small businesses. It raised over $100 million from investors like Bain Capital Ventures and Altos Ventures. The company collapsed in 2025 due to financial and management issues.
Khosla Ventures believes past failure can be a valuable source of learning. Investors think Ian Crosby has a new vision and the ability to avoid previous mistakes, making him a strong candidate for a successful future venture.
Details of the new project have not been disclosed, but sources suggest it will focus on using artificial intelligence to improve financial services for small businesses, a similar domain to Bench but with a different approach.
Yes, this investment is considered a significant risk given Crosby's previous company's collapse. However, Khosla Ventures is known for bold bets on talented entrepreneurs, even after failure. Success depends on Crosby's ability to execute his new vision.
This deal may encourage other investors to support previously failed entrepreneurs, potentially shifting investment culture in Silicon Valley. It could also intensify competition in fintech, especially in accounting and financial services for small businesses.
Khosla Ventures' $10 million investment in Ian Crosby represents a bold bet on the possibility of rebuilding after failure. While some view this move as risky, others see it as a chance for a talented entrepreneur to correct past mistakes. The future of this new venture will be a real test of entrepreneurship culture in Silicon Valley and investors' ability to see opportunities in failure.
Source: TechCrunch AI | Analysis & Editorial: AI Tools Oasis
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