Vancouver-based bookkeeping service Bench Accounting has abruptly shut down, leaving hundreds of employees facing job loss and thousands of clients scrambling for new bookkeeping solutions just days before the year's end. The company, which touted itself as North America’s largest bookkeeping service for small businesses, posted a "notice of closure" on its website stating, "as of December 27, 2024, the Bench platform will no longer be accessible.”
Bench had previously disclosed it had over 600 employees and had secured significant investment funding amounting to $113 million. This shock closure has drawn widespread attention and concern for both employees and clients, compelling them to find alternative services. The firm, which started its operations as 10sheet Inc. in the U.S. before relocating and rebranding to Bench in Vancouver, has left its former clientele feeling stranded.
Loading up on the details, Bench’s website expressed regret for the abrupt shutdown, acknowledging the disruption its closure may cause. They assured customers of their commitment to assist during this transition, directing them to instructions on accessing their data by December 30, with the content available for download until March 2025. "We know this news is abrupt and may cause disruption, so we’re committed to helping Bench customers navigate through the transition," the statement read, emphasizing the importance of securing old financial documents.
Ian Crosby, the erstwhile CEO and co-founder of Bench, voiced his sadness over the sudden closing on social media. He reflected on the factors leading to this moment, divulging his ouster from the company three years ago. "I hope the story of Bench goes on to become a warning for VCs (venture capitalists) who think they can ‘upgrade’ a company by replacing the founder. It never works," Crosby remarked. His words resonate deeply as he continues to attribute the company's failure to the decisions made by the board members who opted for change over collaboration.
Crosby discussed his tumultuous relationship with the company's board members, who, he claimed, had pursued what he considered misguided strategies for the company's direction. "Rather than continuing to fight with me, they opted to just replace me, thinking they could run the company themselves. I was totally convinced their approach would destroy the company. I opted to resign rather than fight," he recounted.
Kaz Nejatian, COO of Bench’s major investor Shopify, concurred with Crosby's sentiments, stating on X, "Bad investors destroyed a great Canadian company by replacing the founder with so-called professionals." His words reflect widespread criticism concerning the state of venture capital and the impact of poor leadership choices on promising startups.
Meanwhile, former clients of Bench expressed their frustration and disappointment on social media. Justin Metros, co-founder and CTO of Radiator, recounted his shock after discovering the closure through TechCrunch, noting, "I’ve never seen anyone just shut down like this. That’s crazy." Other clients voiced their discontent, with one lamenting, "as a customer, I’m pissed," particularly after migrating their accounts from QuickBooks to Bench.
Rival bookkeeping companies wasted no time in reaching out to bench’s former customers, offering alternatives to help ease the transition. Among these were Acuity and Better Bookkeeping, who leveraged social media to pitch their services, drawing attention to the gap Bench's sudden exit created.
The disruption caused by Bench’s closure extends beyond employees and clients. The situation raises questions about the stability of tech startups when venture capitalists intervene. Critics argue the events at Bench may serve as cautionary tales for other startups about maintaining founder leadership and the unique vision each brings.
Looking to the future, the closure stands as a stark reminder of the volatile nature of the startup ecosystem, where unexpected shifts can lead to if not handled delicately, devastating consequences for all stakeholders involved. Clients have been advised to file for tax extensions to allow extra time to secure new bookkeeping solutions, highlighting the urgency and the precarious situation many now find themselves.
Bench's support for its previous clients includes firm guidance on how and when to retrieve financial documents, with efforts to assist during this tumultuous transition. Clients have been assured they will have access to their year-end financials and uploaded documents such as receipts and bank statements, still echo the effects of this abrupt end to services.
Both the current circumstances for laid-off employees and the unforeseen disruption faced by clients point to larger themes within the tech and service industries. The lessons learned from Bench’s abrupt closure may prompt necessary conversations around the relationship dynamics between founders, board members, and the investors steering the direction of startups.
Returning to Ian Crosby’s insights, the former CEO's reflections on the importance of founder-led vision versus board-led strategy remain pertinent. While the closure of Bench Accounting is mourned not just by those directly affected but also by those observing the tech industry’s evolution, it might serve as the groundwork for important discussions on company governance and the role of founders versus investors moving forward. The impact of their decisions continues to echo, shaping the future for similar startups.
