Frustrated by lack of venture capital in Canada, startup moves south

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The Globe and Mail | Jeff Kroeker | Jan 31, 2014

TBenchHE CHALLENGE

When Vancouver-based Jordan Menashy and Ian Crosby launched tech startup Bench, it was to revolutionize bookkeeping for small businesses by offering cloud-based accounting services accompanied by live bookkeepers.

Their vision was to break into the market in North America and then internationally. But as they started looking for investors, the pair soon hit a wall in the Canadian venture capital market.

“In Canada, there’s ultimately a lack of venture capital compared to the U.S.,” says Mr. Menashy. “The amount you can raise and your valuation tends to be much lower.”

Because of this, the founders were advised to reduce the scope of their vision.

Their highest investment offer by the end of 2011 was $500,000, a figure too low to fund their long-term goals.

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THE BACKGROUND

Both graduates of the UBC Sauder School of Business, Jordan Menashy and Ian Crosby co-founded Bench in early 2011.

“After Sauder, Ian worked for Bain & Company as a strategy consultant, and I did product management for Blackberry,” says Mr. Menashy.

When the friends caught up, they found themselves discussing the inefficiencies of manual bookkeeping. Eventually, they decided to pool their accounting and tech skills to automate the process.

“We realized that only large organizations could afford the high-end technologies that automate bookkeeping processes and that there was a huge opportunity to bring these efficiencies to small businesses by delivering it to them through a bookkeeping service online,” explains Mr. Menashy.

By early 2012, Bench had built a core team and set out on its fundraising journey. But without sufficient venture capital it seemed their vision would be severely compromised.

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