Fueled by risk and high energy, Silicon Valley is not the typical CPA launch pad. But Kruze Consulting founder Vanessa Kruze has more in common with the pioneers of the startup world than her license would suggest, making her an ideal accountant to service their needs.
Kruze Consulting founder & CEO Vanessa Kruze and COO Scott Orn
Before she took the leap to establish her Bay Area firm, Kruze began her career with the Big Four at Deloitte Tax. “It was a great place to start my career, but a little bit boring — classic cubicle life,” she explained. “It was a great training ground, but I didn’t feel like it was my long-term path. I got my CPA while there, which was a really good outcome.”
She subsequently worked as a controller at a startup, another learning experience and “hyper-growth training ground,” but the repetition and comfort incited more restlessness.
At age 25, Kruze was “hungry” enough in her career to pursue her MBA, but a more literal hunger and need to pay the bills prompted her to also start doing tax returns for customers she found on Craigslist. The little bookkeeping experience she had at the time didn’t deter her, and half of her initial six customers were companies from the powerful startup incubator Y Combinator, an accelerator that has funded tech giants like Dropbox and Airbnb.
Not only could Kruze get in on the ground floor of the next hot company, her self-described “trial by fire” often paralleled the growth trajectory of these young startups. Unlike many of them, however, she didn’t have a concrete business or growth plan for what eventually became Kruze Consulting in 2012.
Nevertheless, at the end of that first year, Kruze had expanded her business to 30 clients. “They were all great clients, but how was I going to manage going to school and servicing all these great companies?” she recalled. “It dawned on me, I don’t need to finish my MBA, I’ve found my life’s path. There’s a demand for it, and people like working for me. I halted my MBA to focus on Kruze Consulting full-time. Now we’re 17 employees strong.”
That includes Kruze’s husband and the firm’s chief operating officer, Scott Orn, who joined two years ago and, as a former venture capital partner, ranks Kruze’s leadership qualities as among the best he’s seen in Silicon Valley — spousal pride notwithstanding.
“She’s an incredibly impressive entrepreneur,” Orn enthused. “I’d put her up against any entrepreneur I used to fund and give money to.”
As Kruze Consulting expanded its staff, it also grew its clientele to more than 150 startups in San Francisco, Santa Monica, Calif., and New York that are all in one of the three earliest rounds of financing (Series A, B and C). The firm offers three service lines: accounting, bookkeeping and monthly close; tax compliance; and consulting. Consulting services include CFO services, financial modeling, valuation and best practices advisement, but, according to Orn, regardless of the client or particular service, the firm’s central role is often that of stress reliever.
“All startups walk a similar road, regardless of the technology they’re developing,” Orn explained. “They come to us in different forms of chaos in their financials or compliance. A lot of what we do is make sure they have a trusted partner to work with and we take care of that tax stress, that compliance stress.”
That role is valuable enough to have spawned a strong referral network for Kruze Consulting. When Kruze began practicing, most of her initial growth was from these young companies recommending her to their peers and fellow incubator-mates.
“Even when I wasn’t able to fill my schedule completely, I did a lot of pro bono work for my original six clients to get the experience and training,” Kruze shared. “The move
really paid dividends — the clients were super-loyal and super-eager to refer me to new companies. To grow a business and start fresh, I would say, do pro bono work and get the experience you need to grow.”
Growth doesn’t always mean more clients, however, and can require scaling back to provide valuable, specialized service.
“I learned at the point of about 30 clients that it didn’t make sense to service all different types of clients — startups, small businesses and full practitioners. I found that if I just focused on one specific niche, one I enjoyed most, I could provide the most value. After we got to about 30 clients, in the first year, there was enough of a demand solely in the startup realm to laser focus on start-up companies and provide them with the most efficient processes and service available.”
Even prospects that were a perfect fit had to be declined when Kruze Consulting couldn’t accommodate them. “At times, we’re turning great new potential clients away in favor of maintaining our existing service level,” Kruze said. “The ones we turn away come back, asking, ‘Are you at capacity now?’ and we say, ‘We’re ready for you.’”
The needs of clients can range wildly — recent Kruze Consulting engagements include a hotel app company with questions about transient and occupancy tax; a streaming content app provider that needed debt financing guidance; and two companies going through the acquisition process.
All clients and prospects have access to a robust “Startup Q&A” page on the Kruze Consulting Web site.
“Instead of reactive, we’re more proactive,” Kruze said. “We’ve shared knowledge in an open-source way, even to those that are not our clients. We’re transparent and help, serve, and, in many ways, change what has been staid in the startup accounting industry. We’re looking to breathe some fresh life into it.”
Kruze Consulting CEO Vanessa Kruze, COO Scott Orn and office dog Token
The company’s “Founders & Friends” podcast, hosted by Orn, has the same goals, featuring conversations about business best practices with startup founders — many of whom produce the software Kruze Consulting uses. The firm’s fully cloud-based technology stack includes Bill.com, Expensify, Gusto, Avalara and NetSuite.
Kruze and Orn are grateful to have witnessed many early-stage companies, including Gusto, skyrocket. And, despite industry projections of a tech bubble, neither of them foresees that pace slowing.
“I’ve seen, my whole career, that people that start startups will always start companies,” Orn shared. “They always find a way, and they will continue, even in a funding slowdown. There’s been a shift in funding from different industries, but not a slowdown of overall funding. If you have a good idea, you will be funded. The VC market is so competitive and for Vanessa and I, it’s cool to sit where we sit, and see the companies that will be popular. The market is really strong — don’t believe the hype.”
Kruze agreed, explaining that companies with the right work ethic persist: “In this industry, the idea, none of it matters compared to the attitude of the founders and how they execute on those ideas. Companies on paper that seem like they are going to be a rocket ship, a revolutionary idea — if the execution is not there, they’re sometimes not successful. The opposite is also true, with an idea where you don’t know how it’s going to work, but the founder puts their heart and soul into it, and it’s a booming business, and an acquisition offer is on the table. You never really know which company is going to make it.”
Kruze is sure of one thing, though, insisting that two attributes are rewarded in Silicon Valley. “The smart and nice people do really well.”
AT A GLANCE
Firm: Kruze Consulting www.kruzeconsulting.com Headquarters: San Francisco Founder & CEO: Vanessa Kruze No. of staff: 17 Year founded: 2012 Services: Accounting; bookkeeping; tax compliance; CFO; consulting Industry specialties: Startup companies
Danielle Lee, managing editor of Accounting Today, previously served as technology editor of Accounting Today and editor-in-chief of Accounting Technology.