wdaher

I've been on the receiving end of one three times now, but have never "hosted" one myself. As an angel, I'd probably always prefer to invest directly, but if my alternative were "RUV or you can't invest," I wouldn't object to the RUV.

The process itself is slightly easier because I don't have to tediously type in wire instructions into my bank's website :)

The creator of the RUV can decide whether the company pays the fees or whether the investors pay the fees. The ones I've done so far have been "company pays the fee," in part I think to help avoid the perception that you're getting a worse deal via the RUV.

This is definitely anecdata, but sometimes they will. In particular, I've definitely been asked to reduce my own allocation to let someone else in.

Agreed. The caveat on all of this is "Assuming everyone is an accredited investor." (I've edited the original post to make that clearer.)

The other framing of the problem is: If you're going to raise a fixed amount of $X, is it better to raise it from a large number of angels (each writing smaller checks), or a small number of firms (each writing larger checks)?

I'd go for "larger number of participants," for the reasons I mentioned.

Updated!

Post author here — I'm not affiliated with AngelList at all, though I did invest via one of their RUVs once and was a fan of the experience.

(I'd largely written the post before even being aware of that offering, which is why it's kinda tacked on at the end.)

Definitely +1 on needing to vet no matter what--no amount of clever corporate structure or legal agreement will save you from someone being a pain

+1 to Founding Sales — it's great, and Pete is great as well

Yes, what you're describing is incredibly common. What we're hearing is that small community banks were most successful at actually getting this money into the hands of businesses, whereas the large banks were fairly slow. (And many startup-specific banks were just completely unprepared for it.)

My advice is: continue to work with your lender to get your application squared away so that it's fully ready to be submitted to the SBA as soon as additional funds are allocated (since I can't imagine that those will last long either.)

(In the interest of full disclosure, I'm Pilot's CEO. We don't do anything with PPP loans directly but it's an area of significant interest to our customer base, so we've been following it closely and have been pretty regularly releasing updates like this one from yesterday: https://pilot.com/blog/the-ppp-has-run-out-of-money-now-what...)

Hi! Not doing this to be evasive but because I think we can probably have a higher-bandwidth chat about the exact specifics of it by phone, if you're up for it.

Can I encourage you to drop me a note at waseem@pilot.com or we can schedule some time together here?: https://calendly.com/pilot-waseem/overview

Yes, generally you have to use something like a bill.com or routable (https://routable.com/) if you want to track an AP flow starting with the bill in that way.

(There's a more premium version of Pilot Plus where you basically just forward the bill to bill.com and we'll code it and submit it for approval for you, etc.)

As for expense and revenue accruals, you and we have to mutually agree on a mechanism for you to communicate that information to us. Exactly what that mechanism is will depend on the details of the revenue or expense accrual, but sometimes this is as simple as "You tell us you have a recurring expense of X amount, so you need to accrue y% of it every month", sometimes it's just you report "I'd like to accrue X", etc.

We do the reconciliation—and you're exactly right that QBO doesn't have a reconciliation API, so we have to do it outside of QuickBooks in our own system.

(But yes, we've found that if you don't do this reconciliation, the bank feed will just silently drop transactions, etc.)

Hi there! Pilot CEO here. We do accrual bookkeeping by default but we can do cash-basis bookkeeping too, if you require it.

By and large our requirements are around the use of electronic systems to capture data (so, if you have a stack of paper invoices today and you're opposed to using a system like bill.com or similar, it's not going to be a great fit.)

Yes, our first company (Ksplice) got an NSF SBIR Phase I. We had bootstrapped the company, and the grant was definitely helpful!

(Having said that, the application process is pretty onerous and so are the bookkeeping/timetracking requirements.)

Yep, we generally point people at QuickBooks invoices or bill.com, but we have them do the inputting/sending of the invoices via one of those services.

Hi Ian! Congrats to you folks on the recent funding round as well.

Great question, and definitely one of the operational complexities of the business.

Our thesis is: by relying heavily on software from day one, we can actually do it with a small, super-highly-skilled team (rather than a giant army of folks.)

If the task can really be done by an arbitrary person somewhere without context on the business itself, I suspect we can execute that same task ourselves in software (only with much higher consistency and much lower cost). Transaction categorization is a great example of this, actually.

I think the alternative—scaling by just hiring a ton of people—is compelling because it's short-term easy but long-term hard. By analogy to a software system: if you scale with an army of people, you're building a giant distributed system of super-unreliable hardware (the error rate of people is pretty high!), and you can't reprogram it by running "git push".

I'll venture to make a stronger statement: if you care at all about consistency of quality, I think you have to do this mostly in software -- because otherwise the quality of your service is going to be entirely the quality of the individual bookkeeper you use, which is fundamentally going to be pretty variable.

Pilot is not replacing Xero or QuickBooks (in fact, we do all our work in QuickBooks -- and we're definitely aware of Xero.)

Pilot is a better bookkeeper, and the reason we can be a better bookkeeper is that, even with a tool like QBO or Xero, there's still a bunch of incredibly manual work that happens ON TOP of those platforms, and a lot of that work is very well-suited to being done in software.

Do Xero and QBO get better and smarter with time? Sure, yes, of course they do. But the problem is: no one software company (i.e. a company with the ability to develop software) owns the problem end-to-end, so it's never going to be seamless.

(It's not obviously Xero's problem if the Xero/Gusto sync isn't very good, and it's also not obviously Gusto's problem either. Net result: the bookkeeper does a bunch of work by hand to fix it all up themselves--work that's super-manual and tedious.)

That's where we come in; we're the bookkeeper, but we also have the ability to write software when it's appropriate for solving the problem.

Pilot isn't "more bookkeeping software", it's "hire this company so that you don't need to worry about getting into the weeds in QuickBooks Online every month, because you have a person who will do all your work in QuickBooks Online for you (assisted by our software)".

It's not that bookkeeping is rocket science or totally unlearnable (you can definitely learn it), the question is really whether it's actually the best use of your time to master it (when you could instead be focusing on running your business).

Biggest differences vs. inDinero are:

1. Our books are stored in QuickBooks Online, and you have access, so you're never locked in. (The "Leave inDinero" migration is a pretty rough one.)

(Strategically this is also important for us because it lets our engineering team focus on building software to assist with the most thorny/painful parts of the process, as opposed to making a QuickBooks clone.)

2. We do accrual by default (inDinero will do it but only at the most premium tiers)

3. Most importantly: our customer service is way better—if you're seriously considering inDinero, I'd encourage you to talk to a few current users and see how they feel about it. (Not fearmongering, but the stuff we've heard has not been great.)

My brief advice is: it's easier to work backwards.

Said another way, rather than falling in love with one domain and working hard to get it, try to come up with a shortlist of ~10 domains that are acceptable where they aren't obviously in use, and then work that list until you get something that's acceptable for you.

(Also, depending on your budget, also happy to connect you with the domain broker we used.)

Yes to reconciling, generally no to preparing/sending invoices, but it depends. (The Pilot Plus tier basically is "Let's talk to you and really understand your needs and put together a custom quote that makes sense given the work you want.")

Generally speaking we like to take on the work of the "monthly close" — i.e. making sure the books reflect what happened in your business the previous month, and we're less keen on doing stuff like following up with your customers who haven't paid, both because (1) that's something you probably want to have happen more than once a month, and (2) there's actually a lot of on-the-ground knowledge that you or the sales rep have that we may not have.

No relation to any of those companies, though naturally we do buy Pilot pens. I mean, they're just great pens.

This is exactly why the human is in the loop and why the solution isn't purely software — to help come up with processes and mechanisms for resolving this sort of ambiguity.

(Every outsourced bookkeeper today has this challenge, and there are a variety of options for resolving it, depending on what the customer requires.)

We'll do the bookkeeping to track payroll — to actually process the payroll itself, we recommend something like Gusto.

(For project/job costing, we can do it, but it's definitely a premium feature which we don't support by default.)

Yes.

Yes! "Pilot recommended financial stack" is definitely at the top of the list of blog posts we want to write because it's just super-nice to get set up on the right stack from day one, rather than having to worry about it when things are more complicated.

The short, spoiler version for now is: Gusto, Chase corp card, Stripe, Expensify, bill.com if you do a lot of invoicing.

(And then the more 101 stuff, like, "Please don't mix business and personal expenses")

We do all of our bookkeeping in QuickBooks Online (and only QBO) today.

In the US, QBO is still definitely the market leader, and we think there are a bunch of benefits for our customers in using QBO. (Bank integrations and other third-party software integrations tend to be better, there's a bigger ecosystem of e.g. tax and accounting firms that are better-equipped to deal with it, etc.)

(And then from an engineering perspective, we can be a lot more efficient if we can focus on targeting one platform.)

The first time we see something totally unknown to us, just like a normal human bookkeeper, we'll have to ask you about it (assuming there isn't metadata somewhere else that helps us categorize it).

But then once you've told us, unlike a normal human bookkeeper, we won't forget about it later — we'll actually encode a rule in our software that will enforce this check going forward.

(And yes, you also do benefit from "If our system has seen this type of transaction somewhere else, we can make a more intelligent guess")

Three key differences:

* Our books are stored in QuickBooks Online, and you have access, so you're never locked in. If you need to work with another provider or just don't like us anymore, you can hand your data to any bookkeeper in the world, because it's just QuickBooks (vs. being handed an Excel export from a custom accounting system)

* All we do is startup company bookkeeping, so we've developed super-deep expertise in it (vs. aiming to solve it for, e.g. the bakery or yoga studio)

* We do accrual-basis bookkeeping (vs. only supporting cash-based bookkeeping)—this is a pretty inside-baseball thing, but it matters as the startup gets larger

I don't know how much automation Bench has already built, or if it's all just humans under the hood, but one structural advantage of #1 for us is that it means our engineers can spend all their time focusing on automating error-prone work (rather than needing to build out a QuickBooks clone).