How VCs and startups really feel about the Big Four accounting firms
Do the Big Four consulting firms bring anything to the startup table? It depends on who you ask.
Venture capital investors have a message for founders that might be considering using external consulting firms to help drive growth, or raise fresh funding: Think carefully about it.
The Big Four accounting firms - PwC, EY, KPMG and Deloitte have all moved in various ways to develop closer ties with the Australian startup sector in recent years in a bid to generate long term relationships with companies that may eventually reach significant scale and become lucrative clients.
Conversely, some startups have also seen opportunities in developing relationships with accounting and consulting firms to drive growth. This often takes the form channel partnerships, where startups are given introductions to the large consultancy’s clients in exchange for fees or equity. Such arrangements also come with an unspoken blessing for the startup, boosting their legitimacy with customers by virtue of being associated with well known, credible accounting firms.
But these arrangements can involve startling terms. Capital Brief reported this week on an agreement between PwC and legal startup LawVu, in which the consulting firm would introduce clients to LawVu in exchange for significant payments due upon a liquidity event - that is, a sale or IPO.
