Local accounting firms are making a profit off of NY’s booming tech industry, according to Crain’s NY Business. There is a growing market of partners that are heading tech practice groups. This expansion is seen as a way to re-boost client lists hurt by struggles of local industries like fashion and publishing. These accountant groups are promising to work with younger entrepreneurs until their startups have come full circle. However, once companies become big enough to IPO, a lot of investors only feel comfortable with big-name auditing firms. This is why smaller firms are interested in making a connection early on, so as to secure a long-lasting partnership that international firms cannot offer.
Seth Molod, a partner at Berdon, said, “These companies need someone to talk to,” Mr. Molod noted. “Young, inexperienced companies need handling…You get a sales guy you won’t see again.” Additionally, small firms can offer more affordable options for startups that are low on cash. Sometimes this means a stake in equity is given for a reduction in fees.