I'm the founder and CTO of Kynetx. This series of articles relates my discoveries and feelings about starting a high-tech business. This is the thirtieth installment. You may find my efforts instructive. Or you may know a better way---if so, please let me know!
The other day my wife was telling me about a friend of our's whose ex-husband "lost everything because his partner was embezelling." I hear things like this from time to time. I'm sure you do as well. But there's really no reason for it. Proper financial controls can help keep everyone honest.
When we started Kynetx, Steve and I sold a plane we'd owned jointly to fund the business initially. There was no income, expenses were relatively low, and it was easy for us to keep track of the finances. Quickbooks was there and we both had a pretty good idea of what our financial picture was--all you had to do was look at the balance.
As we grew, got some revenue, and started looking for external financing we were lucky to find Roy Avondet. Roy is a retired managing partner at Deloitte and wanted to be involved. Steve handed Roy the Quickbooks files and said "all yours!" Roy's been our CFO and financial advisor ever since. Thanks to Roy we're always had accounting practices that outstripped our size.
I'm confident there's never been a point in the history of Kynetx where an individual could take large sums from the company without us knowing and quick. Stealing from Kynetx would require collusion of two or more people and that's where the safety lies.
We were lucky to find Roy, but you don't need luck. There are plenty of accountants who can help you put proper financial controls in place. It's not too expensive and it's not too much hassle. Rather, it's necessary for creating a real business. If your startup doesn't have good financial controls in places, fix it today--it's never too early or too late to start.