Meet Our Tax Experts: Joshua Lee

This interview is part of Meet Our Tax Experts, a series where we’ll hear from Ardius CPAs and why they’re passionate about R&D tax credits for small businesses.

Our CEO and founder, Joshua Lee, spent nearly 14 years at EY before starting Ardius, including as its West Coast R&D Credit Team Lead. Not only that, he has experience on both sides of the table as both a founder and an investor in tech companies. So what inspired his passion for helping small businesses and startups earn R&D tax credits? We sat down with him to hear more about his journey to starting Ardius and the lessons he’s learned along the way.

What inspired you to start Ardius?

I became immersed in the VC landscape, partly from my work consulting with tech companies and because a lot of my friends were either in VC or started their own companies. I decided to leave EY after nearly 14 years to start a venture fund myself. It was a small fund— I called it a “venture building company” — that invested in startups at the pre-seed or seed stages. When those startups eventually needed tax help, I took them to the Big Four accounting firms only to realize we were too small and ultimately be turned away. The larger firms were focused on helping larger companies.

That moment was really the genesis of Ardius. I knew I could help smaller and growing companies get the credits they deserved and help democratize tax knowledge.

Why are you passionate about the work Ardius is doing?

There’s something so fulfilling about helping smaller businesses and startups. These credits can make all the difference and sometimes be the difference that helps them survive. We’re more than just tax specialists. We’re ultimately helping them hire more people, get to the next round of financing, and get their product to market. We get to see our clients grow from year to year, and that’s what drives our team.

What separates Ardius from other firms?

In 2014, changes to the R&D tax laws, notably the PATH Act, shifted the market landscape. For the first time, the credit became available to startup companies that weren’t profitable. The traditional Big Four model of retainers and laborious credit processing no longer worked for either accounting firms or startups. This opened up a market opportunity for a lot of companies like Ardius to use technology to help reduce costs and simplify the tax process

Many of our competitors leverage technology, but don’t have the expertise to back it up. The technical prowess of our team is our biggest differentiator. We have more than 100 years of combined experience at Big Four accounting firms. This means we’ve seen numerous tax situations and audits. We have a high success rate because we draw from that wealth of experience. Many competitors are still relying on the old way of doing things, which only works when servicing larger companies.

What’s unique about Ardius is we have the expertise AND technology to compete against the Big Four but choose to service startups and small businesses to help get them the credits they deserve.

How Do Ardius’ Values Inform Its Approach to Tax Credits?

Ardius’ philosophy is to do it the right way and by the book. We don’t put in for credits we know our customers won’t qualify for and just cross our fingers we won’t get audited. Some companies try to play the audit lottery that way, but that’s not our philosophy. We also don’t rubber stamp what our clients think they qualify for using some self-service survey. We use our expertise to collaborate with our customers to ensure it’s done the right way.

Our approach is to use technology to simplify the process and scale the impact we can have. By using intelligent automation combined with human expertise, our clients get their credits back faster and we’re able to help more companies. We see that as our legacy.

What distinguishes Ardius from other firms to its users?

The traditional process of R&D analysis is very labor intensive for both the practitioner and the client. There are a lot of time-consuming meetings and interviews with different developers and engineers to determine if the work they do qualifies for the credit. It can take up to six months and is a painstaking process.

Ardius uses technology to automate this process. Instead of interviewing employees, our software can pull data directly from various documentation— everything from payroll records to accounting platforms. This helps us quickly determine whether a company qualifies for the credit. That up-front work is 90% of the battle and we do it automatically with technology. Then, that final 10% is still handled by our expert team using their direct knowledge and experience. This turns a months-long process into one that’s done in a matter of days. If a customer doesn’t qualify for the credit, they won’t receive a bill from us. We’re changing the industry to provide a better experience for our clients.

Are you looking for a partner to navigate the R&D tax credit process with? Get in touch, with us!

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