🔒Rivet Tax aims to modernize an old-school industry with AI and venture backing

If your image of a tax prep firm encompasses a dusty office in a strip mall where you turn up with your shoebox full of documents, there’s an entrepreneur in Connecticut who would like to change your mind. Particularly about the shoebox. “This business is really the game of organizing data — that’s all it is,” said Woodbury-based Nick Abouzeid, CEO of Rivet Tax. With his co-founder Kyle Christenson, he’s building what the pair call the modern tax prep firm powered by AI-enabled technology that organizes every file and communication from their clients. Rivet is part of a growing national trend in the accounting industry, where firms are racing to integrate artificial intelligence and modernize operations amid a surge of private equity and venture capital investment. In fact, private equity has invested more than $50 billion in new capital into CPA firms over the last six years, with equally large deals coming from the VC world. Investors view the accounting sector as ripe for disruption, as a wave of retirements and a persistent hiring crunch have fueled consolidation and major investments in new technology. Rivet Tax is only a couple of years old — founded in January 2024 — but has already raised millions in venture funding, employs more than 40 people and serves hundreds of clients. Abouzeid says the firm draws on a decade of tax-preparation experience through Christenson, a former IRS auditor. When Christenson left the IRS in 2016, he started his own tax prep firm. It was successful, but there was a catch. “The ​tax ​part ​of ​the ​job ​is ​only ​a ​fraction ​of what ​you ​actually ​have ​to ​do ​as ​a ​CEO ​every ​day. And ​he ​hated ​everything ​else ​around ​it ​because ​the ​system ​wasn’t ​set ​up ​to ​help ​him thrive,” Abouzeid said. “He was drowning in organizational hell.” Christenson eventually took a full-time job at a financial technology company, and scaled back his tax prep business to work only nights and weekends. Abouzeid — who was one of Christenson’s coworkers and a tax prep client — saw an opportunity. Abouzeid’s background is in venture capital and marketing for startup finance and fintech firms. He helped Christenson recognize that he was undervaluing his services, connected him with clients who had more complex tax needs, and began professionalizing the client-facing side of the business using organization and communication tools such as Notion and Slack. “And within two years, he was making more money doing that nights and weekends with 10, 15 clients than he was from his full-time job. And we knew at that point it was time to go full time,” said Abouzeid. And that’s how Rivet Tax was born. Abouzeid also took the unusual step of seeking venture capital from the start, raising $1.7 million in a pre-seed round in January 2024. “We ​decided ​to ​raise ​because ​we ​saw ​the ​opportunity ​of ​building ​the ​software, ​basically ​to ​build ​a ​platform ​around ​Kyle, ​that ​was ​our ​own and ​integrated ​with ​everything,” he said.

‘Unlock growth’

The system they built compiles every client email, Slack message, text, Zoom transcript and document upload into a searchable, AI-powered database designed to maximize efficiency and ensure continuity in managing information. Abouzeid says the system is designed so a new preparer could take over a file mid-tax season without having to ask clients questions that have already been answered. “We call it the stupid question problem,” he said. “That’s how you get fired, … you ask too many stupid questions. Everything we build is designed to make sure it doesn’t happen.” They combine that with a flat-fee structure, where each client is given a custom quote for their annual services, and there’s no per-hour billing. From a two-person start, the firm has been steadily growing, and now employs 44 people, five of them software engineers. It’s an entirely remote operation with employees distributed all across the U.S., and now also in India, where they have hired 30 tax preparers. San Francisco-based XYZ Capital was one of Rivet Tax’s earliest investors. Partner Chauncey Hamilton, who lives in New Canaan, had known Abouzeid and followed his career for several years.

“I think he has a very unique opportunity to build a corporate tax prep firm that’s AI-native,” she said. “It’s ​a ​very ​exciting ​moment ​in ​time ​for ​this ​business ​to ​be ​born.” She also credits Abouzeid’s hard work and enthusiasm for the sector. He has taken tax prep exams and become an enrolled agent, a federally authorized tax professional who can represent taxpayers before the Internal Revenue Service. “When you’re seeing an entrepreneur dive so deeply into a certain market, I think that gets very exciting as an investor, because you see that they know from first principles what the pain points are there,” she said. XYZ also participated in Rivet’s just-announced $5.1 million seed funding round. “This capital will allow them to continue to experiment on the go-to-market side,” Hamilton said. The company has not yet released its revenue figures, but it has 600 clients of varying sizes. Some are individuals who have particularly complex tax needs. Abouzeid cites a doctor who works for an NBA team. “His W-2 has 15 states on it, because every time he travels to a new state, they issue payroll in that state for the night that he works the game,” Abouzeid said. In the middle are small, venture-backed companies that are just getting started and want to outsource their tax prep. On the larger end, Rivet works with around 100 bigger companies including two that have $30 billion valuations. “At ​the ​end ​of ​the ​day, ​a ​tax ​return ​is ​a ​tax ​return, whether ​the ​company ​has ​nine ​zeros ​on ​the ​income ​line ​or ​two, ​you ​still ​have ​to ​do ​it,” he said. “We ​really ​like ​the ​diversity.” Alongside its hiring push, Rivet is refining its technology, focusing on back-end tools designed to ease the burden of data entry for preparers. “If we do this right, in about a year, we’re going to be able to click a button and have it fill out 80% of the tax return based on this unstructured mess of client data, and then have a human review that and start working on it,” he said. Abouzeid says Rivet will stay independent as long as that structure meets the company’s needs, and he’s in it for the long haul. “This is the last company I want to start or work at, I’m certainly not planning on going anywhere,” he said.