From CFO to Fintech entrepreneur

When the son of Canadian finance veteran Greg Kautz pitched him an idea for innovative technology to solve a vexing lease accounting problem, Kautz didn’t hesitate to say, “Count me in.”

“I saw Derek’s vision. I saw his passion for it. And I saw the opportunity,” Kautz said of the decision to co-found leasing accounting software provider Black Owl Systems with his son Derek, an accountant.

In fact, it seems like Kautz’s entire career led to his current role as a fintech entrepreneur. Although he didn’t realize it when he entered the workforce as a state auditor more than 40 years ago, that decision and subsequent career choices would provide the skills and experience required for his current role.

Derek (left) and Greg (right) Kautz

Kautz brings leadership experience and exposure to all aspects of finance to his new partnership. The father-son duo founded Black Owl Systems over two years ago to help CFOs meet the IFRS 16 and ASC 842 reporting requirements introduced in 2019.

“There’s probably more effort that goes into leasing accounting transactions than any other type of transaction,” Kautz said. The technology they developed based on Derek’s practical experience with time-consuming alternatives both streamlines and automates the process while significantly reducing staff time.

Early experience: Government auditor

As Black Owl’s CEO and co-founder, Greg draws on nearly all of his career experiences to develop and grow the business. After honing his auditing skills during five years with Revenue Canada Taxation, he worked briefly for Alberta’s telephone company before switching to the energy industry, specifically with oil and gas production company Wascana Energy.

“At that point, a lot of my career involved taking my solid accounting background and building it into operational auditing. That’s where I started to get an understanding of what CFOs and CFOs are faced with, because as an operational auditor you’re not just looking for mistakes , you look for opportunities for improvement, he said.

Greg made a name for himself both internally and externally as one of the first internal audit managers to outsource parts of an audit department’s work. He did so when his departmental budget was not enough to fund the optimal number of people for the skills needed. Impressed by the innovation, Wascana’s auditor, PwC, invited him to share his approach with some of their other clients across Canada. It was perhaps an early glimpse of Greg’s entrepreneurial spirit, “there’s a better way to do this.”

Gain CFO experience

After eight years and four positions at Wascana, Greg left to move into the C-suite at another energy industry player, private oil and gas pipeline systems consultancy Cimarron Engineering. During his seven-year tenure as CFO and CFO, Greg led the finance department’s growth as the firm tripled revenue.

Greg Kautz (left) called on his experience as a CFO to help start a company with his son Derek (right) to serve small and medium-sized businesses with lease accounting software.

The experience did not fully prepare him for the public reporting requirements he later faced as co-founder and CFO of a capital pool company that acquired a public junior oil and gas company. “That’s where I was really struck by the impact the reporting requirements have on public CFOs. These requirements are so important and such a high priority that they cannot be taken lightly,” Kautz said.

This first-hand knowledge also influenced his consulting practice with Lumina Management Consulting, a group of more than 40 professionals providing financial and business management that Greg joined when he left Cimarron in 2005. There, until he started Black Owl Systems, consulting revolved around strategic planning , financial systems, mergers and acquisitions, corporate governance and financial and management reporting.

Start-up experience pays off

Interestingly, Black Owl Systems is not Greqg Kautz’s first tech startup. A decade ago, during the Lumina period, he co-founded a supplier of construction software. He served as part-time CFO until the founders sold the firm two years later to a global software company. Kautz took lessons learned from this experience—along with the software development team—to his new venture with Derek in 2020.

One of those lessons was that starting a business required sacrifice. For example, Derek left the security of a salaried position while Greg had to temporarily step back from the financial rewards that come at the top of a finance career. They also knew that each of them would take on many roles in the beginning – Derek does more than serve as CFO; Greg is the CEO, but spends a lot of his time meeting with customers and prospects – and hey would work long hours to build a brand and launch the product.

My biggest contribution is to understand the requirements and expectations of financial managers. We provide a tool designed for them. —Greg Kautz

But Kautz’s previous entrepreneurial experiences guided the transition for both. One of the most important lessons he took to the firm, he said, is the need to be in it with both feet. “I can’t be part-time at this, so I had to give up my consulting practice,” he said.

After initial success selling to smaller businesses, Black Owl’s software is starting to attract attention from “very large companies.” The father-son team attributes much of its growth to Derek’s hands-on experience with competitive products and Greg’s long-standing immersion in business finance.

“My biggest contribution is to understand the requirements and expectations of finance managers. We provide a tool designed for them, said Greg.

This is part one of a three-part series. Part two will be posted on March 30.