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When Canadian finance veteran Greg Kautz’s son brought 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 about the decision to co-found lease 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 joined the workforce as a government auditor more than 40 years ago, that decision and subsequent career choices would provide the skills and experience required for his current role.
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Derek (left) and Greg (right) Kautz
Kautz brings leadership experience and exposure to every aspect of finance to his new partnership. The father-son duo founded Black Owl Systems over two years ago to help finance leaders meet the IFRS 16 and ASC 842 compliance reporting requirements instituted in 2019.
“There’s probably more effort going into lease accounting transactions than any other transaction type,” Kautz said. The technology they developed based on Derek’s hands-on experience with time-consuming alternatives both streamlines and automate the process while significantly reducing staff time involved.
As Black Owl’s CEO and co-founder, Greg draws on nearly all of his career experiences to develop and expand the business. After honing his auditing skills during five years with Revenue Canada Taxation, he worked briefly for Alberta’s telephone company before shifting to the energy industry, most notably with oil and gas production company Wascana Energy.
“At that point, much of my career involved taking my solid accounting foundation and building it into operational audit. That’s where I started to get an appreciation for what CFOs and finance leaders are faced with because as an operational auditor, you’re not just looking for mistakes, you’re looking 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 part of an auditing department’s work. He did that when his departmental budget wasn’t enough to fund the optimal number of people for the skills needed. Impressed with the innovation, Wascana’s auditor, PwC, invited him to share his approach with some of its other clients across Canada. It was, perhaps, an early glimpse of Greg’s entrepreneurial, “there’s a better way to do this,” spirit.
After eight years and four positions with Wascana, Greg left to move into the C-suite at another energy industry player, private oil and gas pipeline systems consulting company Cimarron Engineering. During his seven-year stint as CFO and vice president of finance, Greg guided 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 to midsize businesses with lease accounting software.
The experience didn’t fully prepare him for the public company reporting requirements he later encountered as co-founder and CFO of a capital pool corporation that acquired a public junior oil and gas company, though. “That’s where I was really struck by the impact reporting requirements have on public company CFOs. These requirements are so important and such a high priority that they cannot be taken lightly,” Kautz said.
That first-hand knowledge also influenced his consulting practice with Lumina Management Consulting, a group of more than 40 professionals providing financial and business leadership that Greg joined when he left Cimarron in 2005. There, until he started Black Owl Systems, his consulting centered around strategic planning, financial systems, mergers and acquisitions, corporate governance, and financial and management reporting.
Interestingly, Black Owl Systems isn’t Greqg Kautz’s first tech startup. A decade ago, during his Lumina tenure, he co-founded a construction software provider. He served as its part-time CFO until the founders sold the firm two years later to a global software company. Kautz brought lessons from that experience — along with its software development team — to his new venture with Derek in 2020.
One of those lessons was that starting a business required sacrifices. For example, Derek was forsaking the security of a salaried position while Greg had to temporarily step back from the financial rewards that come at the apex of a finance career. They also knew that each would take on many roles in the beginning — Derek does more than serve as CFO; Greg is CEO but spends much of his time meeting with clients and prospects — and they’d work long hours to build a brand and launch the product.
My greatest contribution is understanding the demands and expectations of finance leaders. We’re delivering a tool that’s designed for them. — Greg Kautz
But Kautz’s earlier entrepreneurial experiences guided the transition for both. One of the most important lessons he brought to the firm, he said, is the need to be in it with both feet. “I cannot be part-time on this, so I had to give up my consulting practice,” he said.
After initial success selling to smaller businesses, Black Owl’s software is beginning 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 longstanding immersion in business finance.
“My greatest contribution is understanding the demands and expectations of finance leaders. We’re delivering a tool that’s designed for them,” Greg said.
This is part one of a three-part series. Part two will post on March 23.
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