Father-son finance pro creates Fintech startup

When father and son team Greg and Derek Kautz decided to found a fintech business, they knew their finance and accounting experience would play a key role.

That was the obvious product piece, of course. After Derek had a difficult experience implementing lease accounting software that was rushed to market before it was ready, he was inspired to build a better mousetrap. His in-depth accounting knowledge and experience informed and guided his vision for a more efficient and robust tool.

But it was greater than Derek’s knowledge of the needs of companies that use lease accounting. Much bigger.

“Our experience is always there. The CFO in both of us influences how we run our business, and it’s especially prominent when we talk to clients. We are accountants first, says Greg, an experienced CFO and former CFO.

Decades of financial experience

Greg is the CEO of lease accounting software provider Black Owl Systems, the business the two founded in Calgary in late 2020 with an experienced software developer as CTO. Derek, an accountant with a natural affinity for systems technology, is the CFO. The financial tool they have created helps CFOs meet the IFRS 16 and ASC 842 reporting requirements introduced in 2019.

Derek (left) and Greg (right) Kautz

Greg’s more than 40 years in the financial industry include pioneering work on internal audit processes, seven years as CFO and Vice President of Finance for an engineering consulting firm, technology entrepreneurship and financial management consulting.

Derek’s accounting career has included positions at two of the Big Four accounting firms plus roles as financial controller, analyst and global business analyst. In his last two roles, he was part of the IT staff as the department’s liaison with the accounting team.

Greg is openly impressed with his son’s ability to move easily between traditional accounting and the systems that make it easier. “Before we started this, I never realized how strong of an accountant Derek is. “What probably impressed me the most is how he has articulated what the tool needs to do and how it can be made very user-friendly,” Greg said.

In addition to helping the duo determine whether Derek’s product idea was financially viable, their combined finance and accounting experience informed their decision on when to bring it to market. Instead of using the “good is good enough” approach, they waited until the software was the best they could make. Investing in product performance to prevent the customer problems Derek faced in the past came before spending on sales and marketing.

To see the big picture

Greg believes their backgrounds, and particularly his previous CFO experience, give them a high-level perspective when making decisions. “Because we have the ability to see the whole business, we can balance the financial side with business planning, development and operations,” he said.

Greg (left) and Derek (right) Kautz knew their finance and accounting experience would play a central role in founding their fintech startup.

It also helps them make decisions about how they spend money. “Do we build the product and get the best version available? Or do we spend more money on marketing?” Derek asks.

One thing they haven’t spent money on yet is office space. The team of 10 – the co-founders, the sales manager, the software developers and the accountants – all work remotely.

Family roles disappear

Greg envisions renting office space in the future, but recognizes that his CFO son will require him to make a case for the expense first. “When I suggest an investment like a website update, he’ll say, ‘Show me the rationale.’ It forces me to be responsible,” Greg said, adding with a smile, “that’s where the father-son roles are gone.”

The disappearing family hierarchy is evident in their day-to-day operations as well, although one aspect caught Greg off guard at first. “Derek is definitely more direct than any other people I’ve worked with. He’ll say, ‘I don’t like this’ or ‘I disagree,'” Greg said.

Derek said direct communication has always been his style, but expressing his views honestly is less complicated when the colleague is a family member. “I’ve never shied away from sharing my opinion on what I think is best for the business, but here I don’t have to worry about stepping on toes or office politics,” he admits.

“People use the term father-son business, but I think it’s son-father. That’s Derek’s vision. It’s Derek’s product. I feel like I’m traveling with him.” —Greg Kautz

And while it may be a new experience for Greg to work with a co-founder who is a generation younger, he sees benefits. While some senior finance executives he meets may be closer to Greg’s age than Derek’s, others are not – and neither are their less experienced employees. Observing Derek’s work style and priorities has given his father insights he uses in sales and marketing situations. For example, Greg said he better understands how younger clients see technology as more than an important way to reduce compliance risk. It’s also a time saver that can improve work-life balance, which is a priority for them, he notes.

That’s one way Greg, even though he’s a senior, learns from his son. “People use the term father-son business, but I think it’s son-father. That’s Derek’s vision. It’s Derek’s product. I feel like I’m on a journey with him, Greg said.

This is the last part of a three-part series. Here you will find part one and part two.