"We want to transform how accountants think about software and how accountants interact with their clients." – Kurt Avarell
From 2008 to 2010, Kurt Avarell worked on Wall Street as a tax attorney, where he occasionally took on pro bono cases. These cases gave him his first glimpse into the inefficiencies of tax resolution and the lack of software available, and eventually led to the creation of Canopy. Here’s how Kurt went from Wall Street attorney to programming in his basement to becoming the founder of a fast-growing startup that’s revolutionizing the way tax professionals work.
In New York, many of Kurt’s pro bono clients were in need of tax resolution services. Over time, he became frustrated with the tedious activity of filling out forms over and over again, entering the same information into Excel, and using several different softwares to complete other tasks. The slow workflow led to strained relationships with his clients, as many of them were in high-risk situations with the IRS and sought relief as quickly as possible. The clunky process slowed down their path to resolution and added to their stress.
Kurt recognized the need for a collaborative, cloud-based platform for accountants – something that would make the tax resolution process less painful and help them connect to their clients in more meaningful ways.
Certain he could find success in this area of the market, Kurt quit his job, rolled up his sleeves, and got back to his entrepreneurial roots. He applied his knowledge of tax to a completely different industry—tech startups. That’s when he founded Rocket Relief, a marketplace that connects tax professionals with taxpayers, and started programming. Funding for Rocket Relief was jumpstarted by Kurt’s participation in Start-Up Chile. He and his wife and kids lived in Chile for four months, and Rocket Relief became one of the first startups to “graduate” from the program.
Eventually, Kurt sold Rocket Relief, and in January 2014, he applied what he learned from developing and running a startup to programming a modern tax resolution software in his basement—what would later become Canopy.
Kurt found Canopy’s niche by talking with accountants to identify key pain points. He asked himself several questions as he made the decision to take the plunge into building out Canopy’s vision. Would people buy? Was the market big enough? Could he make money? The answer to all of these questions was a resounding “yes.” Kurt started working on the software immediately, refusing to get stuck in analysis paralysis.
Canopy started as Beanstalk in March 2014 and raised $2 million in seed funding from New Enterprise Associates (NEA), with participation from EPIC Ventures, Deep Fork Capital and Jim Engebretsen.
At this point, Beanstalk’s website consisted of a “Coming Soon” page that asked accountants to sign up with their contact information if they’d be interested in the software’s release. In under a year, more than 700 accountants had signed up, hearing about the potential software by word-of-mouth alone.
“There was a ton of satisfaction when we released our software,” Kurt said. “We thought people would love it, and it was awesome when they did.”
In 2015, Beanstalk was rebranded as Canopy, and in June 2015, another $8 million was raised in Series A funding from NEA, with participation from EPIC Ventures and Deep Fork Capital. We used the funding to build a best-in-class tax resolution software and add Practice Management to the product lineup.
Currently, Canopy employs more than 180 people, and that number is growing rapidly—more than 120 employees have been hired in 2017. And we’re still going. We have open positions in every department.
In addition to the high amount of hiring this year, we hit other major milestones in 2017.
In March, we raised $20 million in a Series B round.
In May that Series B funding was named to the Top 10 US VC-Backed Fintech Deals for Q1 2017.
In May, we also moved offices for the third time in about a year.
And in November, we launched a free CPE and CE education platform.
“I want to make Canopy a place where people love to come to work, and they’re challenged every day,” Kurt said. “It’s rewarding to see people catch the vision and carry it forward.”
The team has risen to the challenge and currently helps thousands of tax professionals grow their practices and develop better client relationships.
“For every accountant we can give a better experience to, we can also give a better experience to 200 of their clients,” Kurt said. “That is very motivating for us as a team. These are real people saving hours of their time and having a pleasant experience with a process that can otherwise be very unpleasant.”
Our vision is that tax professionals will be able to connect every element of their work: clients, documents, tasks, forms, calendars, casework, communication, and invoicing, on one secure, easy-to-use platform. We also aim to add transparency and clarity to the experience between tax professionals and their clients.
Our vision has played a key role in product updates since the beginning, but there’s still much of that vision left to fulfill, and our team is excited to do that.
“It’s surreal,” Kurt said. “In less than three years, Canopy’s gone from a basement concept to a sizable company. It’s been fun. We are in the beginning of transforming the industry in ways that accountants can’t even imagine yet.