This evening I went to an event and heard the story of Dómhnal Slattery, CEO of Avolon. He started in 2010 with Ireland’s biggest ever funding round for a startup. He managed to raise $750 million venture capital – Ireland’s biggest VC deal ever. Now Avolon have turned that $750 million into a $30 billion balance sheet today. They have 958 aircraft. If you put them all in a row you would need to complete a marathon distance from start to finish! They have made Ireland in to a major player in the aircraft leasing sector worldwide.
Here are my key takeaways of the evening and suggestions how these can apply to an average Irish SME owner.
1. You can raise money when the economy is down.
It was 2010 and we were in the midst of a worldwide recession. On top of this a volcano erupted in Iceland (Eyjafjallajökull – try say it aloud!) It grounded flights all around Europe due to all the ash clouds drifting over the continent. This negativity in the aviation industry didn’t deter Avolon and they cracked on and raised a tremendous amount of money. Then in 2011 there was a widespread perception that the Euro was going to go bust. Avolon spoke with smart investors who could see the bigger picture and invested $300m at a critical point for the company.
From the above examples, you can see that by speaking with the right lender you can find success. Businessloans.ie speaks with many business owners who may not have had success in getting loan approval from their bank. These days there are many alternative finance providers who can help. You just need to speak to the right one and we can help get your loan approved with the right partner.
2. Company culture has to be a top priority even if it means getting rid of important people.
Dómhnal said “in business you rarely leap forward if growing organically.” At one point Avolon acquired CIT Group aircraft leasing business and it had around 150 employees. Avolon is big on values.
Here’s what they have to say on the matter: “Our corporate values - embodied in the acronym TRIBE (Transparency, Respect, Insightfulness, Bravery and Ebullience) - form the basis of how we run our business, how we interact with one another and with all of our stakeholders. Our TRIBE is who we are and what unites us as a company.”
Within one year of acquiring CIT Group aircraft leasing 130 of the 150 original employees were gone. If you stick with your values you need to be willing to risk losing valuable people who don’t fit them.
3. You can manouvere your business out of a sticky financial situation and maintain access to credit.
Avolon listed on the New York Stock Exchange. This was a huge milestone for an Irish company. They listed at $20 a share. Then 13 months later a company called HNA offered to take a controlling stake at $31 a share. This was a $1 billion premium on the value and the board accepted this excellent offer. HNA had lofty goals for expansion and over-extended themselves and became cash-strapped, risking the very existence of Avolon. They had to find a solution and they worked out a deal with Japan's Orix who bought a $2.2 billion stake in Avolon. This deal enabled them to upgrade to a BBB- rating and have access to the US capital markets to sustain themselves.
So what can be learned from this example? Businessloans.ie speaks with business owners who have put themselves in a sticky situation by leaving it too late to get a business loan. They start missing payments and their bank statements are looking too bad for a credit team to pass. It’s so important to do some forward planning and get your loan while the going is good.
4. Give back.
Avolon already has an enviable corporate responsibility policy. “CARE enables our employees to take the lead in collaborating with local and international partners to promote innovation, social development, education and meaningful change in the world. The CARE intiative is delivered under four pillars: Community, Avolon Care Days, Resources and Education / Entrepreneurship”.
This evening I heard Dómhnal introduce Project i. This is a white paper outlining a bigger-picture initiative on how Ireland can build a better start-up scene. You can download it here
They wanted to understand how Ireland compared and contrasted with the best startup eco-systems in the world. To do this Avolon took many of their best employees off the job to meet stakeholders around the world. They learned from these best-in-class startup eco-systems and make recommendations under the headings Education, Early Stage Funding & Support, Acceleration, Venture Funding and Growth & Exit.
This project really is a BHAG (Big Hairy Audatious Goal) and it’s going to take major players throughout our society to get involved. But what can you do as a small business owner? I would suggest looking at your own company culture and corporate responsibility. Start small and do what you can in your locality. Take a small step towards giving back.
I would like to thank the Irish International Business Network and Grant Thornton for making the event possible.