AIB Start-up Academy & Irish Times Content Series: John O’Dwyer, Head of Technology, Media & Telecommunications at AIB
14 Jan 2016
John O’Dwyer started his career in software engineering, but subsequently moved into accounting and corporate finance, which means he’s perfectly placed to draw from multiple sectors in his role as Head of Technology, Media and Telecoms Banking at AIB. Having this wealth of experience means he also makes a valuable AIB Start-up Academy Mentor.
O’Dwyer is a passionate believer in the potential of the Start-up environment in Ireland and the many opportunities available right now to people starting their own business.
He says, “I think Ireland, in particular, is the envy of a number of countries. We have a very well developed enterprise support system, be that through the accelerators and incubators in the country, our own AIB Start-up Academy, but also Enterprise Ireland, a fantastic resource for Start-up companies in Ireland.”
Drawing from his finance background, he stresses the importance of a solid footing for new businesses, and believes anyone involved in a Start-up should make financial planning a priority right from the beginning. He’s also excited about the opportunities available for applicants to the AIB Start-up Academy.
He explains: “I’m really excited about AIB Start-up Academy. I think it’s a great platform for companies and Start-ups to learn from one another’s experiences in starting up their business which helps to create a better company.”
Read on for his thoughts on pitching your Start-up to investors, why you should build a good relationship with your bank, and the potential for technology to disrupt the Start-up environment.
Get the right kind of capital
Sufficient capital is critical in terms of starting, maintaining, and growing your business. It’s very important for the Start-up and founder to know what kind of capital you’re looking to raise. Debt capital is low risk, low return. Equity capital means higher risk, compensated by higher return.
So it’s important when you’re pitching your business that you understand the difference between the two, and who you’re pitching your idea or your business to.
Know your audience
Research your audience. Look at who you’re going to be meeting before you get to the meeting and understand where they’re coming from. If you’re looking for equity capital, that is Start-up capital, which is more risky. In that case, the investor is going to be looking for a return of maybe three times on their investment. They’re going to be looking at a different angle on your business. They’re willing to take more risk, but as a result they’re expecting more reward.
Alternatively, if you go and meet a bank, you should produce cash flow forecasts, which actually demonstrate how you would repay capital and how you would repay the loan.
Invest in financial planning
I think Start-ups should invest in financial management and financial control from the very, very early stages. Don’t see it as a cost - see it as an investment. It will pay for itself in the long-term. I think the old adage which maybe a bit clichéd but it always rings true to me, is that sales are vanity, profit is sanity, but fundamentally, cash is reality. I have rarely seen a situation whereby an accountant or good financial advice doesn’t reward over the longer term.
Build a relationship with your bank
It’s critical to build a good relationship with a bank, and a bank manager or your relationship manager, from a very early stage in your business career, particularly in your Start-up. I can’t think of any other profession, other than perhaps accountancy, that has such an in-depth understand of multiple sectors across multiple cycles, up and down the length and breadth of the country. Think of your bank as not just an outflow for banking or ATM facilities, but as a broader tool to leverage and grow your business.
Role a bank plays in developing a Start-up
I think a common misunderstanding in the market is that a bank is just a bank, whereas it’s a full service financial solutions offering. Banks provide everything from equity capital, right through to debt, corporate finance and advisory.
So be you a small Start-up company with a couple of employees or a multinational, a bank such as AIB will provide capital right along the capital journey – be that the very earliest, riskiest stages through our venture capital arm, or right through debt capital in our business banking and corporate banking and right on through to advice on selling your business.
The future of Start-ups in Ireland
I’m really excited about technology. I think technology is disrupting all industries and all sectors all over the world at the moment and I think we’re only at the start of that evolution. Who would have thought ten years ago that the largest taxi company in the world was an app with no cars? Or the largest accommodation provider in the world was a website such as Airbnb which actually has no property? The possibilities around technology and technology disruption are boundless, I think.
Watch below for a short snippet of interview with John O'Dwyer or visit our YouTube channel for the full interview.