Today we’d like to introduce you to Joe Hawke.

Hi Joe, thanks for sharing your story with us. To start, maybe you can tell our readers some of your backstory.

I was born on the prairie and raised in a deciduous rain forest. When it stopped raining, I would go outside to run and jump and play.

My mother tells me that my first career aspiration was, “When I grow up, I want to be a garbage man.” Later, when I had to take out the trash, I changed my mind about being a garbage man.

One time, I saw a man playing drums, and I said I want to be a drummer. I took lessons and did become a drummer, but I was better at school than drumming, and so I went for more school.

I said, “When I grow up, I want to teach. And maybe be a published author.”

In college, I fell in love, worked outside of school, and I thought I needed to make more money than I would earn teaching or writing. So I went to work for a bank, because they have all the money, and I said, “I want to be a banker.”

But then I got stiffed on a bonus, and so I left the bank, and went to work for another company that leased equipment.

Later, my former boss from the bank came to me and said, “This venture capital firm is looking for an associate. I thought of you. Give them a call.”

And I did call them, and they did hire me.

I got an MBA at night. I was officially a businessman and a venture capitalist. I was certain that I would finally make all the money that we needed.

And my wife had a baby. And we got a Volvo.

But then the man who hired me got pancreatic cancer, and I left to work for another bank to create another venture capital firm. I was a founder. I was certain that my financial future was secure. And we had another baby.

But then I made a bad investment, and they fired me. Then they changed their mind, but it was too late. And so I went back to the first firm, which had survived the death of its founder.

And I brought with me a new investment opportunity to acquire a helicopter company.

It was a successful investment that was followed by another baby, another helicopter company acquisition, yet another baby, and yet another helicopter company acquisition, I imagined my financial future was secure.

But then we had to raise a new fund, and I was not content with what I was offered, so I left. And when I did, I decided I would become an entrepreneur in my own right in the helicopter industry.

And I did. I formed a partnership and invested my own money and raised other funds, and I bought a helicopter maintenance company on the prairie, not far from where I was born. But then there was a financial crisis, and, almost immediately, the business suffered.

As a helicopter industry entrepreneur, I met other people who wanted to sell their businesses to me, sometimes for no money down, and so my partnership bought those businesses and added them to the portfolio. Some were sold at a gain, and some at a loss.

Entrepreneurship took a toll on my marriage, and my wife and I separated and eventually got divorced.

The helicopter industry had a major downturn, and I had to invest more money in my company to keep it alive.

I met a new woman who was also divorced and we decided to marry.

By this time, I wasn’t sure what I wanted to do anymore. But we continued to invest in my company to keep it alive after it got sued by the largest helicopter manufacturer in the world.

We sold the house I had bought after I got divorced to raise the money we needed. Fortunately, we didn’t need my house anymore because I had moved into her house.

I still didn’t know what the future would hold, but I didn’t worry anymore.

I started playing drums again and started writing again. I never did teach, but I do still take out the trash.

Alright, so let’s dig a little deeper into the story – has it been an easy path overall and if not, what were the challenges you’ve had to overcome?

I have often wondered how my life and career trajectory have appeared from a third-party perspective. The reality is that everything seems more perfect from the outside.

On the one hand, I cannot deny that I have been extremely fortunate, starting with the benefits of my education. That opened numerous doors for me to which I might otherwise not have had access.

On the other hand, what changes as one ascends during the course of one’s career is the cohort to which one compares oneself. I have certainly made my share of mistakes, and had my share of misfortune, some of it due to exogenous factors, and, undoubtedly, some of it self-inflicted, or at least the consequence of choices I have made.

For someone who has not been legally trained (I never went to law school), I have had more exposure than I might have expected to all manner of legal transactions:

– I have participated in well over a hundred financing transactions, involving bank and non-bank debt, subordinated loans, equity investments, partnership and joint venture agreements. I have been both a lender and lessor, and also a borrower and lessee. I have been a landlord and a tenant. I have been in default of legal agreements, lending arrangements, and I have had to enforce default provisions, engage in collection efforts, and, one time, even had to repossess a helicopter for which I was personally the senior creditor.

– I have been audited by the IRS, both business and personally. I don’t recommend it, and hope never to repeat the experience. As an entrepreneur both when I got audited and some years later when I got divorced, the volume of disclosure were on par with one another. Both are time consuming, thankless experiences.

– I have been involved in litigation, both as a plaintiff and a defendant, and both as an individual and through an entity.

I suppose if you are forced to stare into the abyss enough times, which, during certain periods, is what having to make payroll every two weeks also felt like, it enables you to develop a fairly thick skin, to avoid overreacting, and to be more measured when you do react. It creates a sort of calm from within. In my case, it strengthened my faith.

It turns out everyone has their ups and downs. Nothing that happens here in this earthly realm is permanent or irreparable, as long as you choose to keep going.

Thanks – so what else should our readers know about your work and what you’re currently focused on?

My principal skill set is as a deal guy, and the sandbox I play in is primarily the helicopter industry, having been involved in it for now over two decades. I know how to generate deal flow (i.e., investment opportunities), and I have developed a perspective of what strategies are feasible, from a business plan standpoint, and—having drilled a number of “dry holes” over the past twenty years—which are not worth the effort.

For a capital provider who has interest in the space, what I bring to the party is a combination of decades of industry experience together with the ability to speak the language of the capital markets, having been formally trained in banking and venture capital/private equity.

In short, I have been living at the intersection of the helicopter industry and the private capital markets for over twenty years now, which is not a crowded intersection and makes for a somewhat unique skill set.

What sort of changes are you expecting over the next 5-10 years?

The helicopter industry, which is a bit of a misnomer, since it is not a monolith unto itself (other than for the manufacturers), is really a series of uncorrelated end-use markets: off-shore oil and gas; air medical transportation; utility operations; law enforcement; VIP transportation, and those are just some of the primary civil end-use markets. The global military market is about as big as the global civil market. The U.S. continues to be the largest single market, for both civil and military, representing about 30% of the global market share of the installed fleet.

Current patter within the industry generally focuses on electric engines and something called urban air mobility (UAM), which is the idea that the Jetsons way of moving about will finally obtain. I tend to be skeptical about the likelihood of the latter anytime soon. There is too much low level airspace infrastructure that would need to be developed before any of that could become a reality, not to mention landing zones, and recent crashes involving helicopters, such as the mid-air collision over the Potomac, will make de-conflicting the airspace, rather than adding more traffic to it, the higher priority in the short run, I expect.
Electric engines may eventually start to replace turbine engines (I have not historically gotten involved with piston engine helicopters), but the rate of change in the helicopter industry tends to be very slow.

Lastly, there have been – and continue to be – predictions of helicopters being obsoleted by unmanned aerial vehicles, also known as “drones.” While I expect for certain utility missions, especially something like crop spraying or patrol missions over sparsely populated areas of the country that is a viable play, the FAA does not seem to be in a particular hurry to promulgate beyond visual line of sight (BVLOS) federal aviation regulations, and until they do, the business case for drones will be highly constrained, absent a waiver that permits BVLOS. Helicopters can just do a lot more than a drone that has to stay within the operator’s visual line of sight in a much shorter period of time, which creates greater efficiency. Essentially, drone operations, which currently exist, are too labor intensive and take too long in comparison to a helicopter for the identical mission. What a helicopter can accomplish in a day, a drone team would require a week or more to fulfill. That said, if over the next ten years the FAA does issue BVLOS regulations, that equation could well change, since drones are cheaper than helicopters, both to acquire and to operate. Time will tell. It always does.

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