Investor Corner with Aaron Eden

The art of startup valuations with Brian Ellerman

Welcome back to investor’s corner,  this week we’re going to talk with Brian Ellerman, angel investor and the founding director of Arizona FORGE.

As both a technology scout and angel investor, Brian brings a very impartial and diplomatic view to help entrepreneurs navigate early-stage investments.

Brian Ellerman

Brian Ellerman is the Founding Director of FORGE . To see his full bio, scroll to the end of this article. 

Lessons about the art of valuations:

  • Listen to and take into consideration expert investor perspectives: Active angels are seeing 100 or more presentations a month, and as a result, they know what valuations are normal, expected, and reasonable.
  • Ensure you are able to explain your valuation:   Being able to back up the value of the company with evidence will be extremely important, especially if you are outside the realm of normal, expected, or reasonable valuations.
  • There needs to be room for growth: As Brian said, smart investors know not to eat the whole apple. If an investor takes half of the company, what’s left for the entrepreneur?    “The best investors have a very open dialog with founders about a fair valuation and reasonable sized portion”.   Ensure that as you’re putting together your valuation and offer you leave room for growth.

Brian Ellerman’s Bio

Finding Opportunities and Resources to Grow Entrepreneurs (FORGE)
• Inspire and cultivate entrepreneurial thinking (FORGE’d at UA)
• Advance the entrepreneurial ecosystem (FORGE at Roy Place)
• Drive scale-up/launch acceleration (FORGE Ahead)

Angel investor (https://angel.co/brian-ellerman?public_profile=1) in 100+ and advisor for dozens of startups globally. Member of international Together. Health Steering Committee. Serve on various advisory boards, and founded the Tucson STEM Community.

Studied biology, chemistry, and mathematics at Wabash College, earned a BS cum laude in clinical pathology at Marist College, an MS in Management Information Systems from the University of Arizona’s Eller College of Management, Master of Legal Studies (ongoing) at University of Arizona’s Rogers College of Law, and studies toward a PhD in Organization and Management with a Specialization in Leadership at Capella University. Native Arizonan.

Episode Mentions:

  • Books and Papers:
  • Organizations:

Connect with Brian Ellerman here:

Strong investor relationships with Dr. Marty Fox

Marty Fox

Dr. Fox is an active early-stage investor and has assisted numerous businesses by providing capital and guidance. He has also founded several successful businesses and has served at the executive and board level for multiple companies. He is a former adjunct instructor at the Eller College of Business of the University of Arizona and holds a Ph.D. in Educational Psychology.

Marty was extremely gracious with his time and insights, and here are some of his most important suggestions for entrepreneurs:

  • Don’t take money from someone you don’t have a strong relationship with. To support that, here are three tactics for deepening relationships:
    1. Practice empathy – Similar to how you take the time to deeply understand your customers, you should also take the time to deeply understand your investors. Why are they investing? What’s important to them? What outcomes are they after? Do you have the right chemistry to work together for the next decade?
    2. Give consistently, receive occasionally – When we are consistently giving of ourselves it ensures we’re surrounded by a support network that truly cares and wants to see us be successful. Think about times when others have behaved in this way: How did YOU feel?

      “Successful people are always looking for opportunities to help others. Unsuccessful people are always asking, ‘What’s in it for me?‘” – Brian Tracy, Author

    3. Show and prove you think of others – Simply remembering some small detail or important date can deepen those personal connections between two people. Perhaps an unexpected call or text from you “Hey, I was able to apply that suggestion you made to me last week and will let you know how it goes. Thank you!”. Shifting our lens from being constantly focused inward to being frequently focused outward will do wonders for deepening our relationships.
  • Avoid over-diversification – My recommendation for entrepreneurs is that they get uncomfortably narrow about your first early adopter customer segment. The more specific you can get, the faster you can move. To hear a great entrepreneur working through getting specific, check out the Mentor Me Live episode with Aaron Gopp from Patter.

See you next week!

Driving Diversity and Inclusion in Entrepreneurship w/Joann MacMaster CEO of Desert Angels

Joann MacMaster

We have an extremely exciting show today with CEO of the Desert Angels, Joann MacMaster. Joann has served as a startup founder, mentor, investor, and educator. She’s passionate about regional ecosystem development and recently received the Larry Hecker and Sherry Hoskinson Lasting Community Builder Award and this year the 2020 Women of Influence Entrepreneur of the Year Award.

The key lessons for entrepreneurs here are:

  1. Diversity in entrepreneurship is critical because the people and cultures of customer-bases are very different, so the problem-solvers must also be very different in order to understand the challenges people face around the world.
  2. Diversity goes far beyond gender and skin color. There is diversity of backgrounds, skillsets, thought, age, geographic location, experiences, etc. So don’t just think that diversity and inclusion means women and people of color. It’s much deeper than that.
  3. It is unfair to bucket all minority groups into the same category. Women in tech have unique needs and interests different from women of color. Is there overlap? Sure. But to bucket all women into the same category for programs and resources misses the mark. The same goes for all other under-represented groups. Get specific about who is under-represented and develop a strategy to engage them.
  4. As a founder, be sure not to think about Desert Angels as a single entity – many different individual investors and affiliates. Go engage, and learn about the members individually to move your startup forward more rapidly.

Good luck and see you next week!

Connect with Joann MacMaster here:

Shoutouts and Mentions:

Investor Corner: Diamond in the Desert with Mara Aspinall, Bluestone Ventures Managing Director

Did you know that there is more than $100 million worth of capital available to Arizona entrepreneurs right now? Were you aware that Tucson ranks as one of the Top 5 Cities for entrepreneurs, according to Entrepreneur magazine, but it has been a long, hard road. I find it incredible that within the last few years, Tucson has gone from only one or two venture capital firms to over five.

One of those firms is BlueStone Venture Partners where managing partner Mara Aspinall and team are utilizing their “Noses in, fingers out” approach to invest in regional digital health, medical devices and medical diagnostics startups. Their Fund primarily focuses on companies that reside within five key verticals including: Medical Devices, Advanced Materials, Healthcare IT, Diagnostics, and Biopharma Platforms.

As an entrepreneur, I really appreciate Mara’s hyper-focus on startup teams over technology. To create an A-Team you must:

Know your strengths and most importantly your weaknesses. If you can’t articulate these, how will you be able to build a team that has strengths to counter-balance your weaknesses?

Find the right team: these should be people you trust, and that can consistently be intellectually honest with you. These team members should also be highly adept at navigating ambiguity as it’s likely to be all your startup will be facing for the first few years.

After building your A-Team, go “do your homework”. Your goal should be to understand your situation and potential future scenarios enough to anticipate what’s coming. This will help you and the team mitigate the foreseeable errors, and hopefully not worry about the ones you could not have known. Most importantly, get moving and keep moving.

About Mara

Aspinall is a healthcare industry leader and pioneer committed to active civic involvement. She is Managing Director and Co-Founder of BlueStone Venture Partners, a venture fund investing in life sciences technology companies in the US Southwest. She is also Managing Director of the Health Catalysts Group, a consulting firm dedicated to the growth of health information technology and diagnostics firms, publishing the popular Health Catalysts Diagnostics Year in Review. She is a member of the Board of Directors of Abcam plc (ABC), Allscripts (MDRX), Castle Biosciences (CSTL), Orasure (OSUR), and Blue Cross Blue Shield Arizona. Most recently, Aspinall was certified in Cybersecurity Oversight from Carnegie Mellon University.

As President and CEO of Ventana Medical Systems, a billion-dollar division of The Roche Group, (now Roche Tissue Diagnostics) Aspinall led her world-class team to new financial success, more than two dozen major instrument and assay launches as well as global leadership in companion diagnostics.

Previously, Aspinall spent 13 years at Genzyme Corporation where she served as President of Genzyme Genetics and Genzyme Pharmaceuticals. Genzyme Genetics was a leading provider of diagnostic testing and genetic counseling in the oncology and reproductive markets. Aspinall transformed the business from a small specialized player to one of the top five laboratories in the country while setting the industry standard for quality testing. The business was sold to LabCorp for nearly $1billion. Previously, she led Genzyme Pharmaceuticals and its transformation to an international leader in specialized pharmaceutical ingredient manufacturing.

Connect with Mara Aspinall here:

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