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APPLY. ADVANCE. AWARD. ACHIEVE.ARIZONA INNOVATION CHALLENGE STAGES
Each Arizona Innovation Challenge competition is highly competitive and takes place in three stages. Awarded companies matriculate into the Venture Ready Accelerator, where they can receive up to $150,000 in non-dilutive funding.
All ventures must download and complete an application and financial model template in accordance with guidelines and upload the documents to the Arizona Commerce Authority's Innovation Network (ACA IN). This one-stop shop for Arizona's entrepreneurial ecosystem centralizes education, mentorship, programming, events and resources from across the state and will be used to administer AIC. The application window will remain open for up to four weeks.
First-round submissions will be screened for eligibility and judged by experts from the Arizona business community. The ACA maintains complete discretion in making final decisions regarding a company’s eligibility or ability to continue in AIC. Judges will assess the applications over about a month.
Once all applications have been reviewed, applicants can review the judges’ feedback on the Arizona Innovation Network. Applications that did not meet eligibility criteria, or may not have been deemed competitive enough to successfully continue, will be notified.
Note: The ACA aims to respect the time and effort that companies commit to participating in the Arizona Innovation Challenge. In turn, we expect that applicants respect the time and resources required to host the AIC. Upon applying, applicants should intend to complete all phases of the AIC. However, should a company choose not to participate in a subsequent round of the AIC or the Venture Ready accelerator, a company representative should immediately inform the ACA Innovation Team, providing judges ample time to consider a replacement company.
Judges will select up to 25 companies to continue to the semifinals of the AIC. Companies selected as semifinalists will have the opportunity to update their first-round application materials based on the feedback received from judges or due to any material changes to the business since their initial submission.
Additionally, the ACA will ask semifinalists to submit additional application materials, including a written response to first-round feedback and an investor pitch deck. The ACA will communicate the specificities of the semifinalist application process directly to qualifying companies. Semifinalists will have one to two weeks to submit the requested materials.
Judges will evaluate semifinalists’ submissions over a three-week period and select 15 companies to advance to the final round of the AIC.
In the final round of AIC, companies will pitch their startup to a panel of judges from the business community. Each company’s pitch presentations will be followed by an interactive question and answer session to evaluate company and founder potential.
After every finalist completes their pitch, the judges will confer to select up to 10 companies to recommend as awardees to the ACA. Ultimately, the CEO of the ACA will recognize up to ten finalists as AIC Awardees.
Following this recognition, AIC awardees will matriculate into the Venture Ready Accelerator.
FULFILLMENT AND COMMERCIALIZATION
The Arizona Innovation Challenge culminates in AIC awardees using their funding to commercialize or scale their solution through the Venture Ready accelerator over a 12-month performance period. Generally, AIC awardees must use their grant funds to advance commercialization objectives. In this pursuit, awardees may use grant funds for activities such as standing up strategic initiatives, hiring key employees, expanding sales and marketing efforts, or refining a company’s financial model. Awardees may not use grant funds for certain administrative and overhead expenses, nor may they use them to compensate existing employees and executives.
At the beginning of the fulfillment and commercialization phase, each company will enter into a legal agreement with the ACA, obligating the awardee to various terms of compliance and outlining the criteria for accessing the funds allocated to AIC awardees throughout the performance period. The performance period will be defined by the following funding phases:
- Matriculation: An initial tranche of funding will be disbursed upon the execution of the awardee legal agreement and the completion of other necessary administration.
- Performance Period: During this period, Founders will complete a series of standardized program milestones including a two-week founder boot camp, a series of pitch “panels” and functional “deep dives”. After each milestone is successfully completed, founders will unlock the next block of grant funding for disbursement. Each founder will be paired with an Entrepreneur-in-Residence (EIR) to coach them through this performance period.
- Graduation: A final tranche of funding will be disbursed upon successful graduation from the Venture Ready Accelerator.
Note: The AIC grant amount will not be disbursed in full at the beginning of the Venture Ready Accelerator.
The compliance terms included in the AIC Awardee agreement obligate AIC awardees to report the achievement of key business metrics, allow onsite visits by ACA personnel, and provide additional documentation to the ACA as needed. In the spirit of proper stewardship of state funds, the ACA may withhold grant funds from any company that does not graduate from the Venture Ready Accelerator.
In recognition of awardee’s reporting commitments, the ACA aims to assist awardees beyond providing non-dilutive funding and entrance into the Venture Ready Accelerator. In this pursuit, the ACA may engage in activities including, but not limited to, introducing AIC awardees to other state programs to facilitate continued growth, providing counsel on business issues and best practices, and connecting awardees to outside advisors, service providers and potential investors.
The ACA maintains significant discretion in determining the funding processes and phases during the performance period. Specific milestones and provisions will be finalized in agreements between the ACA and AIC awardees. Additionally, clawback clauses will be included in awardee legal agreements to discourage activities by portfolio companies that would be counterproductive to the ACA’s mission. Activities subject to trigger clawback clauses include, but are not limited to, a company moving their operations out of state, being acquired by a company that moves the operations out of state, or failing to comply with reporting obligations. Companies that do not successfully graduate from the Virtual Accelerator will still be designated “AIC Awardees” and will remain obligated to fulfill the commitments of the awardee agreement.