Q1: Do I have to be located in Arizona to apply to the Innovation Challenge?
Answer: No. While the vast majority of companies that apply are Arizona firms, it is possible to be located outside of Arizona when you apply, as long as you plan to relocate or build operations in Arizona, including commercializing your products/services here within the 12-month award period. Read more.
Q2: How large are the grant awards for the Challenge?
Answer: All grant awards are up to $150,000 each, as requested by each company when they submit their application. Given that each competition (a spring and fall cycle every year) awards up to $1.5 million, for a total of $3 million per year, that means that up to 10 awardees will be named for each competition cycle.
Q3: Does my company need to be within certain industry sectors to qualify for the Challenge?
Answer: Yes. The AIC competition culminates in the awardees using grant funding to commercialize or scale their product or service over 12 months. AIC grant funds should be viewed as working capital tied directly to furthering the business - such as developing and executing strategic and tactical initiatives, capital expenditures, sales/marketing activities or hiring new people. Grant funding will generally not be used to pay for administrative and overhead expenses, or to compensate existing executives or employees. Each awardee company and the ACA will enter a into a legal agreement obligating the company to various terms of compliance, including the 12-month performance period related to receiving all the grant funding.
For more information, review the Challenge stages.
Q4: Are there limitations on what the grant awards may be used for by the winning companies?
Answer: Yes. It will vary by each company, but in general, companies must justify how they intend to use the funds, which must be directly related to commercializing or expanding the sales of the company’s service or product over the 12-month period following the award. Grant funds may generally not be used to pay for certain administrative and overhead expenses, or to compensate existing executives or employees. Specific negotiations will occur between each winning company and the ACA to agree on the individual milestones that must occur in order to receive the full award funding via defined tranches over the 12-month period. These milestones and funding details will be contractually finalized and then tracked over time by the ACA for compliance. In other words, the full amount of the grant awards will NOT normally be provided to a winning company upfront. Rather, the funds will be defined over the duration of the 12-month commercialization period.
Q5: Does an AIC winning company have obligations to the ACA beyond receiving the grant funds?
Answer: Yes. Each winning company will sign a legal agreement with the ACA that will obligate the company to various terms of compliance for a total of five years, which goes beyond just the first 12-month performance period related to achieving five milestone panels, graduating from Venture Ready and completing receipt of the grant funding. This continued compliance includes reporting the company’s achievement of key business metrics, allowing onsite visits by ACA personnel, and facilitating the review of key documents as needed. There will also be certain “clawback” clauses that will come into play to discourage certain activities by awardees that would be counter-productive for the state of Arizona – to include, but not be limited to, moving the company’s operations out of the state, or being acquired by a company which moves the operations out of state and/or does not comply with reasonable reporting requirements. In exchange for the awadees' commitments, it is the ACA’s goal to be a proactive resource to help and assist awardees to be as successful as possible – including, but not limited to, introducing the companies to other ACA programs and resources that may help them at various phases of their lifecycle, providing advice and consultation to help them overcome issues and grow their businesses, and to provide introductions to outside service providers. As such, AIC winning companies become portfolio companies of the ACA, and are managed accordingly.