Arizona Innovation ChallengeANSWERS (FAQS)

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…

Q3: How lar​ge are the grant awards for the Challenge?

Answer: All grant awards are between $100,000 and $250,000 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 between 6 and 15 winners will be named for each competition cycle. That said, experience has shown that the majority of companies that apply ask for $250,000, leading to the selection of 6 winning companies for each competition.

Q2: Does my company need to be within certain industry sectors to qualify for the Challenge?

Answer: Yes. Participants in the Challenge must be in one of the following, broad industry sectors: Aerospace/Defense, Clean-tech/Renewable Energy, Bio/Life Sciences, Information Technology (Hardware or Software), Advanced Materials or Advanced Manufacturing. In general, retail and real estate-based businesses do not qualify, unless the service or product involves a unique technology solution to an industry issue. By statute, companies engaged in any activities that involve human cloning or embryonic stem cell research are NOT eligible to participate. Read more…

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 5 years, which goes beyond just the first 12-month performance period related to achieving milestones 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 winning companies 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.  Most of the winning companies prior to the Fall 2015 AIC competition are held to a 3-year obligation term.  In exchange for the companies’ commitments, it is the ACA’s goal to be a proactive resource to help and assist winning companies 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.