ARIZONA’S STARTUP CAPITAL ACCELERATOR
Activating a pipeline of diverse and experienced startup investors passionate about supporting Arizona startups.
Capital Gravity Arizona is a statewide “capital accelerator” program that attracts and prepares high net-worth individuals to make (and startup founders to raise) their first ever seed-stage investment. Capital Gravity’s powerful model is designed to increase the number and diversity of investors and improve the quality of deal flow in Arizona’s ecosystem.
Capital Gravity’s unique program model helps grow Arizona’s economy, improve returns to Arizona investors, improve the quality of deal flow, expand access to risk capital for Arizona’s growth startups, and help remove structural barriers faced by under-represented communities trying to participate in the technology, startup and investment ecosystem.
The superpower of Capital Gravity begins with the integration of founders, funders and fund managers, who all participate in a unified “learn-by-doing” cohort experience. Community and experiential learning form the foundation for every Capital Gravity cohort.
Have more questions? We recently participated in an interview with the John C. Scott Show and an information session with statewide partners.
Through Capital Gravity’s unique program model, participating investors and entrepreneurs learn together. Participating investors “learn-by-investing” while the entrepreneurs “learn-by-raising”. Over time, Capital Gravity helps grow Arizona’s economy, improves returns to investors, and strengthens the quality of startups.
FORM A COHORT OF ASPIRING INVESTORS
Each Capital Gravity cohort consists of 20-40 accreditable Arizona investors working together to actively learn how to vet companies, provide feedback, and perform due diligence in helping to support early-stage companies.
The program consists of a kickoff weekend of education and networking plus 10 weeks of structured investor meetings including company reviews, founder pitches, and due diligence.
Participating investors need to be committed to attending weekly sessions. While occasional absences are understood, the value, both individually and for the collective cohort, is derived from active participation.
INVEST IN THE COHORT’S MEMBER MANAGED SEED FUND
The investors in each cohort purchase one or more units in the fund. The invested capital is pooled to create a sizable seed investment for the selected company.
The cost to participate in Capital Gravity Arizona as an investor includes:
SCREEN APPLICATIONS FROM ARIZONA STARTUPS
After completing the initial kickoff weekend, Capital Gravity participants meet regularly over a 10-week period to learn about investing, review and evaluate startups applicants, conduct due diligence, narrow the applicant pool, and ultimately, select one company to receive an investment.
The screening process includes 5 phases:
INVEST THE FUND’S CAPITAL INTO AN ARIZONA STARTUP
The wider community is invited to a grand finale where they can watch the final 6 companies make a final 5-minute pitch to investors.
One day before the finale, investors, and finalists meet to answer any final questions at a VIP reception.
After watching the final round of presentations, the investors do their final deliberation and announce who will take home the winning investment. The winner of Capital Gravity Arizona is publicly presented with a ceremonial check at the closing of the event. Investors may also choose one or more runner-up companies.
By operating the CGA program annually, over time, our state can not only grow a strong pipeline of new startup investors, but, by integrating an effort to develop prospective fund managers, it also unlocks the ability for alumni to create and grow new funds to support the region.
We anticipate Capital Gravity Arizona can produce transformational impact on Arizona’s innovation ecosystem over the next 5-10 years by activating first-time startup investors, launching new seed-funds, attracting new growth capital into our ecosystem, enabling women and underrepresented minorities to become accredited investors, and providing access to the our programming, funding, networks and resources to people all across Arizona, especially in the rural areas outside the major cities.
Capital Gravity Arizona funds early-stage companies seeking investment of $100k – $1M.
Eligible companies must:
Additionally, successful startups will mostly likely have:
Final schedule details are being finalized now, but an active CGAZ Investor participant can expect to attend the full 2.5 day kickoff weekend and commit 50+ hours over the course of the subsequent 10 weeks to the program. The program runs from April to June 2022.
These key dates are tentative and subject to change.
The cost to participate in Capital Gravity Arizona as an investor includes:
FUND INVESTMENT
The $5000/unit investment is used to establish the CGAZ cohort fund. These funds are managed by the fund member-investors and serve as the source of funding for the final investment.
FUND FEE
The $500 one-time fund fee is paid by each fund member, and is used to provide a budget for the fund to pay for operational fees, including legal, administrative, and other necessary fees.
PROGRAM FEES
The $1500 program fee is paid the host organization (Next Foundation, a 501(c)3 educational non-profit) to cover the costs of administering the Capital Gravity program including education, operations, event venue, catering and other staffing costs.
The terms of the final investment are negotiated through the course of the Capital Gravity program, by the voting investor-members of the cohort.
The SEC posts updated information about the definition of an accredited investor HERE.
The most common certifications come in the form of the following definitions:
Net worth over $1,000,000, excluding primary residence value, either alone or together with a spouse
OR earned income that exceeded $200,000 in the past two years, and reasonably expect the same for the current year
OR combined earned income with a spouse that exceeded $300,000 in the past two years, and reasonably expect the same for the current year