Not long ago, there were just five or six incubators and accelerators in Arizona.” Arizona Commerce Authority CEO Sandra Watson looks up to the ceiling in her office, she’s running the numbers in her head.
“I think we now have close to 50 active in the state — plus collaborative workspaces, too.” For the entrepreneur thinking about starting a new company, Arizona has a better business climate than just its golf courses and sunshine.
The metric is not precise, but there may be no state in this country that does as much for new business’ growth than Arizona. Local governments, regional economic development organizations, the three state universities, community colleges, and the Arizona Commerce Authority all offer programs designed to grow successful companies.
While AZ Commerce business attraction wins have garnered much news and talk, the quasi-public agency has an equal emphasis for existing business expansion and new business startup. The agency offers a full menu of incentives, programs and innovation assistance for Arizona businesses.
“Those big moves by companies like Apple draw attention to Arizona from business leaders around the world,” says Watson. “That kind of attention is good for our companies to market products globally.”
The state and its regional economic development agencies are focused on building export businesses and increasing the number of high paying jobs in the state. An export business is a business that ships the majority of its services and products outside local borders. Its result is money coming back into to be recirculated and grow the Arizona domestic product.
Brian Sherman, Arizona Commerce Authority’s senior vice president of business development, heads the team that deploys start-up programs. This isn’t just a toolbox for new business, Brian has the key to a garage filled with programs designed to scale up new companies.
“When we help a business grow roots in Arizona, we’re building the future of our corporate community,” says Watson. “Our programs are designed to help a business from its early start-up stage into the marketplace to compete.”
“We have a number of different programs,” explains Sherman. “We’re seeking companies ready to move up. Although we can help a very early stage start-up, we are looking for a business that has formed a company. They have to have two employees, a product concept and a business plan.” Under the “Start Up” tab at AZCommerce.com, there is a menu of incentives and programs for new business—see the “GETTING STARTED” for the list.
Arizona offers an angel investment tax credit. This incentive program for home-grown start-ups and entrepreneurs essentially reduces investors’ risk by 30 to 35 percent. This offset encourages angel investors to open checkbooks.
Getting an investor to sign that check takes a lot of effort and AZ Commerce’s business development unit has a program for that. “Newly-formed companies and small businesses may not be able to afford expensive consulting advice,” says Sherman. “What we’re doing is helping them become venture-ready by offering technical and business assistance and advice they can’t afford.”
It’s a practical MBA, Sherman says. In some ways, it’s a preliminary reality check. With the program, Commerce engages the business community and establishes mentor relationships in front of making presentations to angel investors or venture capitalists. The same process can be used to help businesses compete in the Arizona Innovation Challenge, a state-funded grant program to help businesses get a product into the marketplace. This is for businesses doing research and development but more in the ‘D’ stage than the ‘R’ stage.
“There are steps to make this work,” explains Sherman. “Businesses need to ‘certify’ in order to qualify for some of the programs. We offer a research and development tax credit that is similar to federal programs and small business grants that connect with federal funds. We have lending assistance programs to help close the loan gap and structure debt for a company.”
The tools stacked in Sherman’s garage are different for each business stage. The agency’s technical assistance has one primary goal in mind—move the business into the marketplace. Arizona wants its new companies to grow and hire people.
A business person with an idea for a new company should call the Commerce Authority. Types of businesses for which there are many open doors are those associated with technology, aerospace, health care, and bio and life sciences. That’s a wide playing field, and Watson says there are no closed doors for business who want to talk to the Arizona Commerce Authority about growth and expansion.