Membership and Benefits

What is Arizona Tech Investors (ATI)?

We are an angle investing group based in Arizona. We invest in startups with clear financials, a strong vision and management in which we can believe.

What is Angel Group?

An Affiliation of Accredited Investors who, as a team, research and invest in the best start-ups companies.

What is an Accredited Investor?

A Person that has the financial sophistication and meets certain financial requirements* to buy and sell unregistered securities (members self-certify)

– Networth over $1M, excluding primary residence excluding primary residence (individually or with spose or partner (members self-certify)

– Income over $200,000 (individually) or $300,000 with spouse or partner) in each of the two prior years, and reasonability expects the same in the current year.

What is The Overarching Goal of ATI?

To earn adequate risk-adjusted-return on our investment dollars.

ATI Members

98 members as of 3-18-25

How is ATI Organized?

As a 501(c) 6

Who Leads the Group?

Bob DeLean is the current Executive Director. He serves at the pleasure of the 7- member Board of Directors. He can be reached at: [email protected]

Where Does ATI Invest?

We currently have 45 live startups in the portfolio which breakdown:

SaaS (software) – 25%,

Medtech – 20%,

Marketplaces – 9%,

Hardware – 9%, Therapeutics – 7%,

…and Other – 20%.

We maintain a good balance. We are not a fund. No single member has invested in all 45.

What is Our Sector Focus

About 50% of ATI members are doctors, medical device or FDA types. As a result, about 50% of our deal flow is medtech/bio and 50% in Software/Hardware/Deeptech (basically everything else). We are membership driven, and each member determines which deals they’d like to participate in, but we like variety.

Are There Sectors Where ATI Doesn't Inverst?

Yes; Real Estate, Crypto, Precious Metals, BioPharma. No hard and fast rules, but we like businesses that have a moat, are capital efficient, can scale, and get to an exit in 3-5 years. We’ve mostly stayed away from businesses needing a ton of capital or that have extremely long time horizons to exit.

Our Meetings

Generally, 4-6 in-person (hybrid) meetings per year and many more that are Zoom only. We try to see 2-4 new (pre-screened) ideas at each member meeting.

Who Picks the Ideas That Advance to the General Membership Meeting?

We have an 11-member screening panel for BioTech, and an 11-member screening panel for everything else (SaaS, Hardware, Deeptech, etc.). This provides a balanced perspective with domain experts on each screening team.

What is the Process for Startups?

The most common steps are outlined below. Applicants may drop out of the cycle at any stage, generally due to a lack of further interest by our members, or red flags that we uncover. We take screening & due diligence seriously. General Steps in our Startup Funnel:

1) Initial review of pitch deck, if a fit

2) Encourage an application in Dealum (the platform where we manage the funnel)

3) 11-Member Screening Committee sees a ‘pitch’, if interesting…

4) Pitch to general membership, with interest…

5) Deeper dive (1 hour Q&A), with interest…

6) Due Diligence Team Formed

7) Due Diligence Memo Written (2-3 weeks) & circulated

8) Call for commitments

9) Form an SPV and fund the company

What is Our Investment Vehicle? - SPVs

ATI forms a special purpose vehicle in the form of an LLC to invest in each start-up. As a result, our members can invest as little as $5,000 in an opportunity via our SPV. This also leads to us being a single entity on the company’s cap table, which founders really like.

Any SPV fees? No upfront fees currently, but this is under review. Tax expenses withheld up front. When an investment is successful, the operating manager earns a 5% carried interest above returned capital to cover formation documents, updates, K-1s, structural changes – it’s a lot of ongoing work.

What is the Average Investment in a Single Company?

$12,000 – $15,000 is average with a range from $5,000 to $100,000 per member.

Investment Requirements: None. We are searching for members that want to engage. That is; show up for meetings, participate in the screening process & contribute to due diligence. Members excited about the entrepreneurial/capitalism process; and yes, ultimately invest. However, we never pressure members to invest; It’s always an individual decision. We hope that members will be active & invest.

What are Some of ATI's Recent Investments?

Joylux V*

$215,000

Perceptive Medical II**

$252,500

Bold Street

$112,200

Pneumeric

$187,500

Lenoss

$219,500

Salt Athletic

$558,000

Delta Development

$149,000

*This is the fifth investment in this start-up

**This is the second investment in this start-up

What are Some Recent Success Stories, Failures?

In September 2024, we were offered the opportunity to sell our position in AZ-Based Virtuous Software, a B2B Saas platform for charitable giving organizations. ATI held the investment in preferred stock for 5.4 years, qualifying the investment for the 1202 SBQS tax exclusion. Our members earned a return of 13.6x or a 56% IRR.

This is a risky asset class, in April of 2024 Aural Analytics was sold in a prepackaged bankruptcy resulting in a zero for our investors. You can expect about 70% of start-ups to fail, which is why put such an importance on due diligence, driving our desire to do better than those statistics.

What are ATI's Dues?

$1,750/yr (single or couple; no extra for a spouse). $1,500 out of state (virtual)