Core Insights - AZ-VC has launched its second fund, AZ-VC II, to support innovation outside traditional U.S. tech hubs, building on the success of its first fund, which raised $115 million [1][2] - The firm aims to address the funding gap for non-coastal entrepreneurs, who often face challenges in securing initial funding from coastal venture capitalists [3][4] Company Overview - AZ-VC is a venture capital firm based in Phoenix, Arizona, focusing on non-coastal technology companies across the U.S. [6] - The firm was established in 2022, with backing from Pinnacle West Corporation and other Arizona-based limited partners [1] Investment Strategy - The fund targets Series A investments in companies that are post-revenue with proven product-market fit, maintaining a sector-agnostic approach [3] - AZ-VC's investment entry point offers an average valuation discount of 70% compared to similar coastal companies, aiming to create an arbitrage opportunity [4] Market Context - In 2024, nearly 75% of venture capital was allocated to companies in California, New York, and Massachusetts, despite these states representing only about 22% of the U.S. population [4] - The COVID-19 pandemic has led to significant migration patterns, allowing entrepreneurs to stretch their budgets further in non-coastal areas [4] Portfolio and Impact - The first fund has invested in various regional startups, reinforcing the demand for local financial capital sources [2] - The acquisition of Paradox, a Scottsdale-based company, by Workday highlights the growing regional investment strategies and the potential for significant M&A activity in Arizona [4]