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Future Arizona high-tech startups may get a boost from new sources of venture-capital money.

The Arizona Economic Resource Organization has received $325,000 in state economic-development money to establish an Arizona "fund of funds," a program that raises investment capital from investors and reinvests those funds in several professional venture funds.

AERO's goal is to establish a $50 million fund of funds, which will be managed to attract overall investment of at least $200 million "to commercialize Arizona innovations."

Investors and tech-growth advocates say the state needs "seed money" to help startup companies, including from university-affiliated tech transfers.

"The impetus for all this is the recognition that Arizona is blessed with some very cutting-edge technologies, emanating in large measure from the university system," said Larry Hecker, a Tucson attorney active in local economic-development efforts and an AERO board member.

"There is tremendous potential for commercialization, and it translates into jobs and a stronger economy," he said.

Hecker co-chaired the non-profit AERO committee to search for venture funding with Bill Hardin, an attorney with Osborn Maledon in Phoenix.

AERO will serve as the catalyst in establishing an Arizona "fund of funds" to increase the size of the venture capital industry in Arizona during a two-year period, organizers said. The Commerce and Economic Development Commission gave AERO $325,000 to stimulate the formation of the fund.

About 40 other states each have a fund of funds, Hecker said, but not Arizona — until now.

To qualify for an investment from the fund of funds program, each target venture fund must satisfy certain criteria, including a requirement that projects invested in must be headquartered in Arizona or have a main office here.

Participating funds must agree to match the initial monies on a 3-to-1 basis.

"The partners on this project are committed to enhancing Arizona's global competitiveness by accelerating the pace of discovery, innovation and technology business development," said Jan Lesher, director of the Arizona Department of Commerce.

Tucson is seen as a key area for the state's biotech growth, and its startups have benefited from venture funding. One such company is Oro Valley-based Ventana Medical Systems, founded in 1985 by Dr. Thomas Grogan, a University of Arizona pathologist, and specializing in cancer-tissue testing. Ventana's value was highlighted earlier this year when Swiss Roche Holding AG bought it for $3.4 billion.

Meanwhile, venture-capital deals were on the upswing in Arizona in the first quarter.

Arizona companies attracted $80 million in venture capital on six deals in the first quarter, after attracting about $205 million on 28 deals in all of 2007, according to the MoneyTree report by PricewaterhouseCoopers and the National Venture Capital Association.