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PROSPECT'S GUIDEBOOK:
OUR INVESTMENT CRITERIA
 

Setting a Course. To help get you started, here are CenterPoint's guidelines for funding:

     
   

GENERAL CRITERIA
Candidate companies should be privately-held, and develop information technology-based products for CenterPoint's target industries and markets. The founders and management team must bring hands-on, in-depth experience in the company's market sector. Candidate companies must show the potential to quickly establish market leadership and become profitable, and achieve $1B+ market capitalization within several years.

EQUITY and INTELLECTUAL PROPERTY OWNERSHIP
A candidate company, along with its intellectual property, should be privately held preferably by just a few stakeholders. Ideally, a company's intellectual property should be defined, documented and in the patent process if appropriate.

SOURCE
We only consider investment opportunities that are recommended or referred to us by known sources, including: STARTech and other leading high-tech incubators; RHK and other premier industry analysts; angel investors; other venture capital firms; financial and legal service providers; and managers of our portfolio companies.

INVESTMENT STAGE and RANGE
CenterPoint chiefly invests in early-stage private companies at the first- or second- round of venture capital financing. We often act as lead investor in the initial venture round, and will typically invest approximately $5M - $10M per company over 2-3 rounds of funding.

MARKET FOCUS
CenterPoint invests in industries and markets where we can contribute the highest level of expertise and value. We seek ventures that can define and dominate major business-to-business areas by leveraging proprietary intellectual property. Our target investment areas are: communications infrastructure; business software technologies; semiconductor products; and new industrial technologies. Naturally, we favor ventures that complement rather than compete with our existing portfolio of investments. And we avoid consumer-oriented ventures altogether.

MANAGEMENT TEAM
CenterPoint seeks visionary, high-performance founders and managers with in-depth, hands-on experience in their target markets. We have helped our portfolio companies identify highly qualified candidates to complete their management teams.

GROWTH POTENTIAL
A venture company's business model and growth potential should be such that it can realistically achieve profitability within three years, with a strong potential for earning a $1B valuation in the public market within five years. Companies should receive the majority of their revenue from the sales of products, interactive services or technology licenses, rather than from advertising.

INTELLECTUAL PROPERTY
We actively seek investments that possess significant intellectual property patentable technologies, software code, proprietary processes and concepts, or other strategic core competencies that can be used to dominate and defend target markets.

TECHNOLOGY, PRODUCT or BUSINESS?
Intellectual property alone isn't enough to secure funding. Nor is a one-off product concept. Successful ventures must be able to leverage core competencies into scalable businesses that deliver lasting value. Technologies or inventions must have marketable, commercial applications. Product concepts must show the potential to evolve into comprehensive solutions.

TIMING
CenterPoint focuses on ventures whose product or service can make an impact on the market today. We do not invest in pure-science inventions where real-world applications are years away, nor are we interested in entering mature markets that are already crowded with competitors.

EXIT STRATEGY
To deliver a high return on our Fund's investments, CenterPoint and our co-investors will expect to eventually distribute our shareholdings in our portfolio companies to our Limited Partners. To this end, we seek ventures with the potential to trade on the public market via a successful IPO or to merge with an appropriate parent company within five years of funding.

RETURN on INVESTMENT
Within five years, a portfolio company should be able to deliver a ten- to twenty times return on CenterPoint's investment, with CenterPoint retaining a meaningful equity share of 10% or higher for its limited partners.

CenterPoint Ventures: Venture capital from people who have built successful ventures.

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