CenterPoint For Entrepreneurs
 Investment Criteria
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 Frequently Asked Questions


Our Investment Criteria

CenterPoint considers the following criteria for funding our portfolio companies:

General Considerations
Candidate companies must show the potential to quickly establish significant revenue, develop defensible market leadership, and achieve at least nine figure valuations while becoming profitable within five years.

Sector Focus
CenterPoint invests in industries and markets where we can contribute the highest level of expertise and value.  Our target investment areas are the following: communications infrastructure including wireless, enterprise software and business applications, semiconductors, hardware, and Internet-enabled business models. Naturally, we favor ventures that complement­ rather than compete with­ our existing portfolio of investments. 

Geographic Focus
 We concentrate our investment activity in Texas and the surrounding Southwest region.  Given our commitment to meaningful partnerships with our management teams, CenterPoint believes that such relationships are best maintained through close geographic proximity.    We do, however,  continuously evaluate investment opportunities on a national basis as we look for high quality opportunities that best match our investment criteria.

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 we will typically invest between $5 million to $15 million per company over two to three rounds of funding.

Corporate Structure
A candidate company should be privately held — preferably by just a few stakeholders.  We prefer to fund candidate companies which are corporations as opposed to limited liability entities.

Board of Directors
To effectively support the management team, CenterPoint requires an active role on the candidate company’s Board of Directors.

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 based on the assumption of profitability within three years, with a strong potential for earning a $1 billion 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. Ideally, a company's intellectual property should be defined, documented and in the patent process, if appropriate.

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.

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 five to ten times the return on CenterPoint's investment, with CenterPoint retaining a meaningful equity share of 10% or higher for its Limited Partners.