Factor Fund II
Investor Presentation - 2025
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The Landscape Has Changed
AI and Crypto infrastructure have fundamentally altered the dynamics of company creation
Build Costs Have Collapsed 90%+
What used to cost $5M to build now costs <$500k
Revenue Paths Accelerate
$1M in ARR is achievable with team of 1-3 people in weeks not years
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Addressable Markets Have Expanded
Thousands of previously uneconomical business opportunities now represent exciting, venture-scale ROI
Meanwhile: A team of 3 can now build what took 20 engineers and $5M just 24 months ago.
The model hasn't evolved with the technology
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The Paradigm Shift
AI and Crypto now represent proven commoditized infrastructure that creates an explosion of opportunity at the application layer
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Build Cost Collapse 90%+:
$5M → $500K to reach product-market fit
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Market Expansion:
1,000s of new addressable segments (regional businesses, niche verticals) now represent highly attractive ROI
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Speed to Revenue:
18 months → 8 weeks to first $1M ARR means even ephemeral business models are suddenly viable
Result: Unprecedented opportunity to build an investment platform that capitalizes on this new reality
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An Operator + Investor Approach is Required
The lowered barriers to company formation creates an unfair advantage for GPs who can not just invest in new applications but leverage this technology and deploy it for improved returns.
Track record of seeing market shifts before they become consensus:
2015: HyperScience
Scaled as COO in early enterprise AI, nearly 10 years before ChatGPT.
2018: Two Sigma
Built quantitative analytics platform, Venn, used by 1,000+ allocators with $10T+ in AUM when Excel models were the status quo.
2021: GSR
Led 50+ early-stage investments in crypto and developed institutional DeFi platform anticipating institutional adoption.
2023: Factor Fund I
Launched with prescient, contrarian thesis to back practical crypto applications at market bottom. 17 investments with 4 early markups.
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Factor Fund II Model
Built for How Companies Actually Scale Today
Traditional Model
Passive capital
10+ years to liquidity
Binary outcomes
One size fits all investing
Post-investment support
Our Model
Operator-led growth
5 year DPI targets
Multiple pathways to returns
Flexible capital structures
Pre-investment validation
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One Fund, Multiple Paths to Returns
Consulting OpCo
- Bridge between legacy businesses and latest technology
- Accelerates portfolio GTM
- Early driver of cash returns
Flexible Seed/Series A Investments
- $1-3M checks targeting 5%+ ownership
- AI/crypto applications solving real business problems
- Standard equity plus flexible repayment options for cash-positive companies
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The Consulting Edge
10% of Fund II ($5M) used to capitalize a consulting operating company with multiple benefits to LPs:
Target
>75% of Mid-market businesses are ready to embrace AI, with 2/3 looking for outside help to maximize ROI.
Advantage
We know the tools and how to implement for clear 10x+ opportunities.
Investment Add
Validates and uncovers new investment theses in overlooked markets while accelerating portfolio GTM.
Proprietary Upside
Solutions spawn NewCo incubations with outsized fund ownership - build to client spec, sell x 1,000.
Fund will own 100% of consulting OpCo with all EBIT flowing to Fund.
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Flexible Capital Approach
Fund II is designed to capture upside from both traditional early stage ventures and those uniquely designed for this AI native era of capital efficiency
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Traditional Seed/Series A
- High-conviction stakes in solutions poised for $1B+ outcomes.
- Standard SAFE/equity checks of $500K3$2M, sourced through founders validated by our network
- Aiming for fund-returning MOIC.
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Shared-Earnings Structures
- Capital-efficient businesses financed with a Shared-Earnings SAFE.
- Targets 25%+ IRR via revenue share and an equity warrants
- Delivering early DPI plus upside exposure to breakout successes
The Result: Earlier DPI, Top Quartile IRR, Superior Market Alignment
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Our Investment Focus: Where Others Won't Look
The Opportunity
Thousands of newly viable $100M-$1B segments have opened up that were previously too small or expensive to address.
Result: Companies can achieve dominant market share (30-50%+) in less competitive segments while building sustainable, profitable businesses AND offering investors traditional venture-scale MOIC.
Examples:
Regional franchises (HVAC, home services, auto dealers) - $200B+ combined
Vertical SaaS for traditional industries (agriculture, logistics, manufacturing)
B2B payments for niche sectors (wholesale electronics, specialty imports)
Workflow automation for overlooked professions (frontline workers, field services)
Unfair Advantage - Our consulting work puts us directly inside these businesses, giving us:
- First-hand knowledge of their pain points
- Validation of solutions before we invest
- Built-in distribution channels for portfolio companies
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$50M Raise
Timeline
Initial discussions with anchors underway, first close Q3 2025
Terms
2% Management Fee | 20% Carried Interest
4 year investment period
Access
Co-investment rights, consulting insights, early DPI
Structure
Delaware Feeder (US taxable), Cayman Feeder (non-US & tax-exempt) → Cayman Master
Our Advantages
See Around Corners: Track record of being 18+ months early
Build, Don't Wait: Consulting creates proprietary deal flow
Founder Alignment: Flexible capital matches their actual needs
LP Alignment: Earlier returns through multiple paths
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www.factorcapital.com
Factor Capital Website
We’re experiencing a profound shift in how software companies are founded, developed, and scaled, driven by the rapid advancement of AI models and sophisticated coding tools. Just a few years ago, launching a software startup required substantial capital, extended development timelines, and sizable teams of highly skilled engineers. It typically took months or even years before a viable product reached the market.
Contact
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Appendix: About the Founder
Jake Dwyer, Founder & Managing Partner
Jake Dwyer has over 20 years of diverse industry operating and investment experience, building, and scaling high-growth businesses at the intersection of emergent technologies and practical market applications. Jake has made ~100 investments over the past 10 years, including multiple $1Bn+ outcomes.
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Appendix: Fund I Overview
Ahead of the trend: Fund I focused on commercial applications of blockchain technology with real-world impact. Our average investment is >13 months old with ~1.1x TVPI and 4 early markups.
Example Fund I InvestmentsA:
CoalaPay
Stablecoin efficiency for humanitarian aid funds
3.0x MOIC / 123% IRR
CrunchDAO
Global data-science workforce with blockchain coordination
2.7x MOIC / 261% IRR
Koywe
Solving cross-border payments inefficiencies across LatAm
1.5x MOIC / 31% IRR
375ai
Edge data collection and wireless network
1.5x MOIC / 30% IRR
Dinari
Global platform for tokenized equity
Shield
Neo-banking solution for electronics importers
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Appendix: Fund I Portfolio
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