2X Alpha: Frequently Asked Questions
Ready to take action? Become a sponsor of 2X Alpha and be a part of the entrepreneurial change of Strategic Growth and Acceleration™ Capital today!
Who is this Program Specifically For?
- Ambitious Growth Entrepreneur Business Builders Interested in Making an “Investment”– If you are currently earning low seven figures with desire to scale to eight figures and beyond, but you are willing to make a small investment for a 2X royalty redemption on your initial investment as well as membership, this is for you.
- Growth Entrepreneur-Focused Strategic Resource Partners Interested in Making an “Investment”– Coach, consultant, advisor, thought-leader, service provider, agency, mastermind facilitator, guru, etc.
(Focus on helping eXponential business builders (#1 above as core client avatar) profitably scale & grow, marketing, advertising, strategic guidance, business development, HR, systems, operations efficiency, IS/IT, data, training, etc.)
- Entrepreneurial Capital/Funding/Finance Related Professionals Interested in Making an “Investment” – Involved in funding, capital and finance for growth entrepreneur ecosystem – dissatisfied with current options with unaligned framework & design.
(Fundability resources, loan matching, broker services, training, finance/funding related service offerings, products, strategies and programs related to capital, funding, finance and investing into and from entrepreneurs)
What Exactly is an ALPHA Test and What's the Purpose of 2X?
What is Kahuna Capital and What is Unique?
Kahuna Capital is an entrepreneur centric (entrepreneur focused) value-added aggregation platform and ecosystem related to all aspects of strategic growth and acceleration capital for ambitious entrepreneur business builders. Kahuna Capital, in conjunction with Kahuna Accounting provide entrepreneurial managed services related to accounting and finance.
Our vision as we develop is to create a combination of ecosystem support and value added strategic aggregation to all things related to capital and utilizing Kahuna Accounting as an aligned Dynamic Guidance Acceleration Accounting service provider to connect, coordinate and provide systems of calibrated alignment between the entrepreneur business builder and their mission, vision, drive and entrepreneurial ambition.
Additionally, our vision is the same alignment and coordination systems with accounting at the center between the entrepreneur and their leadership team as well as to their strategic advisors and service providers.
What Am I Purchase and What Do I Receive?
1. 2X ALPHA 1.0 – Sponsorship
Our mission is to organize, test, and develop a unique model of strategic and growth capital for entrepreneurs through this 2X Alpha program.
2. Founder & Legacy Membership – Kahuna Capital
Your sponsorship of 2X Alpha will earn you membership in our Legacy group by Kahuna Capital. Your membership level will depend on how much you sponsor in this program (no less than $2,500 and no more than $25,000). We will provide information and share what worked as well as what didn’t. We will create a framework at the conclusion of this program that can be utilized in the future by Kahuna and it’s members to raise Aligned Strategic Growth Acceleration™ Capital.
3. 2X Royalty Redemption
As soon as we receive a 3X return by redeploying the money we raise in this program.
When is this Program Live? How Long Will it Last?
If you want to become a sponsor and “invest” in 2X Alpha you should act now by called (309) 828-3466.
Below are details on when you can invest in 2X Alpha and when we close the investment period, when the program starts, etc.
Program Launch: Official open enrollment & qualification for participation starts 3/30/2020
Official program close – end of business day 05/29/2020
Open Enrollment Period: First of either an approximately 60-day window or the full subscription of all 100 available SPUs
Program Start: June 1, 2020
Program Duration: Not LESS than 1 (one) year and not more than 4 (four) years. Once Kahuna receives a 3X of the investment there will be a payout of your initial sponsorship as well as your 2X royalty redemption.
Why is Kahuna Doing This?
We are excited about undertaking as well as “learning, living, and sharing” our open-architecture journey of exploration, experimentation, discovery, and documentation for relatively small asymmetric (low relative risk with potentially significant upside value) investments inside our existing low seven-figure growth business – new in one sense (Kahuna Accounting and Kahuna Capital) but single ownership and core infrastructure in existence for more than two decades.
We are excited to test and apply lessons learned to our existing business model and to develop new relationships as well as other aligned parallel business opportunities within other business units of Kahuna Business Group, Inc.
We will learn new discoveries, have an opportunity to develop new systems, policies, procedures specific to Kahuna Capital that we will be able to apply to and provide value for others in the future.
We will better understand the risk factors involved as well as the ability to test and prepare for an entrepreneurial application of risk mitigation.
Full disclosure – We very much hope to develop new relationships with participants that become members as well as solidify and enhance existing relationships to pre-seed more traditional as well as experimental future internal investment opportunities.
While we may certainly desire to utilize the traditional bank lending or other finance vehicles, it will be nice to have a trusted group of peer entrepreneur capital investors and capital deployers all with the right of first refusal to participate in future experiments and opportunities.
We’ve been candid throughout, but you should know it’s not our primary objective at this phase, knowing we have a strong and aligned capital network would mean we would not be forced to go back to traditional mercenary capital. That situation does have a strong appeal.
Does Kahuna Provide Funding or Lending to Entrepreneurs?
No, but as a member of 2X Alpha you’re going to be part of a strategic alliance of people and you will receive information from us that will help you. Our vision is to use accounting as a strategic guidance system to help you grow your business, to break through barriers, in which 2X Alpha data will help us develop that system further for your future benefit.
2X is 100% Return – Even as a Royalty – How or Why is this Better Than Regular Funding?
Assume you have a group of aligned strategic entrepreneurial benefactors who not only believe in you, but as successful entrepreneurs themselves with a wide array of available expertise and resources pooled their money and offered you $1M with only the following stipulations:
Invest it strategically (and prudently) in your business and pay no payments until you achieve a 3X internal return – or a recurring revenue cash flow equivalent.* At that time your entrepreneurial benefactor investors only ask for a 2X return on their investment.**
Once the 2X royalty is repaid, there may certainly be more future opportunities – BUT there are no further liabilities or obligations. You are free to enjoy the long-term and ongoing fruits of that initial investment and you are free to develop and grow your business as your vision and passion compel you.
*Instead of pulling all the money out of cash reserves to repay your obligation, you choose could utilize the new ongoing cash flow to fund all or part through a now available traditional low interest loan to repay the royalty to your benefactors.
Why Should I Consider Participating in this Program?
If you fall into one or more of the categories provided earlier, there will be significant value and benefits to participation. The 2X (200% of purchase or 100% ROI) should NOT be your only reason to participate. This is an experiment and an R&D test to start a program in a unique niche of a niche of a niche related to capital & funding for growth entrepreneurs. It won’t be perfect, but it will be very good — and together we can continue to refine and improve.
Why $2500 as a Minimum Participation Level and $25,000 as a Maximum Participation Level?
Our objective is an asymmetric risk and reward balance. $2500 as a minimum provides a very low threshold for stakes but is NOT inconsequential. $25,000 is typically the minimum threshold for normal or standard individual angel investor. Although this is NOT an investment from a finance perspective, it is a consequential level of aligned and committed participation. In addition to the 2X royalty from $25K to $50K within a relatively short period of time, $25K as the Partner Participation level provides us with an aligned and committed advisor to help us make the very most of this first experiment. This level also assists us if we have strategic decisions to make and would like to provide options for feedback – as a courtesy and not obligation.
$25,000 is a significant sum of money, but it is also a relatively small sum for the upside value and future benefits beyond the 2X royalty return as we learn and as we develop this program to new and improved levels.
Will There Be Other Opportunities to Participate in the Future?
Absolutely. There is no need for fake scarcity or any unnecessary pressure. We are more concerned the right people at get involved at any level and there is no pressure to go all in to 10 units.
At the same time, if you believe in the program and trust Kahuna will do right, why would you not want to maximize your purchase and commitment to new and unique expanded future opportunities.
How Risky is This?
Is This a Security?
NO! It is a purchase of a program sponsorship and membership. There is a reward component designed to mimic a significant return on investment, but it is actually a royalty redemption for 200% money back as gratitude for initial sponsorship.
Additionally – Although we do not yet have everything developed for the full value-stack related to the membership value (Founder and Legacy), we are confident in providing significant entrepreneurial value to all members. All membership rights and ongoing value will continue in perpetuity as a Legacy Member benefit.
Why 2X (100% Return)?
Candidly, 2X was a consensus choice from our team related to a risk/reward profile substantial enough in value and low enough in risk to construct this initial offer. If it were just to raise capital for Kahuna initiatives, there would be significantly MORE and BETTER choices than 100% in less than 4 years.
For context, however, for us to provide a royalty return out of gratitude and appreciation for people who trust us and believe in us through this “So Crazy it Just Might Work” living R&D experiment… We are thrilled with the opportunity to invest forward and to cultivate an entrepreneurial peer community to make the program better at every iteration. “A Rising Tide Lifts ALL Surfboards!”
Why Should I NOT Participate?
Two specific thoughts:
- If you do not feel a kinship with entrepreneurs or participate in the entrepreneurial ecosystem, you might not want to participate. 2X return within 4 years is close to an equivalent of 19% per year, but that is not a valid reason alone to participate.
- If you are frightened by the risk — Although we have done our best to mitigate and reduce risk as much as possible, there is still a risk and there is a chance we could fail. We anticipate some less than optimum results within our tests and even some internal failures and yet still plan and anticipate making good on our macro goal of 2X as a royalty for our sponsors.
If you are nervous or do not trust us or if your purchase will limit or negatively impact your life if it is lost, then please do NOT participate.
What is the Tax Treatment for Gains and Reporting to the IRS? Tax Ramifications
First and foremost, this is a purchase with membership. When there becomes a royalty redemption we will provide full documentation for you to share with your tax strategist or tax preparer who can help you determine what and how much (if any) would be taxable in the year the royalty redemption is provided.
There is NO interest accruing or any investment related activity for this purchase. If guidance or other applicable information becomes available, we will proactively share it and do our best to ensure this is also part of our “learning, living, and sharing” protocols.
Why $250,000 -- Rather Than a Larger Capital Raise?
Is This Personally Guaranteed?
What is My Recourse if Things Don’t Work Out as Planned?
We anticipate things will NOT go according to plan… they almost never do. With that understanding, we commit to open and candid communication with all related and involved stakeholders. If things go askew or are far away from our initial planning, we will initiate proactive communication protocols to share information and do the best we can with each individual relationship and situation. There are no rights or remedies waived or forfeited for participation in this program, so in the event of a situation devolving into an adversarial nature, all rights and remedies are an option. We will do everything in our power to communicate with any and all issues to all as a partner in this program. We pledge to be proactive, provide respect and full candor at all times.
Is This for Accredited Investors/Do I Need to Be an Accredited Investor to Participate?
Why Doesn’t Kahuna Just Borrow $250,000 From a Bank or Other Type of Lender?
What is an ALPHA Test -- As Opposed to a Beta Test?
What is Exponential Versus Incremental?
What is Asymmetric Risk Versus Risk?
In any new endeavor, there is always an element of risk. Most people mistakenly think entrepreneurs are reckless risk-takers when that is actually not true at all. Most entrepreneurs perhaps have a risk tolerance greater than others, but they also seek to have risk mitigation strategies in place for when things do not go according to plan.
One strategy is in the structure of “Asymmetry” and designing the situation to have the smallest downside exposure while still having a significant upside potential.
Why this Method Instead of Traditional Funding?
We believe in entrepreneurship and we believe entrepreneurs are heroes! Entrepreneurs struggle with quality aligned capital choices at every stage of growth. Even successful entrepreneurs who can qualify for normal or traditional accounting still struggle with the right amount and availability and timing and tradeoffs related to strategic growth and acceleration capital. We believe there is a better way and a better system. Although this ALPHA Test is only one part of a small subset of strategic growth and acceleration capital and it is only testing a small number of variables and variations, we believe it is a great start.
Although traditional funding might be better for working capital and other normal capital needs, we want stakeholders who resonate with our vision and who are aligned with our mission to serve entrepreneurs. This opportunity to essentially be in the foxhole with other aligned entrepreneurs who are willing to trust us to do our best, correct and make good on our failures and to possibly provide guidance and feedback to improve for the future is worth so much more than just a low-interest rate.
Entrepreneurs serving other entrepreneurs as part of a balanced value exchange on both sides of the entrepreneurial capital equation is exciting. Traditional funding has its place, but this is NOT it.
What Prevents You From Sandbagging to Engineer a Specific Result?
Full Candor – while we have much to learn and attempt… 100% we are planning to sandbag any place or opportunity we can to engineer a successful result in as fast a trajectory as possible. There is NO value or valor in the painful scenic route when there is a direct route ahead of us.
We aim to do everything in our power to conquer this goal. We also know with first-hand knowledge there is nothing easy and there is no victory without some loss and without unforeseen surprises to learn from.
This is a “learning, living, & sharing” research and development experiment… one we secretly plan (but absolutely cannot promise) to overdeliver on in every way. IF this happens… great, please accept my sincere apology for a boring path to a 2X return. We’ll do our best to make future tests more exciting and colorful. 😉
How Could You Possibly Achieve a 3-5X Return (Or Even Significantly More) in 2-4 years (Or Considerably Even Sooner)??
Rather than answering this one too directly, please indulge me in a quick thought exercise. Assume you have a marketing program you feel good about generating 2X return. (Certainly NOT this crazy 3-5X or even more stuff)
So – you have a program where for every dollar you invest, you generate $2. A little more pedestrian, but I’m sure you can get your head around it. (If you can’t, you are definitely NOT right for this program).
2X return is NOT nothing, but it is certainly not heroic. Stay with me for this… what happens if you can do this 2X exchange two times in a year. What would your effective internal ROI on this program be? What about 3 times/year or once a quarter and 4 times/year??
Still, think 3-5X (or even significantly more) in 2-4 years (or considerably even sooner) is crazy?? – Askin for a friend. ; )
What is Kahuna’s Specific Plan for Internal Investment to Generate the 3-5X Return Within 1-4 Years to be Able to Repay a 2X Royalty?
We are going out to innovate and test new things and then to optimize. As we innovate, we’ll pick the things that work best and then we’ll try to optimize them through testing. We would have a hard time telling you the exact path we’re going to take. This money is going to allow us to be flexible and agile as we go through this program. For that reason, we’ll report to you what we do after it’s been tested.
We do have advisors and people we trust who have been read in on our plans. We also have other trusted peers and mentors providing some strategic guidance to us on this epic
- We actually have four specific plans – kind of like four teams in a championship bracket. We have two programs focused on Strategic Innovation — like new program enhancements and offerings, business development, marketing and channel augmentation. In the opposite bracket, we have two programs focused on Strategic Optimization — like infrastructure improvement and system enhancement to get “more juice from the squeeze”.
There are many factors in consideration for this program beyond a simple internal ROI and we feel it is incumbent upon us to provide leadership in this and be fully responsible regardless of the success or lack of success of any of our best intentioned planning.
Isn’t This Program Basically Just Crowdfunding?
It most definitely is. And it most definitely is not. There are certain elements we borrowed from crowdfunding.
However, one of our objections is to d a community of like-minded entrepreneurial peers on an ongoing long-term relationship with our entrepreneur business builders.
Although there are certainly distinctions and differences from what we are doing, it essentially is an entrepreneur peer backed crowdfunding campaign.
How Will You Know When the Test is Successful and When Will the Program Trigger a 2X Return to Me?
In a traditional model and might look like this:
We receive $250 and investing in $250K of widgets to resell to the highly in demand and very hungry widget market. We enhance our widgets and sell them to ultimately create $750K of revenue. We then return the original $250K as COGS (cost of goods sold) as well as additional $250K as an Expense (Royalty Rebate). Out of the remaining $250K, we retain whatever is left over after other expenses to retain and redeploy for continued growth and expansion.
It will NOT look like that nor ever be that clean and simple. We will do our very best to benchmark and record all of our efforts and activities. We have specific plans to strategically invest the capital into two different programs within the category of Strategic Innovation and we have two programs intended for Strategic Optimization initiatives.
Whenever we achieve either a 3X internally or a sustainable ongoing residual cash-flow significant enough to borrow a portion of the funds necessary to repay 2X and still be net positive, we will look to expediently (and excitedly) return 2X to our program sponsors.
Our situation is unique in that we have motivation to keep and redeploy the capital for as long as possible… even to the end of the fourth year before returning the 2X royalty redemption to our sponsors.
At the same time, we have great incentive to return the capital as soon as possible after the initial first year to be able to show success and then ask our sponsors (with money in hand) to continue pushing forward into new programs and opportunities.
Bottom-line – we will balance aggressive return and completion with prudent business and full open candor to the process with our key advisors and our leadership team.
Other Than Just the Financial Aspect, How Can I Participate More in This Program?
What we are doing is a small part of a much larger framework. There are a tremendous number of opportunities and more angles than we can possibly pursue and test. We are NOT trying to go this road alone; we only want to get the flywheel turning and welcome collaborations and believe it or not, even health competition.
We are very open-architecture and strongly believe in entrepreneurial collaboration. If you have value to offer to our mission or are simply curious about what else we are doing and how we might work together, please contact us to start a conversation. “A Rising Tide Lifts All Surfboards!”
So You Are Asking Me to Purchase a Sponsorship Between $2,500 to $25,000… and You Tell Me You Will Provide a 2X Royalty Return -- Basically Double My Purchase Investment -- In Only One to Four years -- so you can test a new model and essentially a new category niche of Strategic Growth & Acceleration™ Capital… Is That Correct?
If you’re still reading, please call us to discuss your investment opportunities.
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