Backing Deal REDUX and update

[semipro]

About six-seven weeks ago, I posted my Backing agreement on this forum and asked for responses. Mostly I found that my backing deal was not a very good one for me.

Previous Backing Post (http://forumserver.twoplustwo.com/showthreaded.php?Cat=&Board=holdem&Number=1325980& Forum=,,,,,All_Forums,,,,,&Words=&Searchpage=1&Lim it=25&Main=1325980&Search=true&where=bodysub&Name= 20894&daterange=1&newerval=1&newertype=y&olderval= &oldertype=&bodyprev=#Post1325980)

Well, I wanted to return to the forum for two reasons.

1. Results of this two-month backing.
2. Advice on how best to construct the next backing deal.

Results-
Through this writing on December 28, starting the BR w/$3000, the roll is now up to $7700, for a $4700 profit, of which I unfortunately will be splitting half of w/my two backers. Seeing half of my profits "given" away to my backers has left me somewhat bitter.

Future Backing Deal-
I would like some advice on how best to structure my next deal. The goal of this new deal would include some MTT and some BIG live events, possibly the PPM III, Five Star Classic at the Bellagio, and hopefully the mecca, WSOP 2005, mixed in with various online cash games. I WILL not go back and make the same deal of 50% profit sharing again. That is a waste of my time and effort, and simply makes my backers more money than they deserve.

Here are some questions to consider.

1. How much will their re-backing be? I was originally thinking of 1500 each, but now am thinking at least 2k, maybe more.

2. What percentage of profits should be shared w/them?

3. Should my profits from the ring games be included in the profit share?

4. Any other thoughts and points that you would like to include, please feel free to chime in.

Thanks in advance for any input.

[AustinDoug]

You now have a BR of $3,350, which is more than the $3,000 BR you started out with two months ago. If you were comfortable playing at higher levels with $3,000, why wouldn't you continue to play the same levels with your $3,350.00?

I don't like your original deal in that with a 50/50 split, I would expect for them to back ALL of the BR. With that being said, don't be too "bitter" about splitting the loot. That's being very results oriented. What would you think if you had run into a bunch of bad beats and lost their $2,000?

[semipro]

I will continue to play the mid-stakes w/ my BR, however, the goal of a new backing deal would be focused more on the MTT and live tournaments.

Bitter, not b/c of the results, but that I allowed myself to enter into such a deal.

[turnipmonster]

explain why you need a backing deal at all?

also, what makes you think that you will have a positive expected value in large buyin tournaments? just curious. I wonder this about most people that play large buyin tourneys.

[semipro]

I want a backing deal for my ring play, b/c I like playing the higher stakes, but don't have the BR to do so. But also am realistic enough to realize that another 50% split on profits is a bad deal.

And I do not expect the MTT's to be +EV. I am more realistic than that. I want the chance to play in some live MTT's. This is the MAIN reason I want backers, b/c i do fully expect that whatever buy-ins I put up will be -EV. My friends and I, we have this "dream" of me being on ESPN and the WSOP. Now, i know that this is extremely far-fetched, and that the thought of making it to the WSOP besides a direct buy-in is highly unlikely. But in the unlikelihood of coming out ahead, I still need to have a plan in place for a new backing deal.

[Wake up CALL]

[ QUOTE ]
And I do not expect the MTT's to be +EV.

[/ QUOTE ]

This has got to be one of the best reasons for looking for backers I've ever seen posted. I hope some sucker, err, someone rewards you for your honesty.

[semipro]

Yup, and realistic.

However, I would still appreciate further comments on how to better this deal than from the last time.

[Losing all]

Your friend has strange "dreams", but at least you don't want to pay him much if this -ev ship comes in.

[ChicagoTroy]

I would start by not saying you have a negative expectation in tournaments. People tend to not invest money in -EV ventures.

Jesus.

[slickterp]

guarantee them a certain ROI, say 20%. they won't get a better investment anywhere else. so they put in 1500, you give them back 300 a month. this way, you keep the majority of the profit (you earned it) and they get a nice return on their investment.

[semipro]

[ QUOTE ]
I would start by not saying you have a negative expectation in tournaments. People tend to not invest money in -EV ventures.

Jesus.

[/ QUOTE ]

REALLY!!! You mean, i DON'T tell them that I expect to lose some of the money that they may choose to invest with me??? Now I know why I posted this question, for obvious answers like yours. Thank you!!! Thank you SOOOOOO much. I NEVER would've realized my mistake without your helpful input.

Now, how about something actually useful?

[semipro]

[ QUOTE ]
guarantee them a certain ROI, say 20%. they won't get a better investment anywhere else. so they put in 1500, you give them back 300 a month. this way, you keep the majority of the profit (you earned it) and they get a nice return on their investment.

[/ QUOTE ]

Guarantee ROI is no good, that is as good as just a loan. For that, I have a line of credit that I can tap w/a MUCH lower interest rate. I want BACKERS, not loans, but thanks for the idea.

[dogmeat]

You are a tool.

Do you see why?

Dogmeat /images/graemlins/spade.gif

[Tuco]

I have backed a number of people, both online and live. In all the deals, I took a person who I thought was a very good player (who for whatever reason had no poker bankroll) and gave them the opportunity to make us both some money. Every deal also had a makeup clause in case it didnt go well.

In one case, I bought my friend a computer, took it over to his house and set it up. I then gave him a BR for the party 15 game. That was the spring of '05. At this moment he is up close to 80K. My friend could not be happier for both of us. He is very grateful for the things I did for him, and vice-versa. We renogotiated the deal when it was clear that he could play on his own. Currently, I get 15% of his wins. Not bad considering that one day in mid december he make $10K in one day in the 30/60 at party. He has never once complained about how much I have made in the deal.

I also have lost several thousands where a player I back loses and cant continue. The money I make on the ones that win offsets this obviously, but its not always gravy.

No matter how good you are, I would not back a person like you who, for some reason, is bitter towards your backer because they made money. It takes two to win in these deals, and both should be compensated. Im not saying that you are a bad person or anything, just that you dont seem to understand that its a partnership.

As far as 50/50 being a "bad deal" for you, it is standard in most backing deals. Not sure where you get the idea that it is not enough.

Tuco.

[Punker]

Well post your real question ("How can I get someone else to pay my tuition for large buyin MTTs?") instead of what you asked.

You are in the wrong place to ask for that. Go find conmen.com or some such similar web site.

[stinkypete]

[ QUOTE ]
guarantee them a certain ROI, say 20%. they won't get a better investment anywhere else. so they put in 1500, you give them back 300 a month. this way, you keep the majority of the profit (you earned it) and they get a nice return on their investment.

[/ QUOTE ]

that is easily the worst advice i've read on this forum. ever.

[semipro]

Obviously you did not read the entire thread, otherwise, you would have read that I will also be sharing profits derived from ring games. Try re-reading the entire thread before flaming. You may learn more about the situation and realize how ill-conceived your "advice" is.

[semipro]

Thank you for the constructive feedback. Yes, I do feel bitterness, not necessarily with my backers, but more so with myself for allowing myself to have entered the original backing deal. The one thing that I did employ in the backing deal was that the time was limited to two months of play. Also, I think that I am bitter, because I was a profitable player before the deal, and I continue to be so, and should have realized that such a deal could have been negotiated with better terms. That is why I was asking for advice on this next period of backing. So, that I can find a happy medium for my backers and myself. As mentioned previously, I am not entertaining any thoughts of guaranteeing them a certain ROI, b/c then that is nothing but a loan, and I don't need nor want a loan.

Tuco, any further comments from you would be appreciated.

[semipro]

[ QUOTE ]
You are a tool.

Do you see why?

Dogmeat /images/graemlins/spade.gif

[/ QUOTE ]

At the expense of sounding naive, please elaborate on your above comment. Thanks.

[Rudbaeck]

If you can beat 15/30 for 2BB/100 you can beat any lower limit.

So, lets say you take your $3000 roll and start playing 5/10. You need to make 300BB at this limit to move up to 10/20. If you beat 15/30 for 2BB/100 it's pretty safe to assume you can beat 5/10 for 3. So, you need 10,000 hands at 5/10. 4-tabling lets you play 2k hands in about 8 hours. So you need one work week to reach 10/20.

At 10/20 you only need 150BBs to reach 15/30, but we'll assume you now 'only' win 2.5BB/100. Now you need to play 6k hands. Another 3 days work.

Starting with your current roll you can be rolled for 15/30 in 8 days, a week if you push the table hours. (Ok, 300BB is a very small roll for 15/30, so you might spend two weeks and start out with a 500BB roll...)

[stinkypete]

[ QUOTE ]
If you beat 15/30 for 2BB/100 it's pretty safe to assume you can beat 5/10 for 3.

[/ QUOTE ]

that's a pretty ridiculous assumption.

[semipro]

[ QUOTE ]
[ QUOTE ]
If you beat 15/30 for 2BB/100 it's pretty safe to assume you can beat 5/10 for 3.

[/ QUOTE ]

that's a pretty ridiculous assumption.

[/ QUOTE ]

Ok, instead of critiquing everyone else's comments, how about some constructive comments from you?

[ChicagoTroy]

[ QUOTE ]
REALLY!!! You mean, i DON'T tell them that I expect to lose some of the money that they may choose to invest with me???
Now, how about something actually useful?

[/ QUOTE ]

Something useful? Sure, no problem. Let's start with an explanation of what "EV" (expected value) means.

EV indicates what one expects to make over the long term, not what might happen in the short. If you say you are -EV in tournaments, you are saying you expect to lose in the long term.

That means, when you say playing in tournaments is -EV for you, you are saying nobody should give you money to play in them, since you are a long term loser.

I'll even leave out a joke about somebod calling themselves "semipro" misusing as simple a term as EV.

[stinkypete]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
If you beat 15/30 for 2BB/100 it's pretty safe to assume you can beat 5/10 for 3.

[/ QUOTE ]

that's a pretty ridiculous assumption.

[/ QUOTE ]

Ok, instead of critiquing everyone else's comments, how about some constructive comments from you?

[/ QUOTE ]

pointing out errors in others' comments = constructive.

[cbfair]

[ QUOTE ]

Results-
Through this writing on December 28, starting the BR w/$3000, the roll is now up to $7700, for a $4700 profit, of which I unfortunately will be splitting half of w/my two backers.

[/ QUOTE ]

Here's what I don't understand:

You say you have $5350 BR ($3000 + 1/2 of $4700), you also say you are a profitable ring game player. It's unclear whether you want this backing deal to cover your ring play or big MTTs (you've said both), but I don't see how it's relevant to my concern one way or the other.

My concern is that a profitable ring player with experience at higher limits and a 500BB roll for 5/10 should be able to move up to 30/60 over a relatively brief time; regardless of the validity of Rudbaek's assumptions, his theory holds up. So, without accusing you personally of any impropriety, this request seems spurious at best. The bottom line for me is that your whole story doesn't quite add up.

[semipro]

[ QUOTE ]
[ QUOTE ]

Results-
Through this writing on December 28, starting the BR w/$3000, the roll is now up to $7700, for a $4700 profit, of which I unfortunately will be splitting half of w/my two backers.

[/ QUOTE ]

Here's what I don't understand:

You say you have $5350 BR ($3000 + 1/2 of $4700), you also say you are a profitable ring game player. It's unclear whether you want this backing deal to cover your ring play or big MTTs (you've said both), but I don't see how it's relevant to my concern one way or the other.


[/ QUOTE ]

Of the $3K original BR, only $1K of that was mine, so currently of the $7700, my part is $3300. With that BR, yes I can continue to be a profitable player at 5/10, but I want to test the waters in some of the bigger MTT's. My BR won't support the buy-ins for the big MTT's, so I have taken on backers in an attempt to enter the big MTT's while at the same time still playing ring games.

[Grisgra]

[ QUOTE ]

Of the $3K original BR, only $1K of that was mine, so currently of the $7700, my part is $3300. With that BR, yes I can continue to be a profitable player at 5/10, but I want to test the waters in some of the bigger MTT's. My BR won't support the buy-ins for the big MTT's, so I have taken on backers in an attempt to enter the big MTT's while at the same time still playing ring games.

[/ QUOTE ]

Yes, the MTTs in which you plan to be -EV. Gotcha.

As others have noted, this is truly bizarre.

You don't need a bankroll for the ring games. $3300 is enough for 5/10, and if you play 10-15 hours a week you'll probably double this over the next month, allowing you to play 10/20. Within two or three months, you're golden. Yeah, so you ended up giving away some profits to your initial set of backers -- who allowed you to do exactly what you wanted, assume risk you couldn't afford. (God forbid they profit from taking that risk.) Anyway, it's moot. It's over.

So you're okay for the ring games, leaving just this high-stakes MTT nonsense. Which you said is a pipe dream anyway. So if it's a pipe dream, what's wrong with promising backers the same kind of profit returns? The reason you feel you got "gypped" with the ring games is that you knew you were +EV. Here, you think you're -EV. So you're not going to get gypped after all -- they are.

So what's the problem again?

[Rudbaeck]

[ QUOTE ]
[ QUOTE ]
If you beat 15/30 for 2BB/100 it's pretty safe to assume you can beat 5/10 for 3.

[/ QUOTE ]

that's a pretty ridiculous assumption.

[/ QUOTE ]

Well, even if he can only beat it for 2BB/100 it will take him 10 days to pass the limit and head on.

And do you really think the skill difference between 5/10 and 15/30 is so small that a 1BB improvement at one third the stakes isn't possible?

The final resting place of many Party TAGs is (4-8)-tabling 15/30, all TAGs at 5/10 are so to speak not only passing through, but also presumably significantly less skilled than someone temporarily stepping down from 15/30.

[turnipmonster]

[ QUOTE ]

As others have noted, this is truly bizarre.


[/ QUOTE ]

that the original poster doesn't understand how weird this is makes me wonder if there's a lot of other stuff he/she doesn't understand as well.

[Vee Quiva]

First of all I would suggest that you exercise some patience. It sounds like you are a successful player and you should get to the higher limits eventually if you keep winning. It seems like your personal makeup will not allow you to be happy taking on profit sharing agreements. You are probably better off on your own.

As for the multitable tournaments....There are a few options. First of all the WSOP has 100 times more satellites than any other event. Enter online or while you're in Vegas. That is the way to turn your small bankroll into a large one.

Also you may want to search the archives for Greg Raymer's deal. He did something where he sold shares of stock in himself to his backers. I believe Moneymaker also sold pieces of himself once he got to the big tournament.

Finally you need to realize that even though you are doing all the work, your backers are taking most of the risk. They deserve to get paid for the risk they are taking.

[Rudbaeck]

[ QUOTE ]
My BR won't support the buy-ins for the big MTT's, so I have taken on backers in an attempt to enter the big MTT's while at the same time still playing ring games.

[/ QUOTE ]

You also said you expect them to be -EV, if someone else is taking all the risk they should take the vast majority of the rewards too.

If someone pays you to enter a $600 tourney, and you win Z, then out of Z-600 they should get most. Not that I'd back you even at that, but I'd fully expect to take 75-90% of the profits if I take all the risk on a high risk venture.

[semipro]

I agree that if the backers were backing me for just the MTT's alone, then I would agree with the multiple comments that they are taking the risk in a risky venture and should therefore be rewarded for such risk, and I would agree. If it was just the MTT's alone.

I think that the proper thing to do from this point forth is that my backers will back 100% of my BR, and they will continue to collect 50% of all winnings, including the ring games. That this partnership should last through a period of MTT's, and after the MTT's are done, then the partnership should be dissolved, and I will go on my merry way to ring games w/my increased BR. Thank you all for your constructive comments.

Now, about the -EV for MTT's.

Ok, let's assume that I am about a 10% + above average player, and that I decide to enter an MTT for a buy-in of $500, with 2000 ppl entered, w/the top 150 in the money, and that 150th pays out exactly twice the buy-in. I would think that my expected place of finish would be about 800th if all 2000 ppl entered were the average distribution of players. And my standard deviation for a second attempt would be 780th - 820th, and for a third 760th - 840th, and so on for each successive attempt. If I have to place 32 std deviations above my average in order to cash, then this would be a statistical outlier. I can only assume at this level that this would be -EV. I am not a statistician, so if this logic is flawed, please forgive.

Now, let's say that I am 30% above average, and same situation as above, then my expected place of finish would be 400th. Again, this would leave me about 8 std deviations away from cashing. Much better than the first situation but still -EV.

Finally, if I was 40% + average, then my expected finish would be 200th, and now I am less than one std deviation away from cashing out, and i would consider this situation a +EV.

I am not so cocky or assuming as to think that I am amongst the top 10% of poker players world-wide. But I think that playing MTT's will be a great learning experience, and an outside chance at placing.

[stinkypete]

[ QUOTE ]


Well, even if he can only beat it for 2BB/100 it will take him 10 days to pass the limit and head on.

And do you really think the skill difference between 5/10 and 15/30 is so small that a 1BB improvement at one third the stakes isn't possible?

[/ QUOTE ]

it's not so much an issue of skill difference as it is an issue of rake. i don't remember the exact numbers, but at 5/10 you can expect to pay over 2BB/100 in rake, while at 15/30 its < 1BB/100. to make 1BB/100 more at 5/10, you'd have to be beating your opponents for about 3BB/100 more than at 15/30. that's huge.

[stinkypete]

[ QUOTE ]

Ok, let's assume that I am about a 10% + above average player, and that I decide to enter an MTT for a buy-in of $500, with 2000 ppl entered, w/the top 150 in the money, and that 150th pays out exactly twice the buy-in. I would think that my expected place of finish would be about 800th if all 2000 ppl entered were the average distribution of players. And my standard deviation for a second attempt would be 780th - 820th, and for a third 760th - 840th, and so on for each successive attempt. If I have to place 32 std deviations above my average in order to cash, then this would be a statistical outlier. I can only assume at this level that this would be -EV. I am not a statistician, so if this logic is flawed, please forgive.

Now, let's say that I am 30% above average, and same situation as above, then my expected place of finish would be 400th. Again, this would leave me about 8 std deviations away from cashing. Much better than the first situation but still -EV.

Finally, if I was 40% + average, then my expected finish would be 200th, and now I am less than one std deviation away from cashing out, and i would consider this situation a +EV.

[/ QUOTE ]

can you explain these numbers?

what does "10% + above average player" mean?

why do you think your standard deviation is 20 places in your second event? why does your standard deviation increase in successive events? i'm not sure you understand the statistical concepts you're trying to discuss here.

do you intend to share these numbers with your backers?

[semipro]

You're right, I may not understand the statistics correctly, that's why I said please forgive if I sound naive. But the 10%, 30% and 40% above average numbers I threw out as examples of where I would be in an MTT. And my use of standard deviation is probably WAY out of line. I am equaling one std deviation as .1 times the % above avg of my ability, for instance when 10% above avg w/a 2000 ppl field, then i was thinking of one standard deviation as .10 x .10 x 2000 = 20, and for 30%, .10 x .30 x 2000 = 60. Just reviewing my notes, i have no idea how i came to the conclusion that equals one standard deviation. It's been over 10 years since I took my statistics course, so my thinking may be just a WEEEEEE bit off.

No, i don't intend on sharing these numbers w/my backers about the MTT's. I will let them know the realities of MTT's, but i will not get into deep numbers with them.