Looking for Backers

[Greg (FossilMan)]

This post is primarily directed at those who know me through my long history of posting about poker on the internet, here and on rgp. Of course, anyone is invited to participate, but I don't really expect to hear from anybody who doesn't already know me pretty well. If anyone feels that this post is inappropriate for 2+2, I apologize.

Unfortunately, I find that my bankroll has gotten pretty slim. Although I earn a nice living as an attorney, the deal I made with my wife a few years ago specifies that the only money I can play poker with is money won playing poker. So, my bankroll only grows through poker wins, and shrinks through poker losses and expenditures. I have won a good bit of money each year for the last few years, but have spent too much of it (house downpayment, "real" wedding ring for wife, family vacation to Disneyworld, etc.).

Before going to the World Series this year, my bankroll was at about $45,000. I decided not to hold back at all, and that I was going to play in the last few events with or without satellite wins. Thus, I brought $15,000 for tourneys and another $15,000 for satellites and side games. The trip was a disaster beginning to end, with numerous bad beats and other such stories I won't bore you with (if you're really interested in the details, please see the trip report posted on rgp and 2+2). Since coming home from that trip, I've largely limited my play to the Tuesday night NL HE tourneys at Foxwoods, some PL HE after the tourney, plus the occasional foray into the 50-100 HOE game at Mohegan Sun when it looks especially good. However, since the WSOP ended, I've not managed to make any headway, and still have a bankroll of only about $15,000.

So now the World Poker Finals is approaching. And I want to compete in their main event, which is priced at $10,000 this year. I would also like to play regularly in the 50-100 HOE game, as it is good much more often than not. However, $15,000 really isn't enough for this, and if I were to go broke, I would not have the bankroll to play at all, unless I convinced my wife to let me withdraw funds from other sources. And, as you can imagine, I would rather win it.

So, I've decided to see if there is enough interest in backing me to go this route. What I propose to do is solicit investments in units of $500., with the goal of raising $40-50,000. Of this amount, I would contribute $10,000, and the other investors would provide the remaining 30-40K. I would then use this bankroll to stake my poker play for the remainder of 2002. I would use this money for gambling at poker, but not for any other form of gambling, and I would use it at my best discretion within the realm of poker. At a minimum, I expect to use the bankroll to participate in 6-10 events at the World Poker Finals, to play almost every Tuesday in the Foxwoods NL HE tourney, and to play 1-2 times per week in the 50-100 HOE game at Mohegan Sun. Assuming the bankroll is still healthy, I would also expect to participate in 4 or more events at the U.S. Poker Championships in Atlantic City.

At the end of the year, if the bankroll had lost money, then each investor would sustain that loss in proportion to their investment. Thus, if the total bankroll was $50,000, and you had invested $500, you would sustain 1% of the total loss. If the total loss were $20,000, you would sustain a loss of $200, and the remaining $300 would be returned to you. If we broke even, everyone would get their investment returned 100%. But, in the best case, where we make a profit, it works like this. The original investment is returned first. Next, the profit is divided as follows: 35% to me for time and effort, and 65% to each investor in proportion to their investment. Thus, if the total bankroll were $50,000, and you had invested $500, you would gain 0.65% of the profit. If the total win were $20,000, you would get your $500 back, plus 1% of $13,000 (the investor's share of the profits) or $130.

If we do really well, I will win the $10,000 main event at the World Poker Finals, and each $500 investment will return as much as a $3,000 profit (plus have a share of me in the $25,000 entry fee main event of the World Poker Tour, since this seat would come with winning the WPF main event). If I do about as expected in the 50-100 HOE game for the rest of the year, and do nothing special in the tournaments, each investment will probably about break even. If all goes poorly, then your entire investment may be lost.

That is an important consideration. If the investment you make is too much risk for you, your bankroll, or your temperament, then please do not make it. Making this investment will tie up your money for the rest of the year, and early withdrawals will not be allowed unless I and all the other investors were to agree (not too likely). This is a very high-risk investment, with the potential for an exceptional return, but also the potential for a complete loss. Based upon my past results in the big mixed games around here, I would expect an average profit in the 50-100 HOE game of between about 10 and 15,000 for the rest of the year (given a play time of about 10 hours per week). But, as we all know, there is a big luck factor involved, and anything is possible. It is also possible that the game will die or go bad (meaning I would choose not to play in it), and the opportunity to play in bigger games locally will not exist. In such a situation, your money would be tied up in games at the 20-40 level or thereabouts, where the potential profit (and loss) is not as great. Still, at a minimum, you would be buying a piece of my play in many major poker tournaments at Foxwoods and the Taj, and the overall potential for significant profits would remain.

If you seriously wish to make an investment, please contact me by email. If enough people want to do this, I will contact all of you with information about sending me your investment money, and we will begin the playing period. Please also feel free to email me with your questions, which I will gladly answer.

This being posted in a public forum, I am sure there will be many sarcastic comments and the like. I can't stop you from making them, but I can and will ignore them. If you don't like this investment, then don't make it. It's that simple.

Thanks for taking the time to read all this.

Later, Greg Raymer (FossilMan)

[brad]

'The original investment is returned first. Next, the profit is divided as follows: 35% to me for time and effort, and 65% to each investor in proportion to their investment.'

personally i dont think thats fair.

just an unsolicited comment.

brad

[Mark Heide]

Greg,

I agree with Brad that your percentage figures are off. If you want someone to take a high risk investment, you will need to offer a fair return. Plus, the turnout for the foxwoods events has not been high enough for me to even consider it. I really think you should just stick to side games and low buy-in action, then in January make your reservations for the WPO.

The WPO will have lots of great games that you should be able to make a lot of money because you will have more choices. When I was there last time, they were spreading alot of big side action games. Even limit games with a $100-$200 betting structure. Lots of Pot-Limit Omaha and Hold-em. Make your plans for this event instead, and just try to make some money at foxwoods by playing in the side games.

Good Luck

Mark

[Phat Mack]

I am ignorant about staking poker players (other than putting broke 'locals' into a game), but have always assumed that the backer received 50%, not 65%. Is there a "standard" contract for stake horses?

Greg,

Sorry to hear that you're running bad. It's obvious to anyone who reads your posts that you can play. You'll get it turned around.

Is there a deadline for investing?

This is the thing. We all know your a fairly decent HE player. But, you say you have 10k that can be used for poker. If you are as good as we think you are why wouldnt you just use that 10k and play some lower limit games and build it up. Surely a good player such as yourself could triple your bankroll.

Furthermore I think your plea is not unjustified but is a little awkward. Why not just ask for a backer for the WSOP main event. Why make it all confusing and tie up peoples money for an entire year. In my opinion I don't think you will get many bites for this offer if any. It is too confusing, the money will be tied up too long, and the details are sketchy at best.

My advice is just use what money you have and try to build it up at what ever limits you think you can sustain with that bankroll. The funny thing is that you want people to give their hard earned money to you, and you yourself wont even take money from your own attorney earnings to play. That really says something when someone refuses to use employment earnings to play but will ask strangers to back them on their own merit. ODD!

[Greg (FossilMan)]

There is no standard, really. It's whatever the player and backers agree to, with each looking for its own interests.

There have been so well known long-term backing arrangements for poker tourney players (e.g., Chuck Humphrey and Steve Badger) that I believe were 50:50. That is, the backer put up all the investment money, and took all the downside, but the player and backer each split the long-term profit down the middle. I am doing the same, but cutting it back to 35% instead of 50% given the time period.

If someone thinks that is too much, they simply can say no (or easier yet, ignore the business offer).

There is no time limit per se. However, if I don't get enough interest in a week or two, I'll call the whole thing off, or ask those who expressed interest if they want to engage in another deal more in proportion to the size of the investment bankroll.

Thanks, Greg Raymer (FossilMan)

[Greg (FossilMan)]

Mark,

See my reply to Phat Mack for my position on the fairness of this deal.

Thanks for taking the time to offer your suggestions. Of course I can just play smaller and build-up my bankroll that way. I've done it before. ;-)

However, I would rather not skip the main event at Foxwoods this year, and if I'm playing off my own bankroll, there is a not small chance that would happen. Basically, I think I can earn MORE money with this deal than without it; AND I think the investors will also be making a bet with significant +EV.

Imagine if Ray Zee were on a short bankroll. Wouldn't you think it a good thing for both you and he if you staked him in high action play? I'm no Ray Zee, but I'm not Dan Quayle either.

And I've heard from you and others how great the WPO is, and I certainly hope to attend in 2003.

Thanks, Greg

[Greg (FossilMan)]

I honestly hadn't given it a thought. I have less than 2K on pokerstars, and don't play anywhere else right now. It's pretty small stakes at it's highest, and really doesn't require much of a bankroll. Heck, if the investors all wanted it included, I would do so. However, we'd be better off if I skipped it entirely, and spent more time in the live games instead. ;-)

Later, Greg Raymer (FossilMan)

[Greg (FossilMan)]

Why wouldn't I respond? You asked legitimate questions in a polite and appropriate manner. You should read a couple of the posts on rgp. ;-)

If I get backers for one event as you suggest, it is a much riskier investment, right? Some people will prefer this method where there is relatively little chance of losing ALL of their investment, and a decent chance of making a good return. Of course, the most they might win is probably less, but not by anywhere near the factor that the risk is reduced.

If you bought $500 worth of stock in some company, you would expect it to be tied up longer than 4 months most of the time, right? And you would hope it goes up 50% or more, but wouldn't really expect it to, I imagine. This is like buying stock but with about 2-5x the likely downside, and about 2-10x the likely upside, IMABO (in my admittedly biased opinion).

As for the stuff about not using my income, you did read the part about the deal with my wife, right? Are you or have you ever been married? Enough said.

Also, I don't recognize your name, so I assume I don't know you, and that you therefore don't know me. As I said, those who know me understand there is nothing funny going on, and they know there is no need to be concerned about anything odd going on. I don't expect you to believe that, because we are strangers to one another. I similarly don't expect to get backing from you or other people who don't know me, and that is perfectly sensible of you and them.

I wouldn't buy a piece of somebody I don't know either.

Thanks for your interest and honest questions.

Later, Greg Raymer (FossilMan)

[Mark Heide]

Greg,

I have no questions about your ability, but last time you had given me an equal share. Something, else to consider is that if you want to hold on to this cash, for a long time I believe the return should be better. Especially, for tournaments, since they are the riskiest. If you were just looking to play side games, you would be better off. Just because your skill would make the difference. I would like to know what Ray Zee, Mason Malmuth, or even David Sklansky would say about your offer.

Strongly consider going to the WPO in January. The hotel room is inexpensive and much better than most of the places in Vegas. Plus, you will have a choice of many big games going on. The best time to go is during the first week because you will get to play against the most inexperienced players while they still have money. When I went this year the Horseshoe ran out of playing space and believe it or not, removed a blackjack table to set up a poker table.

Good Luck

Mark

[MMMMMM]

"I'm no Ray Zee, but I'm not Dan Quayle either."

Have you ever played poker with Dan Quayle?

[MMMMMM]

I think the people who know you would probably not have a problem with the personal integrity aspects of the deal, but I do get the feeling that you might have more bites if it were to be simply taking a piece of you in whatever tournament events you entered during the WPF. Maybe it would be riskier but it might appear simpler, cleaner-cut and less agonizing in the eyes of the potential investor. Also there is the consideration of the vigorish so to speak...yes you deserve more since it is your time over a long haul but some might prefer a shorter-term arrangement with less vig. Just a few thoughts.

[Greg (FossilMan)]

As soon as I typed the words "I'm no Ray Zee", the rest of the sentence just flowed out of me.

Of course, since I've never heard that he plays at all, there is every reason to suspect he's not any good at it, really. Wouldn't you agree?

Later, Greg Raymer (FossilMan)

[Greg (FossilMan)]

True, but last time you only bought a piece of me for a very short period. This is for 3-4 months, and will include something like 300-400 hours of my time. If I give everyone a piece with no vig, then it's a great deal for the backers, but it isn't a good deal for me. I believe the present deal to be good for me and for the backers.

Later, Greg Raymer (FossilMan)

[Jimbo]

Greg,

Just wondering why removing funds from other savings would violate the agreement with your wife when you said "I have won a good bit of money each year for the last few years, but have spent too much of it (house downpayment, "real" wedding ring for wife, family vacation to Disneyworld, etc.)." It seems to me you have equity in your current savings due to the aforementioned expenditures. Surely a good attorney could argue this case in "family court"! I might be interested in a few shares if I were to get a 75% return on my investment. Your plan sounds extremely risky, I would estimate your successful chances at this endeavor to be about 10% successful. Now if you add in your profit from fossil sales that might sweeten the pot enough to tip many of us over then line! /forums/images/icons/smile.gif

Why don't you just play in the 50-100 game (on your current bankroll) for 500 hours and make $37,500 in that manner?

At any rate best of luck Greg,

Jimbo

[Ray Zee]

there are some major flaws in the thinking going on here and i need to set them straight. first i must say that greg is indeed an excellent player and is making a business offer here and i believe he is better off playing alone with what he has, rather than getting investors. but he feels he would like to play in bigger events. so be it. nothing wrong here.
him getting 35% and returning 65% of the profits is not a bad deal for the others. in fact it is quite a good deal. the reason for it is that the time frame. greg makes the mistake in thinking that a longer tie up of the money means he should take only 35% of the profits. however the longer time frame helps the investors immensely. a winning player should be assured a win after enough time.
plus in this case he is also putting in 20% of the bankroll and gambling his own money. you can then be assured his decisons will be both in his and your best interests as he has his own to lose and wont take unreasonable shots as a full freeroll backed person may do. basically he makes 100% on his investment and 35% on yours if he wins. if he loses he also loses on his own money invested. this is a good deal.

the downside is if you think he may not be a winner. thats your decision. next is if you dont trust him. again thats personal decisions. last, but most important to me is if he puts too much at risk in tournaments which have a high risk of total loss. that should be spelled out upon the agreement start. good luck all that consider.

[Greg (FossilMan)]

Of course I could make that argument to my wife, but honestly I'd rather do it this way. If I don't get enough backing to do this deal, I'll continue on as is and hope that I win some satellites and such at the WPF. Or, maybe I'll come back on and sell pieces of myself in 1 or a small number of specific tourneys at the WPF.

As for the 50-100 game, it is extremely risky to play on in that game with only 15K. The swings can easily be +/- 5K per session. I have been playing in the game when it looks especially good, but have only managed to swing back and forth a bit without making ground. I had gotten up about 9K in the game, but a couple of unfortunate sessions and I was back to where I started.

It is really amazing how much money can swing on one card in these games. This is my favorite (or least favorite, really). I call a raise in the big blind, and it gets raised again by a limper behind me, so I end up putting in 3 bets preflop, 8-handed, with Qc2d3d4c (omaha8, of course). Flop is AcKcTc. Well, that's about as good as I could ask for. I see the guy behind me loading up, so I know he's going to bet. I check, he bets, most of the field calls, I raise, we lose nobody. 6-handed, $1800 in the pot. Turn is 6d. A low card might cost me part of the pot, but I will make the nut low with any low that comes, so it isn't all bad. Another player decided to go to war with me, and we cap it 5 ways on the turn. $3800 in the pot. River is a disaster, another 6. I check, player bets, gets raised, I end up folding. Turns out the other jammer on the turn had KK23, and the rest of the field was AAxx, TTxx, and AhKhQhJc (don't ask me how he stayed in on the turn; he did fold the river, but told us all his hand). So, on the flop I had the nuts, and the only way I can lose is if the case T hits, or a running pair hits. Final pot was $4400. Sigh.

The point again is just that $15K is not enough to play in this game without going broke very often even if you could have a long-term win rate of 3-4 big bets/hour.

Later, Greg Raymer (FossilMan)

[MMMMMM]

Of course, but for all we know he might be an undiscovered poker savant.

[Greg (FossilMan)]

Ray,

Thanks for your support. It means a lot coming from you.

Later, Greg Raymer (Fossilman)

Questions:

Does your $10,000 investment play the same as for other backers? In other words, let's say you put together a total bankroll of $40,000 making your investment 25% of the total. Would you get 16.75% of profits (25% of the remaining 65%) for the investment in addition to your 35% for playing? Thus meaning your total return would be 51.75% of profits?

How much total do you plan on spending for tournament buy-ins? Does this include satellites? If not, do you plan to play satellites as well?

How will you handle taxes on tournament winnings?

Will you keep backers updated on results from individual sessions/tournaments and cumulatively?

Thanks,

jdlca@sprintpcs.com

[brad]

thats what i thought and the main reason i thought it was unfair, but i could be wrong.

brad

[Greg (FossilMan)]

Thanks for asking some good questions.

Yes, my $10K works the same as everybody else's money who invests. So, yes, I get 35% of the profit for playing, and about 13-18% for investing.

I plan on spending money on tournaments the same as I would if the money were all mine personally. I will almost certainly play in the 10K event at Foxwoods, plus 5-7 other events during the WPF. If the bankroll is still doing well, I will likewise play in a few of the events, including possibly the 7.5K event at the Taj in December. It is quite likely that 20K or more will go into tournament entry fees. It is also my belief that we are pretty likely to be about 10K or more ahead by the time the WPF starts.

Taxes will be the personal responsibility of each investor. Foxwoods does not withhold taxes no matter how much you win. I'm not sure about the Taj, but I will check with them before playing. If the bankroll were to double and I sent you back $825 ($500 plus $325 profit), it would be your problem what to do about taxes on the $325.

I certainly will not report anything to the IRS. However, I will answer any question the IRS may ask me about the identity and amount of money won by backers.

And yes, I intend to put out an email every couple of weeks updating all the backers on the results to date. However, everyone should understand that even if things start out poorly, you cannot withdraw your funds without the full consent of all members of the investment pool.

Thanks, Greg Raymer (FossilMan)

[Greg (FossilMan)]

I fail to see why that makes it unfair. If you put up 20% and I put up 20%, do you think we should both get 20% of the profit? Even though I'm putting up 100% of the labor?

If we bought an antique in need of restoration, we each paid $500, YOU spent 30 hours doing the restoring, and we then sold it for $3000, how would you suggest we split the $2000 profit?

Certainly people can disagree about whether the percent is properly 35, or 60, or 10, or whatever. But I fail to see how 0% could ever be the fair figure.

Thanks for your input.

Later, Greg Raymer (FossilMan)

[Jimbo]

Greg,

You said "I fail to see why that makes it unfair. If you put up 20% and I put up 20%, do you think we should both get 20% of the profit? Even though I'm putting up 100% of the labor?" Yes many backers would feel this way and here is why. If your 20% by itself cannot fulfill your goal (and you have stated you believe this to be true) then without the backers you have 0% chance to increase your bankroll in the manner you choose. Therefore whatever chance you will have is due 100% to the backers help. Why would they not be due an equivalent return with the exception of a token "Jelly Roll" at the completion of your successful attempt? I am not stating this is my personal opinion just answering your question in a logical manner. As I mentioned earlier I felt 75% for the backers and 25% for your labor was fair but I do not see the other point of view as being entirely unreasonable!

Jimbo

[brad]

well you know im not sure its unfair, but heres an extreme example to show the idea.

2 20/40 buddies notice a 80/160 game that is totally juicy(with a seat open) . both players are pretty solid long term winners in the 20 game. they decide to each put up 2500 and have one (perhaps they flip a coin to decide) play the 5k.

so how do they split the profit?

brad

[Greg (FossilMan)]

I guess they better decide before they flip the coin?

Seriously, the shorter the period, the less the labor is worth (obviously). But, if in your hypothetical, the playing partner would be in the 80 game, while the other partner would stay in the 20 game, then shouldn't the playing partner be compensated by MORE than 50%? I mean, they both contributed the same amount of capital, but the playing partner is contributing labor. Since he could've stayed in the 20 game, where he has an established earn rate, and which earn rate he is now not going to get, he should get something extra, IMO.

Later, Greg Raymer (FossilMan)

[Jimbo]

Spoken like a true attorney Greg. Your perspective on that example explains why you feel your backing arrangement is fair. If you have time would you respond to my reasoning in the post above Brads?

Thanks In advance,

Jimbo