Staking a friend

[waj4ever16]

I'm not exactly sure if this is called staking or buying a piece of someone but my friend is going to do a $400 tourney and asked me to put up at least $100 for him. I readily agreed because I am confident in his skills and feel that he will do pretty well. My question is: What percentage of his winnings (assuming that he makes the money) should I ask for? I remember a friend putting up $100 for me in a $320 tourney and since he was a nice guy and didn't really care for the c-note, he only asked for double his money if I made the money. What do you guys think? Thanks for your help.

[stigmata]

No idea what is standard here - but i'm asking for 25%.

Even though your friend is a skilled player, the risk for your $100 is pretty high (especially in a medium/large tournament), so the reward should also be high.

I guess you could alter your payout if you are very confident he will get in the money (e.g. small tournament, soft competition, flat payout structure).

[Pepsquad]

If it was me, I'd ask for 25% of his winnings. You own 25% of his buyin and if he doesn't make the money you've flushed $100 down the toilet. However you don't have any of the "stress" of actually playing in this tourney so that needs to be taken into consideration as well.

[CardSharpCook]

I'm actually doing this with my own friends for the WSOP. None of them will play, so I am offering them the thrill of being part of it, by letting them buy a piece of me. Hell, it helps me too, making it that much more affordable to play. I plan to take no player's cut - if you own 5% of me, you get 5% of the winnings. period. I think it should be this way amoung friends. However, all friendships are different, and I think you should base your answer on your friendship, not on what a bunch of poker geeks say.

CSC

[ThrillFactor]

If I were accepting a 25% stake, I would expect to payout 15-20% OR 25% up to a cap.

I have some friends interested in staking me in some upcoming $500+ buy-ins for $100 each. My deal with them is 10% capped at $10,000 (wishful thinking, I know, but just in case).

[Mammux]

I would probably take about 10 percent. If it was a big tourney, I would take less, if it was small I would take more. This to compensate your friend for his time at the tables.

-Magnus

[ThrillFactor]

No way I'm not getting a "player's cut". My knowledge and experience - my "blood, sweat, and tears" - is worth quite a bit.

I'm not letting anyone walk with a full share of tourney winnings just b/c they "know" a good poker player.

[CardSharpCook]

[ QUOTE ]
No way I'm not getting a "player's cut". My knowledge and experience - my "blood, sweat, and tears" - is worth quite a bit.

I'm not letting anyone walk with a full share of tourney winnings just b/c they "know" a good poker player.

[/ QUOTE ]

But they are your friends, and they believe in you. How much is that worth? I know I wouldn't be half the poker player I am if not for the faith my friends have in my abilities. I'd try to give something back to them whenever it is "ok" to do so.

CSC

[2005]

wow, that's pretty much highway robbery.

Gavin

[ThrillFactor]

[ QUOTE ]
wow, that's pretty much highway robbery.

Gavin

[/ QUOTE ]


Is it really?

Let's talk about this. Let's consider worst case scenario for the investors. $500 buy-in, 5 investors @ $100/ea, I put up none of my money. I offer them 10% of winnings with a cap of 100x their buy-in ($10,000).

Is that really so out of line considering not a one of them knows the first thing about poker? Not to mention, I've spent the last 4 years of my life learning the game. Can you put a price tag on that?

My primary concern is definitely not the "fairness" of the deal; I just want them to be completely aware of the longshot odds that we're facing in the first place and that their buy-in for a single tournament is probably going to get them nothing. Slightly better odds than the lottery, that's all I can offer.

[Pepsquad]

[ QUOTE ]
[ QUOTE ]
wow, that's pretty much highway robbery.

Gavin

[/ QUOTE ]



Is it really?

Let's talk about this. Let's consider worst case scenario for the investors. $500 buy-in, 5 investors @ $100/ea, I put up none of my money. I offer them 10% of winnings with a cap of 100x their buy-in ($10,000).

Is that really so out of line considering not a one of them knows the first thing about poker? Not to mention, I've spent the last 4 years of my life learning the game. Can you put a price tag on that?

My primary concern is definitely not the "fairness" of the deal; I just want them to be completely aware of the longshot odds that we're facing in the first place and that their buy-in for a single tournament is probably going to get them nothing. Slightly better odds than the lottery, that's all I can offer.

[/ QUOTE ]

LMFAO! Slightly better odds than the lottery!? Then if that's true you sure as hell aren't putting a cap on my cut!
Instead of assuming worst case scenario for the backers, let's assume worse case scenario for you in your little scenario. The opportunity/experience of playing in a huge buy-in tourney...for FREE!
If you're telling me I'm playing the lottery, then let me play the lottery. In your scenario, if you managed to win, you'd stand to walk away a millionaire and your backers would get 50 grand. No thanks.

[Bataglin]

[ QUOTE ]
$500 buy-in, 5 investors @ $100/ea, I put up none of my money. I offer them 10% of winnings with a cap of 100x their buy-in ($10,000).



[/ QUOTE ]

LOL

[Mammux]

Anyone remember the specifics of the deal that Greg gave to his stakers?

-Magnus

[otnemem]

10% each, or 10% divided among them? If it's 10% each, I would agree that that's a fair cut. Think about backers in pool - usually they front your entire stake, and you keep 50%...

[otnemem]

[ QUOTE ]
No way I'm not getting a "player's cut". My knowledge and experience - my "blood, sweat, and tears" - is worth quite a bit.

I'm not letting anyone walk with a full share of tourney winnings just b/c they "know" a good poker player.

[/ QUOTE ]

Why do you put everything in quotes? Seriously. "Just because they 'know' a good poker player." Do they know you or not?

[sloth469]

What about satelite winners who would most likely be concidered dead money? It is possibly even +ev to sell 20% of your tournament for 10% of the buy in. If it is more about the recreational experience (kinda like nascar dream camp) then you have to admit it could be worth it to help offset some expenses. I am not too sure how long the $1k you win w/ the seat would last after airfare and expenditures.

All that said, it is a horrible deal for a break even player in the long run. Curious as to what some of you think of this idea.

-sloth

[Lurshy]

I don't know how many people are in your 500$ buy-in tourney, but if it is a large field, it looks like a bad deal for your friends.

Lets give you the benefit of the doubt and say you are better than half the field in a 500 person tourney, your chances of winning would be 1 in 250, but you are limiting your investors to a 100x pay-off. not exactly a fair return.

I think more customary would be to define a player's cut for yourself e.g. 10 or 20% of any winnings, then split up the remaining % based on the investors % of the buy-in. If you paid part of the buy-in, you would share in this as well.

You should consider how much you need their investment in order to play, plus your skill level in determining your players cut.

If you really need their backing in order to play, they should be rewarded for stepping up and giving you the play. If you are realistically an extreme long shot because you don't have much experience at the high buy-ins, they should be afforded greater upside. Conversely, if you are really just doing them a favor by letting them in and regularly cash at those buy-ins, take a larger players cut. The upside capping still sounds pretty rude though.

JMHO

[ThrillFactor]

What I read, and I have no idea if this is accurate or not, was that Greg took a 30% player's cut off the top and the rest was split proportionally among shareholders. He had put some of his money in so he got a share of this also. Think I remember it coming to about 45-50% total.

Disclaimer: the above is just what I read in a post on this site. Not sure if it is true.

[2005]

Most people aren't all that educated on backing, so let me say this. If you're being backed and getting 50% with no makeup, you are getting an amazing deal. Most backers take 60-70% plus makeup.

Gavin

[schwza]

[ QUOTE ]
Most people aren't all that educated on backing, so let me say this. If you're being backed and getting 50% with no makeup, you are getting an amazing deal. Most backers take 60-70% plus makeup.

Gavin

[/ QUOTE ]

makeup = makeup previous losses before you get any part of winnings?

[2005]

[ QUOTE ]
makeup = makeup previous losses before you get any part of winnings?

[/ QUOTE ]

yes

[ThrillFactor]

I like the sound of this makeup concept b/c I really wouldn't feel very comfortable taking their money and knowing that for a 1 tourney shot the odds are against us.

How does it work? Is it something like this?

Let's say I get 5 backers for $100/ea for the Stars $500K next week and I bomb.

Next month for the Party Million I offer the same 5 people the same deal and if they stick with me for another $100/ea and I cash for $1000, they all get their $200 back and I get nothing. Anything over and we split percentage wise. Correct?

If one backs out for the Party Mill tho, then he forfeits any claim to his original $100?

[2005]

Well, makeup is generally a concept applied to long term backing deals, but yes, you have a good grasp of the concept.

Gavin

[Ulysses]

[ QUOTE ]
If I were accepting a 25% stake, I would expect to payout 15-20% OR 25% up to a cap.

I have some friends interested in staking me in some upcoming $500+ buy-ins for $100 each. My deal with them is 10% capped at $10,000 (wishful thinking, I know, but just in case).

[/ QUOTE ]

some call them friends
some call them suckers
to each his own
you sure ripped them off

[ThrillFactor]

Yeah, I understand the long-term part. Basically, extrapolate my example over 10 tourneys (knowing realistically that none of my friends would stick with it for that long), as long as they stick with me I need to makeup their $1K/ea before any I take any cut. But should one of them drop out after the 9th tourney, I have no further obligation to that person. Right?

[2005]

right, you have no obligation to them if they are not in for the duration

Gavin