Staking a buddy (take 2)
 

Here's the short version: I staked a friend 2k. I got 25% plus all his rakeback (if he loses, it's on me). Two weeks in he was up and cashed out 1,100 (for bills). I took 25% of that as well. Then he lost the rest. Interestingly, between the rakeback and the money from the cashout, I've gotten a return of exactly 2k. Now what the hell do I do?

Do we just start over? Would you alter the deal? How do you feel about him cashing out only part of his winnings like that?

Thanks for your help.

Re: Staking a buddy (take 2)
 

Not trying to be a jerk here, but you made the first deal without any help - why are you asking 2+2 for help now?

Dogmeat [img]/images/graemlins/spade.gif[/img]

Re: Staking a buddy (take 2)
 

[ QUOTE ]
Here's the short version: I staked a friend 2k. I got 25% plus all his rakeback (if he loses, it's on me). Two weeks in he was up and cashed out 1,100 (for bills). I took 25% of that as well. Then he lost the rest. Interestingly, between the rakeback and the money from the cashout, I've gotten a return of exactly 2k. Now what the hell do I do?

Do we just start over? Would you alter the deal? How do you feel about him cashing out only part of his winnings like that?

Thanks for your help.

[/ QUOTE ]

He generated roughly $1750 in rakeback off of a $2k roll? Over what period of time? Sounds to me like he was playing way over his bankroll.

Edit: Unless he was like 8-tabling 3/6 or something like that.

Re: Staking a buddy (take 2)
 

This is why you can't have an ambigous statement in an agreement such as he will pay you 25%. 25% of what? Each time he cashes out, every year 25% of his bankroll? Every month? For life? Until he gets a certain bankroll for himself?

Re: Staking a buddy (take 2)
 

[ QUOTE ]
[ QUOTE ]
Here's the short version: I staked a friend 2k. I got 25% plus all his rakeback (if he loses, it's on me). Two weeks in he was up and cashed out 1,100 (for bills). I took 25% of that as well. Then he lost the rest. Interestingly, between the rakeback and the money from the cashout, I've gotten a return of exactly 2k. Now what the hell do I do?

Do we just start over? Would you alter the deal? How do you feel about him cashing out only part of his winnings like that?

Thanks for your help.

[/ QUOTE ]

He generated roughly $1750 in rakeback off of a $2k roll? Over what period of time? Sounds to me like he was playing way over his bankroll.

Edit: Unless he was like 8-tabling 3/6 or something like that.

[/ QUOTE ]

I was also wondering the same thing by the way. If he is the type of player to play over his head, which it seems may be the case, then I wouldn't lend money at all. You should monitor your investment. Check his PT every day [img]/images/graemlins/smile.gif[/img]

Also, when he cashed out, the 75% should still be in play for you. He should put that money back online and continue playing low stakes until he can build a roll of his own.

Re: Staking a buddy (take 2)
 

[ QUOTE ]
[ QUOTE ]
Here's the short version: I staked a friend 2k. I got 25% plus all his rakeback (if he loses, it's on me). Two weeks in he was up and cashed out 1,100 (for bills). I took 25% of that as well. Then he lost the rest. Interestingly, between the rakeback and the money from the cashout, I've gotten a return of exactly 2k. Now what the hell do I do?

Do we just start over? Would you alter the deal? How do you feel about him cashing out only part of his winnings like that?

Thanks for your help.

[/ QUOTE ]

He generated roughly $1750 in rakeback off of a $2k roll? Over what period of time? Sounds to me like he was playing way over his bankroll.

Edit: Unless he was like 8-tabling 3/6 or something like that.

[/ QUOTE ]

Interesting. I'm not a limit player, so I know nothing about how quickly rakeback is accumulated. But knowing him, he was probably playing well above the roll.

Re: Staking a buddy (take 2)
 

Actually, I did ask for help. That's where I got the idea to take rakeback.

And I need help now because something here is broken and I can't quite piece it together. I want to give him more help, but I don't want to expose myself to unnecessary risk either.

Re: Staking a buddy (take 2)
 

[ QUOTE ]
This is why you can't have an ambigous statement in an agreement such as he will pay you 25%. 25% of what? Each time he cashes out, every year 25% of his bankroll? Every month? For life? Until he gets a certain bankroll for himself?

[/ QUOTE ]

Yeah. I didn't see that this would be a problem going into it.

Re: Staking a buddy (take 2)
 

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But knowing him, he was probably playing well above the roll.

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Then this is a poor investment and most likely a sunk cost of $2K for you. I wouldn't lend him more money.

Re: Staking a buddy (take 2)
 

First off, your message is a bit confusing to me. He cashed out $1,100 from which you received 25%, or $275. Where does the remaining $1,725 come from, rakeback? If so, did he pay you 25% of his rakeback or 100% of it? Either way does not make much sense, and funding your playing through rakeback is not the sign of a winning player that you should stake. It seems more realistic that he lost $900 playing poker and found another way to pay you back the $2k, thus saving embarrassment and financial guilt (even though the agreement was that you would risk a 100% loss). Just a guess.

Edit: I noticed that a few other posters responded with the preceding question. It’s obviously an important factor to understand.

On another note, you earned 0% on your investment over an unknown period of time. There are plenty of low risk bonds, funds, etc, that you can invest in for >0% return.

And finally, why would your friend need staking if he is a winning player? It sounds to me, from the facts given, that he is a troubled gambler playing outside of his limits. Stay away.

-Andrew

Re: Staking a buddy (take 2)
 

In these vague staking agreements once he cashes out it has to be over.
For example. If he was up 2k the 1st month. He cashes it all out. Hands you 500. keeps 1500
2nd month he busts. You end up losing 1500 while he made 1500. Doesn't sound like a good idea does it?

Re: Staking a buddy (take 2)
 

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[ QUOTE ]
But knowing him, he was probably playing well above the roll.

[/ QUOTE ]

Then this is a poor investment and most likely a sunk cost of $2K for you. I wouldn't lend him more money.

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Agreed. Players like that will never do well in the long run in poker.

Re: Staking a buddy (take 2)
 

[ QUOTE ]
Here's the short version: I staked a friend 2k. I got 25% plus all his rakeback (if he loses, it's on me). Two weeks in he was up and cashed out 1,100 (for bills). I took 25% of that as well. Then he lost the rest. Interestingly, between the rakeback and the money from the cashout, I've gotten a return of exactly 2k. Now what the hell do I do?

Do we just start over? Would you alter the deal? How do you feel about him cashing out only part of his winnings like that?

Thanks for your help.

[/ QUOTE ]

It's seems to me that you are a winning poker player. Your friend see's the easy money rolling in for you and wants in on some of the action to pay his bills.

You want him to be happy and being the good friend you are you try to help him by staking him. But I'm going to take a guess here and say that your friend is a bad player. Breakeven or losing player, your choice.

Poker isnt a get rich quick scheme unless you are a very dedicated individual that can avoid a big downswing early on.

Lend him some books or just give him the 2k since you dont care anyways.

Re: Staking a buddy (take 2)
 

I think you could probably help your frend more by mentoring/coaching him. Make sure to start by explaining bankroll requirements and variance. Lend him your books. Start him in the kiddy pool. Sweat him.

It shouldn't be too difficult to create a winning $5/10 6-max (limit) or $33 SNG player or whatever. This will help your freind, and you will end up being payed back with substantial amount of rakeback.