Taking On Investors

[The Suburbs]

So, any profit from his money invested would be split 50/50?
Say we have a $1,000 profit, I have invested 25% of the bankroll and he, 75%.
Does that mean I would take $250 and then we split the remaining $750?

I believe the standard format is 50% to the players and 50% to the investors. So if you had $1,000 profit, you would get $500 as the only player, and the other $500 in profit would be split according to the amount invested. In your example, he would get $375 and you would get $125 as investors.

 

[Coyote]

I believe the standard format is 50% to the players and 50% to the investors. So if you had $1,000 profit, you would get $500 as the only player, and the other $500 in profit would be split according to the amount invested. In your example, he would get $375 and you would get $125 as investors.

Seems like a reasonable deal to me. I have spoken with this fella and he is still interested. Looks like we are going to start negotiating the details.

 

[Nynefingers]

Seems like a reasonable deal to me. I have spoken with this fella and he is still interested. Looks like we are going to start negotiating the details.

If you go with this split, just understand that the longer the timeframe of the deal, the better for the investor. The shorter the timeframe, the better for the player. This is because over a longer period of time, there is less likelihood of a loss. I have used a similar arrangement in a couple of my deals even when the game was a very short term opportunity. I have modified it so that the profit split would ultimately result in 50% of the EV for the players and 50% of the EV for the investors. This is not the same as 50% of the profit to each, because in that arrangement, the players benefit from not losing anything if the bank ends up in the red. The lower the likelihood of this happening, the less significant it is. The resulting arrangement rewards the investors with somewhat more than 50% of the profit on a win to compensate for the times when the investor takes all of the loss. To ensure fairness, before we start playing, we establish the hourly EV, hourly SD, and what expenses will be considered. Then depending on how long we are able to play, we have a set formula (actually a spreadsheet) that tells us what percentage goes to the players and the investors. If the investor is agreeable to a straight 50/50 split, that will be better for you. I went to the trouble of ensuring it was a 50/50 EV split because I was the largest investor.

 

[LV Bear]

Team Distribution Spreadsheet

I still advise against doing this, but it appears you are going forward. This link may prove helpful to you: http://www.bj21.com/spreadsheet.shtml

Good luck with this situation. Please keep us updated.

 

[Coyote]

I still advise against doing this, but it appears you are going forward. This link may prove helpful to you: http://www.bj21.com/spreadsheet.shtml

Good luck with this situation. Please keep us updated.

Thanks LVBear584 but I am not a GC member so I was unable to access the file. I will keep you guys updated.

Thank you so much,
Coyote

 

[Coyote]

If you go with this split, just understand that the longer the timeframe of the deal, the better for the investor. The shorter the timeframe, the better for the player. This is because over a longer period of time, there is less likelihood of a loss. I have used a similar arrangement in a couple of my deals even when the game was a very short term opportunity. I have modified it so that the profit split would ultimately result in 50% of the EV for the players and 50% of the EV for the investors. This is not the same as 50% of the profit to each, because in that arrangement, the players benefit from not losing anything if the bank ends up in the red. The lower the likelihood of this happening, the less significant it is. The resulting arrangement rewards the investors with somewhat more than 50% of the profit on a win to compensate for the times when the investor takes all of the loss. To ensure fairness, before we start playing, we establish the hourly EV, hourly SD, and what expenses will be considered. Then depending on how long we are able to play, we have a set formula (actually a spreadsheet) that tells us what percentage goes to the players and the investors. If the investor is agreeable to a straight 50/50 split, that will be better for you. I went to the trouble of ensuring it was a 50/50 EV split because I was the largest investor.

Thanks for the advice! I llike the way you have explained it here. I will read it over and make sure I get it all.

Thanks again!
Coyote

 

[Meistro]

Form a team bank, with a 50/50 split for investors and players. So if he invests $1000 and you invest $1000 and you are the only player, then you get 75% of all profits.

 

[Splittingten's]

Every time I try to get an investor they totally miss understand the math and then go on about talking about their system they use to beat roulette. Then after that these guys are used to winning thousands and thousands so 25 dollars in ev is like not even worth it to them.
Makes me wonder how some of you do it when i see posts like "some guy just fell out of the sky and offered me 20k. Looks like i better keep 90% of the profits to keep it fair." It's actually driving me a little crazy lol

 

[Meistro]

You just do a 50/50 split between players and investors, nothing complicated.

 

[KewlJ]

I am not sure why threads from 6 years ago are being bumped answering questions from people that don't appear to be around.

But investors and players seeking investors should really be something only for high end, high limit play. And the player(s) will have to be a proven skill level and likely known. Getting into investor/player partnership at lower limits like green to black just doesn't make sense for either side. The player making less that 100/hr Ev really doesn't want to split winnings. And for the investor, why invest in something that has such a limited return an high risk? .

 

[Meistro]

The return for investing in a winning blackjack player is pretty high as far as investments are concerned. For example, if u had a 5k bank and were making $30 / hr that is $15 / hr in expected return for the investor. 0.3% hourly ROI is pretty good, especially if the horse was putting in full time hours. 10 hours of play a day would be a daily ROI of 3%. An annual return of 10 to 15% is considered pretty good in the investment world afaik. And this is an investment that has the potential to compound on a weekly or monthly basis as winnings turn into higher max bets.


Of course there are a number of pitfalls as well, for example if you back someone who is not a winning player, or in the always present danger of theft, which would be difficult to audit as it is a cash business.

I think it would make a lot more sense to most investors to stake someone at low limit play as opposed to high limit play. Better to risk 5k than to risk 50k.

 

[KewlJ]

I think it would make a lot more sense to most investors to stake someone at low limit play as opposed to high limit play. Better to risk 5k than to risk 50k.

I have never considered investing in another player. I did front my brother a bankroll to start his career, but that was family. I think if I was considering banking another player (not related to me), my big question would be if this player is legit and any good, why can't he raise and win a bankroll? I mean raising 5 grand isn't that hard is it?

 

[LC Larry]

my big question would be if this player is legit and any good, why can't he raise and win a bankroll? I mean raising 5 grand isn't that hard is it?

This is spot on 100%.

And it's things like that why I don't believe 99% of the "top pro" poker players are actually winning players. Most of them need backing by other players, online poker sites, etc. You also always see them "borrowing" money from each other. There are many different threads on various sites about these guys not paying debts after going bust.

Take all of this away and these guys will go broke quick! Just look at all of the backing Mike Matusow gets from Hellmuth!!

 

[Splittingten's]

Well, I can think of one reason as to why someone with a 5k roll would like a 5k steak. There's a joint in vegas that has a 5 dollar 6 deck game and a 10 dollar DD game right next to eachother. 5k roll you must play 6D game with poor pen. 10k roll you can play the DD game with the same pen and a smaller ROR. Even if you're playing a smaller game, a 10k roll has a significantly lower ROR than a 5k roll AND if you're the only player you can make a little extra juice by even as little as 5%.
In conclusion, better game, lower ROR, potentially more profit and moral support. Sounds like a good deal to me.

 

[Splittingten's]

The real problem with staking someone with a small roll is that they're a flight risk. Poor people do desperate things. On a perfect world steaking a winning player is just a great idea, everyone's happy. You make money sitting on the couch and the playet makes money while reaping the rewards of a larger roll. The problem is that poor people do desperate things and are likely to skim off the top or flat out steal your money. It's sad and unfortunate but it's just the reality we live in.
I mean, you don't give a starving child 100 dollars to go buy 80 dollars worth of grocerys for you and to keep the change. You will nerver see their assez again lol

 

[KewlJ]

The real problem with staking someone with a small roll is that they're a flight risk. Poor people do desperate things.

Exactly! A player making Ev of $8-$10/hr isn't going to want to split that with an investor. Not just a flight risk, how about the player claiming losses when he won or claiming less winnings (that he has to share). I just don't see this as a good investment. Not a sound situation.

There's a joint in vegas that has a 5 dollar 6 deck game and a 10 dollar DD game right next to eachother. 5k roll you must play 6D game with poor pen. 10k roll you can play the DD game with the same pen and a smaller ROR.

Well there are many joints in vegas like that, especially on the local's circuit. And most of those situation, the 6 deck game is the better game, just because the DD is often what we refer to as a "counter trap". That doesn't mean the game is specifically offered to entrap counters, but that what "appears" to be the better game is just "hawked" to closely.