I’ve had this segment requested a number of times and there seems to be a lot of questions and misinformation within the community about staking arrangements. I’m not the most qualified to speak about being a person who is staking (which is fairly irrelevant since very few reading are interested in starting a staking empire) but I do feel quite qualified in talking about being staked. First, a little history in my experience being backed.
Outside a couple of one off deals I had in tournaments I’ve had two large backing experiences. The first was with a friend from Milwaukee named Rob who knew I had come close to busting my roll. I approached him about backing and he was pretty eager at the chance since he knew I worked quite hard at improving and was trustworthy. Our starting deal was a fairly strange one, he gave me a roll of $10,000. If I lost it I was expected to pay back half through whatever methods I ended up making money from (that is, one day getting a job) and if I won he got 1/3rd of the profits. Basically, I was half staked. I was under Rob from around December 2005 until September 2007. In that period I think I made Rob something like $60,000 for himself, though I’ll never be entirely sure. Our basic arrangement was that I played whatever I thought was appropriate, but always okayed what I intended through him ahead of time and kept things within the bankroll. Our deal ended very amicably with him having made a sizeable profit and my having built a considerable roll with minimal risk for myself. Rob had both my online and live action, though if I chose to take an event off and play it for myself that option was always available to me.
My second and better known arrangement as been my deal with Timex . I told Timex around April 2007 that I’d be going to the WSOP and if he wanted to do any backing for the events I was open minded. Timex put a team together and had us sign contracts that said we were obligated through the entirety of the World Series. When the series was over I had lost him $61,000 and he asked if I wanted to keep going in future live events. We kept the deal running and also included the highest stakes online tournaments (mostly 1k buy ins and occasional FTOPS and WCOOP events) which I am too nity to play. At one point with Timex I was in over $125,000 worth of make up, but at the current point the number sits around $90,000. Our deal is 60-40 in his favor and he is accountable for all loses.
Now on to less self absorbed content; the most frequent question I see asked about staking is what a standard deal is. It’s hard to say exactly what the standard deal is, based on the quality of player, the stakes he’s playing for, his volume of play, whether he’s doing both online and live, etc. It seems though that the majority of staking deals are either 60-40 in the backers favor with make up or 50-50 with make up. As far as deals with no make up are concerned (often done for a single event situation) the standard seems to be 80-20 in the backers favor, though considering the variance involved there those numbers can fluctuate to a good degree.
Next most frequently asked seems to be how to get staked. This is a pretty elaborate topic. I think a list of qualities and steps towards getting backed will be appropriate here:
1. Honesty: First and foremost a player who wants to be backed needs to be considered trustworthy. If you don’t have this you are pretty much useless to a backer. Backers don’t want to operate like babysitters and they don’t want to have to deal with players who might be lying, stealing, or omitting details to them. Having an honest reputation within the community goes a long way.
2. Communication: A player needs to let his backer know what he intends to do and how. He needs to let him know what he needs and what he’ll provide. One of the most common problems in backing arrangements is a player playing an event and the backer and player not being entirely sure if the other thinks he has his action. If there is any event you either intend or hope to play, you always must let your backer know in advance to get approval unless he has given you free reign ahead of time.
3. Quality play: Smart backers know that skilled play is considerably more important than results. I can’t stress enough that just because you have some killer results doesn’t mean you deserve backing. There are plenty of random donks who run hot over a small sample and final table or take down a few tournaments and seem to think they are now entitled to a sweet backing deal. A backer wants to see a quality thought process and skilled play much more than he wants to see a few big tournament scores. If you want to establish a reputation for quality play you really ought to be contributing to strategy discussion in poker forums. It’s not only a great way to improve and learn from some of the better minds in the game, but it’s a way to prove that you think deeply about the game as well. When approaching a backer who is less than familiar with your play be willing to submit a number of animated hand histories for him to evaluate. More can be learned from this than giving them a link to your OPR stats and saying “look how much I crush dude! Ship the stakage!” As Timex puts it: “one thing to keep in mind is that even though you may be a profitable player when covering 100% of losses and getting 100% of profits, that isn't equivalent to being profitable covering 100% OF losses and getting only 60% of profits (which is the situation that the backer is accepting). So if you are a reasonable winner at your games, and think you would like a backing deal to play slightly bigger games, put yourself in the backers shoes and realize that if you aren't killing the smaller games, its difficult for you to be profitable enough at the bigger games to make it a profitable investment for the backer. And also, don't PM me, I'm more or less done looking for new horses at the moment.” Thanks boss.
4. Be easy going and accommodating: A backer doesn’t want to deal with someone who is demanding and inflexible. If a backer asks you to do something that’s reasonable, such as not play a certain tournament, don’t get your fucking panties in a knot and your ego offended. It’s okay to tell a backer you’d really like to play a certain tournament, but going on and on about how massively +EV you are is annoying and depending on who you are and which tournament you’re talking about, possibly delusional.
5. Keep good records: Both the backer and the player should be keeping records. This will prevent possible mix ups in the future. Nothing quite dissolves a backing arrangement like an argument over money, so make sure you keep close enough track of what’s going in and out that this shouldn’t happen, and if it does, it’s easily rectified.
6. Approaching a backer: It’s pretty well known who the main backers are in the online poker community. The most normal way most are approached is either through PM or email. If you’re some nobody messaging out of the blue I don’t like your chances. However, if you have well respected friends in the poker community who are willing to vouch for your ability and trustworthiness this will help. Be mindful though, that establishing yourself in the community ahead of time is pretty relevant. If you’re a new player who has zero reputation, a few good results, and few connections your chances of getting backed are slim to none. Most of the major backers get numerous requests for backing a day, so your reputation needs to proceed you to have a realistic shot.
Next, people often ask ‘is backing right for me?’ First of all that depends on what you’re trying to achieve. Most people seeking backing are looking to get backed for what they can’t afford, and among internet players that mostly means being backed for live play since the buy ins are so high. Most players would obviously prefer to be staked only for live play and keep online for themselves, though these deals are not terribly common. The majority of backing deals, especially for less established players or new to the backing scene, are for a combination of online and live poker. You need to consider though, that in this kind of deal you run the risk of accumulating a high amount of live make up and then having to work it off with all your online volume, meaning you have no actual income for perhaps months at a time. These kind of backing deals give you the opportunity to make a large live score, but conversely put you in a position you’ll see zero online winnings if you run bad live.
We should also discuss make up. For those who aren’t aware make up is similar to debt but not the same thing. Make up is what you are down on your backing arrangement, but not necessarily money owed to your backer. That is to say, if you are in make up for $50,000, and have a net worth of $100,000 and for some reason are no longer able to play poker, you do not owe the backer $50,000 out of your own money. As far as leaving a backing arrangement in make up for no reason goes, unless you are under contract there isn’t necessarily repercussions in the traditional form of something like a lawsuit (or broken legs) but there are factors to consider. First of all if you leave a backer while in make up for no good reason it is very unlikely you’ll ever find another backer since word of your actions will get around. Also, some would consider this unethical, and it is a considerable grey area of morality. While you indeed have the right to opt out of your staking arrangement while in make up for no legitimate reason, the damage it will do to your reputation in the poker community is something you need to weigh it heavily against. A backer and a player need to set the conditions of what happens when a player is in make up but wants to change or leave an arrangement ahead of time.
Lastly there are two quick questions that often come up. First, in the case of FPP’s, who is entitled to them, the backer or player. The vast majority of the time it is the player who is considered entitled to the FPP’s. The other issue deals with expenses, travel and accommodation can be quite expensive in regards to live poker. While there are some deals that include these, the majority of the time the player is expected to pay these out of pocket.
I hope this settles some of the confusion.