The WSOP is halfway complete which means this topic is slightly late but as people are posting packages for the main event, the info is highly relevant. If you know or follow any poker players, seeing information about a “package” has happened. It’s them putting together a list of events they’ll be playing, an offer for you to buy a piece of their action, a markup rate on your investment, performance info, and usually some terms & conditions.
What inspired this post was some of the outlandish packages I’ve seen out there. People who claim to be professional poker players but seem more like Ponzi scheme racketeers who happen to play poker. I want to give a warning to those who might invest in such poor offers and I want to warn players against creating such packages. If people waste their money on such things, they’ll stop investing when they don’t see a good (or any) return.
If you’re going to invest in players, here’s the factors I evaluate that you may find of use
1. Skin In The Game
First thing I always look for is how much of themselves a player has. I generally prefer people who have at least 50% of themselves. You want a player to believe in their own ability and have a vested interest in their own success. For me, 65% would be the bottom number I’d consider. Less than 1/3 of themselves and I start to wonder why they’re playing
2. Mark up
Markup (MU) is a hot point of discussion in the poker world at the moment. Lots of people out there with some outrageous MU. Markup covers administrative type stuff for the player. Collecting and distributing shares, tracking and, if you’re both lucky, tax items. To me, an ideal MU is zero, but realistically somewhere in the range of 1.2 and capping around 1.35 tops. I’m ok with a discounted MU to a person buying a larger piece of action. Less admin for the player, it only makes sense. Packages should show the calculations of MU for you to see easily.
Players charging a MU of 1.4 or higher baffle me. People who invest on rates higher than that seem like they hate money or have never done any financial investment. Going back to skin in the game, if the MU is high and they sell a large piece of themselves they have no skin in the game. For the truly obnoxious, they could bust every tourney on your dime and still walk away with a sweet profit. Check out the examples below. Sadly, that 80% at 2.5 is something I’ve actually seen out there.
|Pkg Amt||Piece sold||MU||Total to Player||Investment in Self||Inv %|
When the MU is high and the piece for sale is as well, you have to ask yourself, is this person building a bankroll by being a poker player or just by soliciting from foolish investors? If it’s the latter, why would you want that to be your money?
When looking at stocks or investment funds, you always look at performance. If you’re not, you should be. You should do the same for your poker investments. Momentum has a lot of influence on mindset. For live action, Hendon Mob is a good place to start. For online, SharkScope is where most people provide results that I’ve seen. Consider both when you’re looking at investing. Be skeptical of those who can’t or won’t provide results.
Long Term Results
Consistency is a great thing. If you look at someone’s results and see 4 or 6 month gaps without anything significant, it is reasonable to find out why. I prefer to invest in people who have good results throughout the year because I consider that related to the next few points.
Not a commercial for The Secret or a Cult but the player you’re investing in should have a positive attitude, confidence in themselves and their ability and be prepared for the time commitment involved to the package they’ve put together. If they’ve never played a tournament series and are proposing they play 50 events, is that really something you think they can do well?
Is the person enjoying life or are they talking about jumping off balconies? End of the day, poker is still a game, and fun should be had. People do their job better when they’re happy, that’s an absolute fact.
Sphere of Influence
This isn’t a technical item you can do hard analysis on but it is something that factors greatly in my valuations. Do they have a good support network, be it players and/or family and friends who are supportive and encouraging? Or do they have that crazy significant other who causes drama and can be distracting? Are they in debt to others? Do they owe money to the IRS? No one wants a piece of the guy who will have a tax agent waiting for him at the cash cage.
ROI and Risk Rate
You need to determine what Return On Investment (ROI) you’re comfortable with and know that it is entirely possible you won’t recoup anything. You also need to understand the risk involved. Risk seems to be downplayed by some players while they tout they huge ROI you “could” get. Sure, if I back you in the main event I could get x% of approx $7 million if you win first, but you as a player have to get through 6-8 thousand players for that to happen. Charging additional MU because of the potential ROI is not reasonable because it doesn’t factor risk appropriately.
If you got this far, wow, you may actually want to do this investing thing. If you have the money to do it responsibly, find some packages you’re comfortable with and go for it.
For me, I’m a huge fan of the long sweat. I like to invest in a package that has 7-20 events. It helps fade the variance that is a natural aspect of poker. I saw this package after I had made my commitments, but if I had the funds, this is the kind of package I would’ve been all over. Although I don’t know him personally, we have a ton of mutual friends. I like his mindset, and his selection process. The MU on individual events is interesting to me. This package got snapped up quick and you can see why.
Cylus Watson Package (reposted with permission)
I’m planning a trip this summer so I’m saving most of my funds for that but I did make 3 investments this summer. All 3 happen to be women but that was a small factor to why I selected them. All 3 meet my criteria above. Reasonable MU, consistent results, great mindset, and a supportive network around them. I have 10% of someone in the Stud event, 5% in a package of 7 events and 1% of a new movie star in the Main Event. That’s my only main event action at the moment.
My first staking was with Katie last year. I had 1% of a 25 event package of which, she played 23. I got a 34% ROI on my $310 investment. I love Katie’s attitude and her mindset is spot on so I actually called dibs on investing again back in January. This year’s package is smaller (fewer events) so I have 5% and I’m excited
Katie Dozier event package (reposted with permission)
In addition to the funds invested, I’m sharing my good Canadian juju with all I’m investing in. Canadians have done super well at the series so far so it certainly couldn’t hurt. :)
Tips for Players
- Investors can be a great thing. Extra moral support, not wanting to let them down, etc. Being reasonable and realistic is better for you, them and the prospect of future reinvestment. Think of it as “You can shear a sheep many times but only skin him once” Gouging happens once. Good investments can happen time over time.
- Be professional. You have lots of resources available to put together a package and for invoicing. Use them. Be prompt in your repayments and it is reasonable to expect investments when stated. Know that you cover your own action til you have the money in hand.
- Don’t lie. Tweeting a fake bust out hand almost always gets caught. If you’re not up for an event, back out and issue a refund. Tweet your entry slip or table info and reasonable updates. Be focused on the game but keep people informed when you can.
If after all of this, you decide you still want to “invest” poorly in someone with a high MU and overselling value then let me make a proposition for you. If you want to
waste spend money to see pictures of poker chips, let me present a far better option than green felt. I’m selling shares of my upcoming vacation to Spain at a rate of 1% for $25. No discount for larger shares but I will take and post pictures of poker chips at scenic locales at least 3 times per day for the entirety of my 8 days. That’s a mere $1 per photo. For an additional $10 I’ll even include a chip you choose and provide. Guaranteed to be included are photos at:
Cash, Paypal, BofA transfer or POP Money acceptable methods of payment. You’ve wasted money on worse, you know you have.