Don’t Lose Your Shirt: Tips for Staking Poker Players
I’ve mentioned my opinion before that all poker players should get involved in staking. It’s a great way to create another source of (semi-passive) income for you. It’s also a great way to help smooth out some of the negative variance you see as a player yourself. The benefits simply outweigh any negatives.
That said, you shouldn’t ignore the negatives of staking other players. This includes having funds tied up, lost or stolen. You should do everything in your power to minimize these risks, so that you can maximize your ROI and give yourself the ability to scale up (more players you can invest in, the more potential profit you can make).
The biggest concern that you’ll face as an investor is losing your money, either from a bad investment or someone ‘rolling’ you (taking your money and running). Having your funds tied up is second. The good thing is that there are things you can do to prevent all of this from happening (prevent, not eliminate).
Do Your Research
One of the most difficult things I’ve faced as a backer is thinking that I’m investing in a solid player and then later find out that he’s a dud
This came with an important lesson. I needed to do research
This isn’t as bad (or difficult) as it may sound. And it’s better to take a few minutes now to research a player then to invest your money into someone who sucks, or worse, someone who might roll you.
The first step I take when researching someone is to look them up on Sharkscope. If you don’t have a Sharkscope account, get one, or pay for a couple hundred searches ($10). It’ll quickly pay for itself.
When I scope someone, I look for a number of things including:
- Overall, are they up or down? Are they up or down in the games they want to be backed for?
- How much volume do they have in the games they want to be backed for?
- Do they have accounts at more than one room? If so, how do their stats look?
- Does their graph look consistent, or does it look like an EKG graph?
I then take this data and decide whether I think this player is profitable or not. For example, if a player is up overall, but has a graph that looks like an EKG, it’s probably a bad investment. You don’t want to deal with his swings (you’ll have to reinvest frequently to make your money back), and it’s possible that he’s just a bad player who got lucky and binked an MTT once
What I suggest looking for are players who have consistent graphs, are up in the games they want to play (preferably overall) and that have a decent sample size, like 5k games. For private staking, I want the player to be profitable — at least a couple thousand dollars.
Check Previous History and References
Another step I take before investing in a player is I check their background. This could be previous ads they’ve put up for investors, or talking to backers they’ve previously played for.
When checking their previous ads (BAPs), I check to see how it went. Was there any complaints from investors, were the funds delivered quickly and was the agreement carried out as it stated in the ad? If there were any problems, you don’t want to invest in that player. There are plenty of other players to invest in, and dealing with problems is not cost effective.
I also check references. You should contact anyone who has staked this player in the past and ask them the same questions (as above). See if anyone (credible) is willing to vouch for this player.
Invest Only What’s Necessary
A big mistake that backers make is tying too much money up into any one investment. The problem with this is that the more of your bankroll that you have tied up into one player, the less you can invest in another. It’s also a higher risk, since the player you gave so much of your bankroll to can roll you.
A way to correct this is to give players one of two numbers — one low, and one high. The low amount goes to higher risk players, while the higher amount goes to better/lower risk players.
For example, say I have a bankroll of $450. My goal is to invest the entire amount into no more than 15 players. This means the maximum I can give each player is $30. $30 now becomes my “high.” That’s what I send to good players. All other players will receive a ‘low’ stake, which will be around half, or, $15.
Note: Another reason why I like this strategy is because it keeps you from investing amounts in players based on who they are or what you have on hand, instead of on research/risk/reward. It can also help you to keep your investments to a minimum, which minimizes upkeep.
But what if you invest in players privately? Well, what I do is give horses about 1.5 to 2 times the number of tables they play (sit and go’s and mtts). So if my horse plays 20 tables at once at $3 a game, I’ll send him a bankroll of $90 to $120. That way he has enough to load a full set, bust a few, and then load a few more to keep going.
Once again, the reason for this is simple. While you and I might need 40-100 buy-ins for the games we want to play, the difference is that we don’t have bottomless bankrolls. Our horses will, so we minimize our risks by giving them only what they need to play their games. This allows us to invest in as many horses as possible. The more horses you can invest in, the better. That way, while one player is bricking his set, another horse is winning and sending you profits.
