Hey all, I have the oppurtunity to stake a friend who is very bad with bankroll management but very good at poker. If I can control his stakes it should be a very profitable endeavor. The question is how much do I need to stake him and still have an adequate bankroll myself. I would like to stake him at 200-300 HUSNGS - the stakes I play at. I would assume someone at my stakes needs around 50 - 80 buy-ins to play comfortably. How does throwing another person into that equation work? Would I just assume that he cancels out some of the varience and it's as though I am playing more games? In other words if we have the same ROI and he plays 200 games and I play 200 games it's the same as me playing 400 games in terms of not busting. The other side to the matter is that I only take 50% of the profit so somehow that must figure in to how many buy-ins I need for us both to play comforatably.
Thanks in Advance
Don't send more than 10 buyins at once. It's not that you don't trust the guy, it's just not necessary. If he loses 10 buyins when you're not online, you'd probably prefer to have him take a break from the tables anyways. You also then don't give him the mental crutch of "I need 100 buyins showing in my account to feel comfortable." That mentality always backfires in a stake, since it's a mental weakness that is very easy to get over (if encouraged it's like wearing diapers going into war).
If he has the same edge as you, it is just like you getting in 2x the games without 2x the headaches. The only difference is that you only get half of his profits. I'm going to guess that unless he's a clear and solid winner at these stakes, and unless these are regular speed $200+ level games, that you'll need to get closer to 60-70% on this stake to have good enough expectation to justify the variance.
If this is $230 turbos or something and he has a thin edge, you can still get an edge, you just need to lock him in for more than a few hundred games. The longer the stake is (in terms of # games) the less risk you're going to have. You wouldn't stake this guy for one game, full buyin with you getting 60% even, but at the same time you could probably take 40% with a big smile for a 5k game stake with him. Those are two extremes, you can run calculations to determine your expectation and find out what percentage for what amount of games is worth it to you.
Thanks Rypac
We just finished a stake actually. I staked the first time without putting to much thought into the varience which could have ended very badly for me. I staked him at 100's for 750 games with sort of a weird structure. The structure was as follows.
Normal speed matches count as 2 games
Turbo speed matches count as 1 game
4 man regulars count as 2 games (playing with no partner)
I came up with that given the higher ROI regular tournaments. I suppose 4man withouth a partner should have counted as 3 perhaps.
Luckily it turned out well, took him a month and a half and he made $4700, chopped we each took 2350. His account did not have rakeback which was just outright stupid of us and we didn't realize it until halfway through. The rakeback deal we came up with was I take %75 of the Rakeback.
I know this structure probably needs to be motified but do you think playing 750 games is enough to account for varience given my %50 percent return on investment as well as %75 rakeback?
How exactly do I go about calculating the varience and then from there how do I put that number into the equation to figure out how many games I need him to play and what percent I need to pull from the profits.
You need to estimate his edge then calculate standard deviation for the variance he'll encounter on average. Make sure you're accounting for only half the profits.
750 games sounds fine at 50% if he's a 5% ROI+ winner, though that's just a guesstimate.