I have been backed into a few things, but allways with people I know very well. I am quite thick, therefore wanted to know about the selling shares etc, like 1.2/1.3 etc etc, could someone please elaborate. Each time I have been staked into a tourney, it has been for like 50/50/ 60/40 or 70/30 in there favour I don't understand the selling shares thing.
I think that is a good idea to sell % of yourself in high buy in comps - take Jake Cody for example, he sold shares in the WPT ,yet won an EPT, but IMO, this was a very sensible thing to do, and for everyone who had bought a share, it was profitable.
I think if someone wants to sell % of themselves in touneys, then it's entirley up to others if they choose to buy a piece or not, If you don't like the idea, or you don't think the person can play, then you don't have to get involved or read the post, simples :-)
I'll have a crack at explaining it for you Dreenie:
One way of staking is to buy a set amount yourself and sell the rest to backers. You pay for a certain amount of the entry yourself and then sell the rest at a markup of your choosing. Personally I don't mark up but that is entirely up to you to decide.
Say you play a £500 comp and sell half of your action:
You pay £250 yourself and get the rest from stakers. If you sell at even money 1:1 you just get the other £250 off them.
If you sell at 1.1:1 you charge them £1.10 for every £1 they buy. The £250 you sell will therefore cost stakers £275 total. This obviously means that there's only £225 left to pay so you save yourself £25. The more you mark up the less you pay yourself.
When you have 100% staking for a set amount of equity you can work out the effective mark up as follows:
Say the comp is £1000
You sell 100% for 70% equity. This means that any winnings go 70% to the staker and 30% to you.
This means that effectively they are only buying 70% of you which is £700 worth but it's costing them £1000
If you divide 1000 by 700 this will show you the mark up, in this case 1.43
To work out the mark up of set equity you just have to invert the actual percentage expressed as a decimal if that makes sense?
50% = 0.5 = 2:1
60% = 0.6 = 1.67:1
70% = 0.7 = 1.43:1
80% = 0.8 = 1.25:1
90% = 0.9 = 1.11:1
Other things alter this such as offering stake back first before splitting profits and obviously being on a long term make up deal makes a huge difference.
One off stakes can be worked out as above though and are generally very bad for the staker and require a lot of luck to work out well.
Generally speaking if you put some of the money up yourself and don't charge a markup you have a good chance of selling. You are taking a risk yourself so backers know you'll be trying your best.
If you ask for 100% of the money you are taking on no risk at all yourself so it becomes harder to sell unless you are extremely good or are well liked and can sell to friends.
If you ask for 100% staking for 50% equity you're very unlikely to sell except to friends. The odd $10 comp would be fair enough but a biggy would be very poor value for the staker. A £1000 comp for example the staker is effectively paying £1000 to put you in to a comp where the prizes they stand to win are equivalent to a £500 comp. Obviously when staking a friend value isn't priority number one so it's still possible.
Hope that helps a bit.
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