This post will be edited to include staking advice. If you come across any advice that you believe would help the staking community please send one of the marketplace mods a PM so that the information can be added to this thread
The following comprehensive article was written by Bond18
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:
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.
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 ****ing 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.
The following is a sample backing contract for the WSOP events.
Disclaimer: This document was created by a twoplustwo poster and is not endorsed by the owners of this forum. It has not been reviewed by any lawyer. It may or may not be legally binding in your jurisdiction and may or may not be missing vital details that you should discuss with the other party in the deal. Do not enter into deals with people you don’t trust as it is questionable whether this document alone will protect you!
Contract for backing arrangement between  ("Backee") and  ("Backers"):
Adjust percentages as appropriate
1) This Contract will be governed and executed under the internal laws of the State of [Nevada]. All of the terms listed and defined herein are assumed to mean exactly what is stated in the Contract.
2) This is the only binding understanding between Backers and Backee, and no other oral or written modifications to this Contract will have any effect, except for the specific options listed in paragraphs 3 and 14.
3) Backers will provide ("stake") Backee with the buy-ins to play a set schedule of poker tournaments (Attachment A). Each Backer will individually pay 1/2 the total buy-in for all tournaments that Backee enters under the stake, for a total of 100% of the initial buy-ins. In return, if Backee receives any prize money in a tournament, he will first refund ("makeup") each Backer's buy-in percentage for every tournament in full, then pay Backers 25% each of any remaining profits from these tournaments, for a total of 50% of the profits after the makeup is calculated.
4) Makeup is defined as outstanding debt from tournament buyins, accrued on a rolling basis. Makeup money must be paid back before any profits are split. For example, if Backee spends $120k in buy-ins and has cashed for $200k, he must pay $120k to Backers (split 50% each, in accordance with paragraph 3) before the remaining $80k can be split as profit. The final $80K is then divided between Backers and Backee on a 25%/25%/50% basis, again in accordance with paragraph 3.
5) If Backee owes makeup at the end of the schedule's completion, or if Backee does not owe makeup but wishes to continue on the stake, Backers have the option to continue this Contract in exchange for providing a further $100k in buy-ins. This means that Backers have a right to stake Backee in any live poker tournaments of their choice – meaning the only live tournaments Backee may enter must be preapproved by Backers under the terms of this deal – until another $100k in buy-ins has been accrued. The terms for this further stake will be identical to those in this Contract, and any existing makeup will continue to accrue. If this option is exercised and ends with the Backee still owing makeup, this Contract will terminate and the Backee is released from all obligations to repay it unless a new Contract is entered into by mutual agreement.
6) Backee may leave the stake at the end of the set schedule of tournaments only if Backee does not owe money in makeup, and in no case before Backee's play in the World Series of Poker Main Event has concluded. For future staking following the listed schedule of events, Backee may leave any time the stake is above the initial investment (including any makeup owed).
7) Any time the overall net profit on the stake, after any makeup has been deducted, exceeds $200k, Backers and Backee will immediately split the profits as stated in point 3. Profits will also be split after any individual win exceeding $400k. The final split of any profits will occur at the completion of the listed schedule of events in Attachment A, unless otherwise agreed upon by both parties as per points 4 and 5 above.
8) All local, state, federal and international taxes, if applicable, are the responsibility of the individual receiving their share of the proceeds under this Contract. Neither Backers nor Backee are responsible for any taxes other than those they themselves may incur as a result.
9) Backee agrees not to be staked by anyone else in any live poker tournaments during the duration of the stake.
10) Backee is not obligated to play all of the tournaments on the list, although he is obligated to play any live poker tournament he enters while the Contract is in effect under its terms.
11) Backers have the exclusive right to veto, modify or accept any attempt of Backee to trade a percentage of his profits with any other player in any given tournament(s). If a trade is accepted by the Backers, Backee and the player must exercise their agreement in writing.
12) If a tournament does not take place for any reason or if Backee fails to enter any given tournament, Backee owes Backers a refund of that tournament's buy-in.
13) Backee is alloted an $8k maximum $ spent on buy-ins (including both rebuys and add-ons) for each $1k rebuy tournament. Any $ not spent on rebuys must be refunded to backers.
14) Money to enter any given event must be recieved by Backee by the morning of that event, unless all parties involved agree to arrange for Backee to receive it at a later time.
IN WITNESS WHEREOF, the Parties hereto have executed this Contract as of the date first written above.
[insert schedule here, on a new page - title "Attachment A"]