This is a discussion on how to calculate backers payout within the online poker forums, in the General Poker section; Can someone give me the formula to figure this out?
Lets say i sell a live package for $8,000 and sold 70% of my action and
I dont understand what exactly is that you want to know. If you sold 70% the backers will have to put $5,600 if there is no mark up. If you dont make it itm and there is no make up everybody loses their money. If there is make up you will have to pay them back the percentage agreed later on. If you win $100k they get 70% ,which is 70k and you get to keep the rest. If you sell 100% of your action then you have to subtract the the stake and pay the backers and split the profits according to the agreement made.
I noticed most people selling action across various forums do not list what the split is. Usually it just states (ex. Selling 50% of action and then what share prices are)
I want to know what is the industry standard live backing formula assuming no make up or mark up.
Stake back then profit split or just total bankroll split after package ends?
When you are not selling 100% then its the same thing whether you give stakeback and split profit or just split winnings. In this example if you win 100k and give the backer his money back which is 8,000x0.7=5600 and you keep your 8000x0.3=2400 then the profit is 100000-5600-2400=92000. The backer gets 70% which is 92,000x0.7=64,400. In total he gets 64,400+5,600=70,000 which is the 70% of the total winnings. It is clearly the same thing