#1
|
|||
|
|||
Question about selling shares
I was having a discussion with a friend about how to go about selling shares for an event. I want to make sure I have this right because I don't want to screw anyone over, but I also don't want to be screwed over.
So, rather than doing a hypothetical, I'm just gonna do the actual situation, because I'm familiar with all the numbers. The backee is looking for backers to buy %s of his action in three events -- a $2650, a $5200, and a $10,000, for a total buyin for $17850. The backee is looking for a 35% markup, which I understood to mean he retained 35% of his own action. But to others 35% markup just means that you are multiplying the buyin by 1.35 and paying 1% of that figure to buy a share. So like, we can see the difference in this example. If it means we are taking 35% of our own action, we would divide 17850 by .65, and reach a figure of ~$27462, making one share $274.62, and 65 shares would add up to the total buyin of the tournaments entered, leaving the backee with 35% of his own action. If it means we are doing a pure 35% markup, then we multiply 17580 by 1.35, reaching a figure of 24100. This would mean 1% is 241, and 17850/241 is about 74, which means the backee only has 26% of his own action. What I don't understand is why anyone would phrase it in the latter way. Like wouldn't you always be phrasing your backing deal in terms of the amount you kept, rather than the arbitrary number reached when you multiply the buyin by 1.35 (or whatever the markup percentage agreed on is). I'm honestly asking the question, I have very little experience with this, and I want to make sure it's being done correctly. It's just, intuitively, it doesn't make any sense that you would go "I want a 35% markup, which of course means I want to keep 26% of my own action." Thoughts? Would love to hear from people that have a lot of experience with selling shares/buying shares. Thanks dudes. |
|
|