In the first two posts in this series, I tried to explain why Why Every Startup Founder Should Play Poker and how, beyond just building relationships, Poker is “Wax On, Wax Off” for Startup Founders.  For those persuaded, this post is meant to provide some guidance for founders who now understand that poker, (played right and with the right people) is a value use of time for startup founders.

So what’s a poor, non-poker-playing founder to do? In short: play some poker! Here’s a road map.

First, you gotta play with real people, preferably other founders and investors. Online poker is virtually useless for founders wanting to derive startup-relevant value from the game. (That topic is for another time.) No-limit Texas Hold’em is the best game because it’s simple to learn, easy to find, and maximizes the ‘wax on, wax off’ effect.  

If you’re new to poker, start out at 25¢ – 50¢ blinds. A “micro-stakes” game like this will give you a feel for the flow of the game without being distracted by how much money you could lose. The “right” amount of money to sit down with at a game like this is $20 – $50. Pace yourself if you keep blowing through that buyin in less than about an hour — you are probably playing too many weak hands.

As your skills improve, make your way up to $1 – $2. Entering this game with $100 – $200 is a reasonable buyin. Only move past $1 – $2 if you light your cigars with $100 bills. The pots in games bigger than $1 – $2 can get unexpectedly large and the only additional lessons to learn for founders at those levels is how to cope with fear.

Tournament-style poker games are harder to find but I believe they offer the best opportunity for newbies to improve as a poker player and as a founder. Tournaments also lend themselves more to relationship building than cash games because the emphasis is on winning the overall game, not on increasing your profits with each hand.

In tournament-style poker, everyone starts with the same number of chips and whoever lasts the longest wins the most. The pot created by everyone’s buyin is distributed among the top finishers. A very small tournament game (9 – 10 players) will often be winner-takes-all. As the number of players (and thus the pot) increases, the number of winners increases as well. At Startup Poker 2.0 events with 40 players we usually pay out the top seven players — 7th place basically wins back their buyins.

Learning to play poker in cash games (where you can put in as much money as you like for as long as you can stand it) isn’t as well suited to startup lessons and can be an expensive proposition. But in tournament-style games, the buyin is predetermined. You can’t just reach back into your pocket and pull out another ‘hundy’ when you lose your chips. Because your losses are limited to the amount of your buyin, you can focus on playing the game without the undue influence of fear. Some tournaments allow multiple buyins, but it’s usually just a few. Remember, it’s not about the money.

The pace of tournament poker also provides a better learning opportunity. If you’re like every other poker player who ever learned the game, you’re gonna play too many hands. Part of the problem is you just don’t know yet what a profitable situation looks like. But the bigger challenge is that it takes superhuman patience and discipline to play poker well, even once you know what a profitable situation looks like. But it’s just more fun to play hands than to sit and wait. So you will. And you’ll lose a lot. But tournament-style poker is more forgiving of both your lack of skill and lack of patience.

There are multiple “startup poker games” going on every month in every big tech city in the country and, I suspect, most of the medium-sized tech cities. These games are hosted by lawyers, bankers, VCs and billionaire/millionaire/thousandaire founders/investors. Ask around… you’ll find them. But know your budget. The stakes at some of these games are not for mere mortals and unless you have a private wealth manager on speed dial you may be out of your league.

The games hosted by service providers are usually pretty reasonable stakes but probably not where you want to start if you’re new to the game. Think of these as advanced-beginner level. These are also sometimes schmooze-fests intended as an opportunity for law/tax/wealth/real estate firms to spend some quality time with existing and potential clients. No harm in that… service providers are people too and the wine is usually pretty good. You’ll also meet some good people.

If you don’t have a Startup Haven chapter in your city, the best games (especially if you’re just starting out) are humble home games started by some founder or investor who enjoys playing the game with friends and colleagues. Lower stakes can be found here, which makes it easier to get through a night of really bad luck without feeling like a degenerate with poor judgment.

Finally, there’s “the apple.” In poker parlance, “the apple” is the big game, the high stakes game, with the biggest sharks (the best players) and sometimes the biggest donkeys (the players who are out of their league.) Some of these games are renowned, hosted and attended by tech and poker luminaries like Chamath Palihapitiya, Jason Calacanis, Phil Gordon, Phil Hellmuth, David Sacks and others.

If you’ve played a little poker, you might think it’d be great to get the invite to play with these guys. “Hey, Chamath, nice place you’ve got… where’s the beer?” Well, that’s just what someone who’s played “a little” poker might think. If you haven’t played a LOT of poker at a pretty high level and if you don’t have a gangster’s bankroll, then you really don’t want to get that invite. You will very likely end up “donking off” a lot of cash for the privilege of bragging that you played poker with Jason. Perhaps after your next exit or after you close your Series C and you’ve “taken a little risk off the table.” In the meantime, you’re probably not in danger of getting that invite in any case.

I’ve played north of a thousand hours of poker but I cringe at the thought (fantasy really) of getting an invite to play with any of those guys. It’s not because I don’t think I have the poker skill to play against them; I believe I do. It’s because I don’t have the budget to play the game right at the stakes they play — I would be a scared little bunny at their games. Table selection is one of the fundamental skills of poker (and startups) so knowing what table you should be playing at is vital. So find the right table. 

The good news is that the stakes don’t actually matter much. Does a billionaire investor get more out of playing poker than a scrappy bootstrapper hoping to move her startup out of the garage soon? No. It’s the same game. Let me put a point on that — it’s the EXACT same game. Mostly you just need to care about playing well, care about improving your game and care about winning, in that order.

Notice that I don’t say “care about the money you could win or lose.” Considering the level you’ll be playing at, the limited amount of time you have to devote to the game and the primary purpose for playing as a founder (i.e., practicing startup thinking and building real and valuable relationships), the money just doesn’t matter. In fact, worrying about making money is counterproductive. Yes, it’s fun to win. Yes, you should try to win. Yes, trash talk the losers you beat that night. But money should not be why you’re playing this game with these folks.

That said, playing ‘freerolls’ (games without a buyin that you just play for fun or some cheesy prize) are not particularly helpful. Neither are “penny ante” games. If there’s no money at stake (or something of material intrinsic value to you) then players tend not to take the game seriously and the people you play against will mostly be terrible players from whom you can learn very little. The dynamics of bets and calls and raises and folds just don’t carry the same meaning when there is nothing at stake. Don’t waste your time on freerolls unless it’s one of your very first times and you just want to practice the motions of the game.

The last bit of advice I have is to study the game. You don’t need a full library

Finally, remember that one of the most important values you will get out of playing poker with other founders and investors is relationships. This is why I want you to play poker. Startups are hard. Every founder needs help. You will need help. If you’re playing poker with other founders and investors, then you’re building a powerful network of friends who will be able to help you. As importantly, you will be able to help them.

Here’s hoping to see you at the tables soon!