When the one partner provides the financing, the other the expertise, the best practice (depending on how the investor knows his partner) is for the investor to provide a small share (10% or even less) of the ownership to his partner and the rest of the reward for the managing partner to be performance-based. Usually both partners agree on few preset (long-term) goals, the achievement of which will trigger increase in the share of the managing partner. By the definition of the goals and of the share increase the investor should make sure that he would get the expected return on his investments and a fair share of the value increase based on the agreed parameters. Effective interim control of the operations and of the financials of the business (and of the fulfillment of the goals and managing partner commitments) by the investor is of prime importance. The funds are provided in installments based on up-to-date performance in the form of a capital increase or loans. On the contrary, in case of underperformance and unless the investor does not decide to quit, any additional financing should be made either as equity financing or as convertible debt in order to dilute the share of the managing partner. A partnership agreement can make or break potentially a very sound business. Otherwise I agree, 2% - 4% ROI does not make any sense.