What is a good ROI for an investor that is a silent partner?

Question

Some more facts:

* I'll be running the business (a restaurant)

* I think that the parnter will invest a portion fo the business start up costs

* Partner will be a silent partner / not doing anything with the business

My QUESTION: What is a good agreement between both parties concerning ROI for the person that is investing int he business?

Answer 1

Figure out what a local bank would charge under the same circumstances.  You then might want to add a hundred basis points to it (1%).

If all goes well, buy him out.

Remember 9 out of 10 new businesses fail.  

Good Luck to you, in this economy you will need it.

Answer 2

Return is directly proportional to risk. If you were the US gov issuing bonds, only then can you give 1% above bank rates and get an investor. For private business ventures, which tend to be pretty risky, you are looking for 20% minimum and possibly up to 50% ROI.