Partner and Profit Sharing

Well first of all depending how much of a % of the venture you own, you should receive that back from the profits minimum. Then there are your skills and knowledge that you bring - would the hostel be profitable without it? Could it operate without you at all? Are you the driving force behind the project? Is the primary investor just a backer? Are there any other partners to worry about? What percentage do you think is fair for you?

Ok, how much of the financing is your backer providing, percentage-wise? If you prefer not to give an exact figure, you can give us a range if that's better. And how are the shares held in the company? Is it setup for your backer to have the majority of the shares? A 50/50 share of profits wouldn't be out of the question. You could also negotiate (in writing) that once the profitability increases, you get a larger percentage. For instance, it might take a year or two for the hostel to make a decent profit, and your backer (if they are providing 75%+ of the finance) might want some returns (even if paltry), or have the majority of his investment returned to him in dividends.

For instance, as the hostel gets profitable as times go on, in year 1 you get 30%, in year 2 you get 40%, in year 3 you get 50% and in year 4, you get 60% for example. Or if he gives you a $100,000 as investment, you can get a higher return once he gets 50% or more back from their investment.