Mudaraba (مضاربة) is a contract whereby one side the investor or Rabb ul Mal contributes money and the other side work, being the manager or Mudarib. The Rabb ul Mal bears all losses, and the Mudarib earns a profit share.
Mudaraba is a concept to provide capital to somebody undertaking the work. It could be understood as being similar to the function of an asset manager or employed manager of a company. Legally this concept is established as permissible by the consensus of the scholars and not based on primary sources of the Shariah.
As the profits are shared with the manager (Mudarib) and the capital provider (Rabb ul Mal) but the losses are beared only by the capital provider this mode is also named profit sharing – loss bearing. Before the manager gets his share, the losses, however, if any, needs to be recovered. A wage could be negotiated.