Yes, there are three options:
- Cash Out
- Earn Out
- Walk Away
Be paid 1/3 of the value of the company right now. That is paid either from the cash reserves of the company -- or through an equity infusion of the other two owners. Basically they put more money in to buy your shares. Often the other owners will borrow money directly, or guarantee a loan on behalf of the company to support this cash out.
Be paid 1/3 of the value of the company over the next X periods. It is usually a set amount, a percentage of revenue, a percentage of gross margin revenue, a percentage of profit or some combination thereof. The LLC sends you a check every month or every quarter until the balance is paid.
In both of these two models you need to agree amicable on the value of the company and divide by thirds. Or you need to agree to hire an appraiser who does that for you.
It sounds like you are moving on to a new path. Perhaps this dream did not materialize the way you had hoped. Maybe it isn't growing the way you had dreamed. Sometimes we need to just accept that what could have been wasn't and walk away. The cost of figuring out who pays what to who is just not worth it.
I am going to make an assumption. Well two:
- You like your partners. You spent a lot of time with them. And you consider them friends.
- You want them to be successful in their endeavor even if you are not there.
If these two assumptions are true then I strongly recommend you to ensure that there is no ongoing financial tie. Have the end of your participation be the end of you participation. I also would recommended that you strongly consider what the costs to the relationship will be if the LLC has to take a percentage of hard earned cash every month and send it to a
Sometime the right decision moving forward is not the one that maximized personal financial gain.