Based on what you've said elsewhere in this thread, I am going to take a very different tack than the rest of the folks so far.

> Last year's profits were zero.

OK, so the the shares aren't likely worth very much.

> He says he doesn't have a forecast for this year's profits.

> Based on his forecast $600k in revenue and a market-sector average of 6% profit, he estimates $36k profit this year, and thus a valuation of $72k, making my 3% worth $2160.

Well, it kind of seems like he does. That said, his math is voodoo math. He can pretty much make it say whatever number he wants it to say.

> I don't think the company will get bought by Google,...

So your shares will not be like lottery winnings, and anything you make will most likely not be life-changing money.

> but I think they have the potential to make $100k-$200k a year on their current track

$100k-$200k is a salary, not profits that you will see any part of.

This is the bit of the story that I want to emphasize. You have a minority stake in a small business (not what most would call a "start up"). It is trivially easy for the majority owner(s) to make decisions such that you will never see any distribution of profits. They can bump up their salaries, they can give themselves bonuses, they can go on team-building retreats to Cancun -- the ways that they can legitimately spend any potential profits is mind-numbing. When you're talking about $100k-$200k of "profits", you have to expect that your share of that will round to $0.

> If the founder wasn't asking to buy me out I'd probably just sit on my shares.

After reading my comment, I would like to ask why (serious question). I think your trying to optimize something that very far out of your sphere of influence. To be honest, the value of the time that you have spent thinking about this is probably worth more than any reasonable market value.

If I were you, I would do something like counteroffer $10k while fluffing they guy's ego, expect to negotiate down to ~$5k (depending on your negotiation skills), but take whatever I can get. You should fully expect that something will happen that will benefit the new owners of your shares -- maybe an acquihire, maybe a big contract, maybe VC funding. Whatever it is, just let it go. You were never going to see any of that money anyway.

If you don't like the guy or you just don't like the situation, figure out what number below which you will gain more psychological value by not selling. Whatever number that is, set that as your base that you will not go below, and expect to get that number and be happy with it. Depending on your motivation, this might just be a dick move, or it might just be how much you're willing to pay in opportunity cost to prove to your peers that you won't be potentially manipulated.

For me personally, I would do what it takes to get this off of my plate. I would want to minimize the brain cycles I spend on it. Because I like negotiating, I would probably do the following:

- Counteroffer $10k while complimenting him and the company and watch how he reacts.

- Based on his reaction, I would let him negotiate down to somewhere in the $5k to $8k range (this really depends on the company and how well you know the CEO).

- I would then do the friendly walk away move as I tell him that my offer is good for a week.

- He will call back with a lowball offer. I will stick to my guns.

- He will acquiesce.

- He will also probably try to do some last minute bullshit when things are signed. I would have a lawyer look over the paperwork before I signed anything.

- I would celebrate with dinner at State Bird Provisions once the money is in the bank.

Best of luck!