100% Buyout vs. Rolling Equity: A Dental Industry Debate
A note before you read further: this article, like the episode it's based on, is a discussion of how to think about deal structure, not advice on what to do. Every deal and every doctor's situation is different. Talk to your own attorney and CPA before making any decisions about a practice sale.
Somewhere today, a dentist is sitting across a table from a buyer with a number on a piece of paper in front of them. That's the scene host Dr. Ryan Hungate opened with on a recent episode of Dinosaurs vs. Disruptors, recorded live at Dykema, where he debated Eric Morin, founder of Tower Leadership and author of Dental Wealth, over one of the biggest decisions in a doctor's career: take the full cash buyout, or roll some equity back in for a second bite of the apple.
Is a 100% cash exit the most disciplined deal a doctor can make?
Arguing for the clean exit, Hungate's case centered on a simple idea: cash is the only part of any deal that's guaranteed. He pointed to doctors who rolled equity and watched it evaporate when a platform got over-leveraged, and cautioned that many rollover promises were made in a different rate environment than the one doctors are selling into now.
Does rolling equity protect a doctor's entrepreneurial drive?
Morin's counterargument: take away a strong entrepreneur's equity stake, and you take away their reason to keep building. His position was that the JV model has matured significantly since 2022, and that doctors with real scale experience have legitimate reason to trust their own judgment over a parent organization's, especially given how often rollover promises have burned people in the past. His test for any deal, regardless of structure: do your due diligence on the organization itself before deciding what to leave on the table.
How does Heartland Dental structure buyouts differently?
Judge Dr. Rick Workman, founder and chairman of Heartland Dental, the largest DSO in the United States, offered a third path that neither debater had fully accounted for. Heartland does 100% buyouts, full stop, no JVs. Instead, doctors get what Workman calls "synthetic equity": half the practice's profits after standard overhead, so they keep an ownership mentality over spending decisions without actually holding equity. Buying real stock in Heartland is entirely voluntary, doctors can wait a year or more before deciding, and average dividends have run meaningfully higher than what Workman gets from his own outside investments.
Workman was direct about why Heartland avoids JVs: partial-ownership structures introduce real legal and operational complexity, and he's seen JV clauses nearly derail acquisitions of otherwise strong practice groups.
Is Workman's outcome repeatable, or survivorship bias?
Hungate asked Workman directly whether his own outcome, building the largest DSO in the country from a single two-chair practice, was repeatable advice or just one enormously successful bet. Workman's answer: the equity piece is only one part of the story. His focus for three decades has been on operational value creation: more patients, better payor mixes, lower costs. His advice to doctors evaluating any platform: talk to enough doctors already inside the organization to find out whether real value is actually being created, regardless of which deal structure is on the table.
What changes if you're 45 versus 62?
Both Workman and Morin agreed the calculus shifts significantly with age. At 45, Workman said he'd take a strong enough cash offer immediately and negotiate terms after. At 62, he suggested doctors are often better off waiting, since buyers value the goodwill of an entire team, not just the departing doctor, and that goodwill compounds the longer a doctor stays engaged before transferring.
The takeaway
Neither debater walked away with a clean win, and Workman's own model suggests the real answer isn't cash versus equity at all. It's how well a specific platform creates value regardless of which structure a doctor signs. As Workman put it, the industry's biggest enemy is ignorance. Doctors who study other practices and platforms closely tend to end up with more, and better, options.
Listen to the full debate on Dinosaurs vs. Disruptors, a Henry Schein One podcast, available on Spotify, Apple Podcasts, and wherever you listen.
Frequently asked questions
Frequently asked questions
Should I take a 100% cash buyout or roll equity into a DSO deal?
There's no universal answer. A full cash exit removes risk but forfeits any future upside, while rolling equity keeps upside potential but ties a doctor's outcome to the parent organization's performance and leverage. Both paths have produced very different outcomes for real doctors, which is why due diligence on the specific organization matters more than the structure itself.
What is "synthetic equity" in a dental DSO deal?
Synthetic equity, as described by Heartland Dental's Rick Workman, gives doctors a share of profit-based upside tied to their own cost and operational decisions without requiring them to actually purchase equity, preserving some of the ownership mentality of a JV without its legal complexity.
Why do some JV or rollover equity deals fail?
Rollover equity value depends heavily on the parent platform's financial health. When platforms become over-leveraged or interest rates shift unfavorably, equity that looked valuable at signing can lose most of its worth, which is why due diligence on an organization's leverage and financial structure matters as much as the deal terms themselves.
Does age affect whether a dentist should sell for cash or roll equity?
It can. Many buyers place significant value on the goodwill of an entire practice team, not just the departing doctor, which tends to reward doctors who can stay engaged longer before fully exiting, particularly later in their careers.