Equity Models for Associates and Executives: How Ownership Keeps Your Best People

You know what trips up a lot of thriving dental organizations? Not new patient flow. Not equipment. Not even reimbursement chaos. It’s keeping your A-players—those hungry, high-skill associates and the operations pros who actually make the machine hum. And that’s where equity models come in. When done clearly and fairly, equity isn’t a giveaway—it’s a retention engine that nudges your best people to think like owners, make smarter decisions, and stick around long enough to compound results.

In this article, we’ll walk through a practical equity framework discussed by hosts Matt Brown and Dr. Andrew Vallo on Dental Unfiltered. We’ll break down why equity matters, how to structure it for associates, where the guardrails should sit, and when it makes sense to extend a slice to executives. We’ll also talk hiring, onboarding, and that big elephant in the room—vague promises that sour relationships. Let’s make this concrete and usable.

Why Equity at All?

The short answer: retention plus performance. High-performing associates—people who can diagnose well, communicate clearly, and deliver advanced procedures—usually want more than a paycheck. They want skin in the game. If they don’t find it with you, they’ll either partner somewhere else or start their own thing.

Ownership does two subtle but powerful things:

It shifts mindset. Associates who share in distributions and growth think harder about costs, protocols, and consistency. They don’t shrug at waste; they question it. They don’t tolerate slippage; they fix it.

It rewards the behaviors you want more of. Equity ties upside to enterprise value, not just daily production. That encourages leadership, collaboration with treatment coordinators, and a steadier focus on lifetime patient value—without pushing doctors into awkward money talks chairside.

Put simply, equity can keep your ceiling-raising associates on your team and focused on the right scoreboards.

The Starting Line: Hire Like It Matters (Because It Does)

Equity won’t salvage a bad hiring process. Dr. Vallo’s filter is refreshingly simple:

Skill set: Broad and confident. In a general practice, that means molar endo, single-implant placement, surgical extractions/bone grafts, comfort with cosmetic and full-arch conversation (even if you train some elements), and at least familiarity with clear aligner cases. The more you can keep in-house, the more value you create.

Personality: Humble, hungry, smart. Competitive in a healthy way. Kind to the team. Clear with patients about the “why now” behind treatment—what improves if they proceed and what deteriorates if they delay.

This combination—well-rounded clinical ability + emotional intelligence—multiplies production potential and patient trust. Equity then magnifies that effect.

A Practical Associate Equity Model That Actually Works

Here’s the structure shared on the show, adapted for clarity.

1) Gifted (Earned) Equity for Startup Docs

Who: Associates who agree to build a de novo office (no patient base on day one).

What: 5% equity granted after the first 12 months—provided both sides agree it’s a fit.

Strings: If the doctor later leaves, the gifted 5% doesn’t travel with them. It’s attached to being a full-time doc in the practice.

Why it works: It rewards the grind of building from zero and signals real partnership—without forcing a purchase before the doctor knows the culture, the systems, and the growth path.

Profit Distributions: Once that 5% is earned, the associate participates in profit distributions (commonly quarterly, assuming there’s profit and the group isn’t temporarily reinvesting). And if the broader group sells in the future, that 5% participates in the sale value for that office.

Important note on fit: If it’s clearly not working, the organization shouldn’t wait a full year to say so. Luckily, with a rigorous vetting process, this outcome should be rare.

2) Optional Purchased Equity After Year One

Who: Both startup associates and those who joined established offices.

Ceiling: A doctor can own up to 25% of the office they work in. (If they were gifted 5%, they can buy an additional 20% to reach the cap. They can also buy smaller increments—10%, 5%, even 1%. No pressure.)

Valuation Math: Purchased equity is priced at 6–7x EBITDA for the associate at time of buy-in. The group’s overall market value might trade higher (e.g., 8–9x given scale and performance), so associates see an immediate “paper” bump to the broader group’s implied value. This is intentional: it rewards the doctors who help build value.

Exit Clause: If a doctor who purchased equity later leaves, the contract requires a sale back to the company at the lower of (a) their original purchase price or (b) the then-current valuation. Translation: this isn’t a short-term flip. The model is designed for long-term partners who want to share in growth, not arbitrage it for a quick win.

Why a 25% Cap?

Control and consistency. Twenty-five percent is enough for real “owner energy” and meaningful distributions—but not so much that day-to-day decisions become gridlocked. Could you go 10%? Sure. Could you go 30%? Also possible. But once you approach 50/50, you risk tie votes and political friction. Some partnerships thrive at 50/50, but only with crystal-clear rules of engagement and very high trust. For most groups, the 25% ceiling hits the sweet spot.

How to Price Equity Without Overthinking It

Everyone wants the formula; few want the nuance. Here’s the balance the show suggests:

Use EBITDA. It’s the cleanest proxy for core earnings and future cash flow.

Discount associates’ buy-in multiple (6–7x) vs. your likely external sale multiple (8–10x+ depending on scale, systems, and rates). That discount acknowledges the doctor’s contribution and creates modest day-one upside without blowing up cap tables.

This approach is fair, credible, and easy to communicate. And just as important, it’s repeatable.

The Fine Print That Saves Friendships

This next part isn’t sexy, but it’s where most relationships fail:

Put timelines in writing. If you tell a recruit, “We’ll discuss equity in 12 months,” then schedule the meeting before they even start. Vague promises erode trust and production. Clear milestones keep momentum.

Define “fit.” Don’t hide the bar. Spell out expectations around production, culture, patient communication, and team leadership. If someone isn’t meeting the mark, say so early and offer coaching—not hints and hope.

Specify what happens if someone leaves. Gifted equity stays with full-time status. Purchased equity sells back at the lower of purchase price or current valuation. Put that in the contract. Talk through examples. No surprises later.

Be transparent about control. Who decides on equipment? Marketing spend? Schedule templates? Compensation bands? You can invite feedback while still maintaining operational authority. Say that out loud.

Hiring Is Only Half the Game: Onboarding & Development

A strong hiring process gets you potential. A strong onboarding and training track turns potential into production. Some groups run two-day intensives with manuals and online modules. Others create a structured mentorship cadence, especially around case acceptance and working with treatment coordinators. The exact recipe can vary, but two principles hold:

Standardize the first 30–90 days. Systems, clinical protocols, communication playbooks, referral rules—codify them.

Coach the revenue moments. Doctors shouldn’t talk fees, but they must create clinical clarity and urgency. If the doctor can’t credibly explain “why now,” even the best coordinator will struggle.

Equity doesn’t replace training. It amplifies it.

What About Executive Equity?

As your organization grows into a true DSO with a management company and multiple clinics rolling up, the value isn’t only in chairs—it’s in leadership capacity. Great COOs, CFOs, and senior operations leaders are wildly poachable. A small equity slice can keep them tethered to your North Star.

Two practical points:

Check your structure and state rules. In many states, non-dentists can’t own part of a dental practice entity. A DSO/management company setup can create compliant paths to offer equity (or equity-like upside) at the parent level.

Start tiny, explain the upside. Even a sliver at the parent can be meaningful when the organization scales from eight to fifteen to thirty million and beyond. For execs, this opportunity is rare elsewhere; for you, it can be the difference between steady growth and a revolving door.

If you’re a single-site or two-site practice without a DSO structure, you can still explore phantom equity or performance-based long-term incentives that mirror value growth without transferring actual ownership. The principle remains the same: reward the people who build the system.

Common Pitfalls (and How to Avoid Them)

The “we’ll talk later” trap. It sounds harmless; it breeds resentment. Set dates. Keep them.

Over-promising the pie. Equity is finite. Map it out before you recruit. Know your ceilings per office and in aggregate.

Ignoring culture fit because the production looks shiny. Bad trade. Short-term wins, long-term pain.

Letting costs balloon because “it’s just supplies.” Equity-minded doctors will help curb this, but you need dashboards, too. Give partners visibility into P&L basics so their decisions feel informed, not scolded.

Going 50/50 without rules. If you truly want 50/50, draft decision trees, tiebreak mechanisms, and dispute processes before signing.

Putting It All Together: A Simple Playbook

Recruit intentionally. Broad clinical chops, strong communication, team-first attitude.

Onboard like it’s mission-critical. Codified systems; early coaching around case presentation and TC handoffs.

Offer a clear equity path.
- Year 1 (startups): Up to 5% gifted upon mutual fit.
- Post-year 1 (all associates): Optional purchase up to 25% total ownership in their office, priced at 6–7x EBITDA.

Document expectations and exit rules. Gifted equity tied to full-time status; purchased equity sells back at lower of cost or current valuation if they leave.

Communicate control vs. input. You’ll listen; you’ll also protect operational consistency across the group.

For scale: Consider small parent-level equity for key executives within a compliant DSO structure—or phantom instruments if entity rules block ownership.

This model is generous enough to attract top talent, disciplined enough to preserve operating control, and simple enough to explain without a law degree.

Key Takeaways from the Conversation

Equity is a retention tool, not a charity. It channels owner behavior—cost awareness, leadership, and long-term thinking—into your associate ranks.

A working model:
- 5% gifted equity after 12 months for startup associates (mutual-fit requirement; equity tied to full-time status).
- Optional purchased equity after year one for any associate, up to 25% total of their office, priced at 6–7x EBITDA (vs. group value often at 8–9x), creating day-one upside.
- If they leave: purchased equity sells back at the lower of purchase price or current valuation.

Clarity prevents resentment. Put timelines, “fit” criteria, control boundaries, and exit mechanics in writing. Keep the equity conversation on schedule.

Hiring + onboarding beats wishful thinking. Broad clinical skill sets and patient communication skills are non-negotiable; structured onboarding turns talent into results.

Avoid the 50/50 reflex. A 25% cap per associate usually strikes the right balance of motivation and operational control. If you do 50/50, pre-wire decision rules.

For growing groups: Consider small parent-level equity (or equity-like incentives) for key executives within a compliant DSO structure; it’s often the only way to keep elite operators.

Use trusted advisors. Dental-savvy attorneys and CPAs can build agreements and valuations that fit your exact structure and goals.

Equity, done cleanly, is less about slicing a pie and more about baking a bigger one—together. When your best people feel real ownership, they won’t just stay; they’ll help you build something worth owning.

Listen to the Original Podcast HERE.

View the Episode on YouTube HERE.