5 DSO Deal Structures for Dental Practice Owners
The five DSO deal structures are 100% affiliation, joint venture, equity roll, sub-DSO and direct investment with private equity. Each one determines how much you receive at closing, how much equity you keep and what happens to your clinical control after the transaction closes.
Deals with DSOs have become more sophisticated over time. Dentists are no longer limited to selling 100% and stepping away. The structure you negotiate shapes your financial outcome and your role in the practice for years after closing.
| Structure | % Sold | Cash at Closing | Equity Retained | Best For |
|---|---|---|---|---|
| 100% Affiliation | 100% | Full market value at closing | None | Dentists ready to exit ownership entirely. Clearest outcome of the five. |
| Joint Venture | 60–90% | Partial payment at closing | 10–40% equity retained | Dentists 20–30 years from retirement building long-term compounding wealth. |
| Equity Roll | 100% | Partial cash + DSO equity shares | Enterprise-level equity in DSO | Dentists betting on DSO portfolio appreciation over a single-practice cash exit. |
| Sub-DSO | 100% | Large upfront + ongoing profit share + exit payout | Portfolio equity in sub-DSO | Dentists who see acquisition and growth as the next chapter after selling. |
| Direct PE Investment | Majority or minority | Varies — full or structured payout | Minority stake option available | High-revenue practices with established footprint attractive to institutional capital. |
100% Affiliation
The original DSO model. You sell 100% of the practice, receive full market value at closing and either transition into a clinical-only role or retire.
This structure works for dentists who are ready to exit ownership entirely. It offers the clearest outcome of the five: a defined payment, no ongoing ownership obligations and no equity exposure after closing day. The tradeoff is direct. Once the transaction is complete, all future growth of the practice belongs to the DSO.
Joint Venture
Most dentists assume a DSO deal only makes sense close to retirement. The joint venture works 20 to 30 years out and gives you significant upfront cash while keeping a stake in the practice’s future.
You sell 60% to 90% of the practice and retain 10% to 40% equity. Both you and the DSO invest capital and share in the practice’s growth proportionally. Clinical control stays with you day-to-day.
The equity split is not a fixed number. It depends on your goals, your timeline and how much risk you are willing to carry. A larger retained stake gives you more exposure to future growth but also more financial risk. PTS negotiates this based on what you need from the transaction, not a template the DSO prefers to offer.
The earlier you enter, the more time your equity has to compound. For a dentist in their 30s or 40s, the retained stake can ultimately be worth more than the upfront payment.
Equity Roll
You sell 100% of the practice but you do not take all cash. A portion of the proceeds converts into ownership shares in the DSO as a whole. You go from owning one practice to holding a stake in an entire portfolio.
Your individual practice is worth one number. A DSO managing dozens of practices commands a much larger multiple. Your equity participates in that when the DSO is recapitalized or sold.
The bet is enterprise-level appreciation over a single-practice cash exit. It requires conviction in the DSO’s platform and confidence in their timeline.
Not sure which structure gives you the best outcome? PTS works through the numbers with you before you enter negotiations.
Sub-DSO
The sub-DSO turns your exit into a starting point. You leave the transaction debt-free with a large upfront payment and retain 40% ownership in a sub-DSO portfolio. The equity is held at the portfolio level, not at the individual practice or the parent DSO, which gives you room to grow by adding practices over time.
Returns come from three sources:
- Equity appreciation as the sub-DSO portfolio expands.
- Ongoing profit sharing from practices within the portfolio.
- A final exit payout when the parent DSO recapitalizes.
This is the most complex structure of the five. It suits dentists who see acquisition and growth as part of what comes next, not just an exit.
Direct Investment With Private Equity
If your practice has the revenue and footprint to attract institutional capital, you can go directly to a PE firm without involving a DSO. Institutional buyers compete against each other for the right assets and this structure typically produces the highest valuations of the five options.
Full Buyout
Controlling interest transfers to the investor at closing. You exit ownership and may continue in a clinical role or leave the practice entirely. This path offers the largest single payout.
Minority Growth Investment
The PE firm provides capital and you retain majority control. You keep running the practice while the investor funds expansion. This works for dentists who want institutional backing without giving up operational authority.
The negotiation here is more complex than any other structure on this list. A broker who has closed PE transactions, not just DSO affiliations, directly affects what you walk away with.
Not Sure Which Structure Fits Your Practice?
Every structure looks different depending on your practice’s size, financials and goals. PTS has helped hundreds of dental practice owners evaluate these options and negotiate the right deal.