By Diwakar Sinha, CEO, Polaris Healthcare Partners
The Evolution Last time, we explored the crossroads associate doctors face: ownership or employment, risk or stability, autonomy or alignment. But once the decision to pursue ownership is made, what comes next?
Ownership isn’t just a title. It’s a structure. And how that structure is built determines whether a practice can scale, attract talent, and eventually exit cleanly and profitably.
Why Equity Structure Matters Whether you’re a founder or an associate, equity isn’t just about percentages, it’s about incentives, governance, and long-term value. A well-designed equity model:
- Aligns effort with reward
- Creates clarity around decision-making
- Enables growth without chaos
- Prepares the business for recapitalization or sale
- Signals continuity of care and leadership to future buyers
Models That Work at Polaris, we’ve seen several models succeed depending on the stage and goals of the practice:
- Earn-In Equity: Doctors or executives earn equity over time through performance and contribution. This can be structured via RSUs (Restricted Stock Units) or Profits Interest Units.
- Buy-In Equity: Associates purchase equity directly—often through a “called interest” model.
RSUs vs. Profits Interests—What’s the Difference?
- RSUs are typically used at the Holdco level, ideal for building a DSO structure with centralized operations.
- Profits Interests are more common at the practice level, offering upside without immediate tax burden.
Choosing the right model depends on:
- Stage of growth
- Tax strategy
- Exit timeline
- Desired level of control
Timing Is Everything The best time to structure equity is before you scale. Waiting until you’re mid-expansion or prepping for exit can lead to misalignment, legal complexity, and missed opportunities. Early clarity creates alignment, retention, and a clean story for investors.
The Link to Maximum Exit Value Buyers don’t just look at EBITDA—they look at leadership depth, cultural continuity, and retention risk. When partners are embedded in the business with aligned incentives, it signals:
- Strong clinical leadership post-transaction
- Lower turnover risk
- Preserved patient relationships
- Scalable infrastructure
These factors drive valuation multiples higher and make organizational growth smoother. Equity structure isn’t just internal strategy—it’s external signaling.
Partnership Is the Bridge Equity isn’t just a financial tool—it’s a relational one. When associates become partners, they don’t just stay—they lead. They mentor. They protect the brand. And that’s what buyers pay a premium for.
How Polaris Helps at Polaris, we don’t just help practices grow—we help them grow together. Our team works closely with founders and clinical leaders to design partnership strategies that:
- Align incentives across the organization
- Support scalable infrastructure and culture
- Create equity models that attract and retain top talent
- Maximize enterprise value at exit
Whether you’re expanding regionally or preparing for a strategic transaction, Polaris helps you build the foundation for long-term success.
At Polaris Healthcare Partners, our mission is to turn complexity into opportunity and ambition into legacy. Contact us to explore more.
