In this compelling episode, Dr. Eric Block sits down with Bob Spiel, dental consultant, leadership expert, and host of the “Just Say No to the DSO” podcast to unravel the truth behind Dental Service Organizations (DSOs), private equity buyouts, and the illusion of “easy exits” in dentistry. Bob shares his deep experience in leadership development and associate dentist matchmaking, shedding light on how private practitioners can reclaim control, build effective teams, and avoid costly mistakes that jeopardize long-term profitability and fulfillment. If you’re contemplating selling your practice or feeling weighed down by management stress, this is your wake-up call.

Key Takeaways

  • DSO Deals Can Be Tricky: Some DSOs make big promises and show high numbers, but many dentists end up in a worse spot after signing.
  • Leadership Starts With Knowing Yourself: Strong practices begin with dentists who are open to learning, leading, and building a great team.
  • Hiring an Associate Is Like Finding a Good Match: Picking the right associate takes time and planning, it shouldn’t be a quick decision.
  • Selling to a DSO Doesn’t Always Make Life Easier: Selling your practice doesn’t mean your stress goes away. It can sometimes make things harder.
  • Equity Promises Don’t Always Happen: DSOs often talk about “equity” to get your interest, but it may not turn out the way you think.
  • There Are Other Ways to Grow: Practice coaches and HR experts can help your practice grow without giving up control, and usually cost less.

Episode Timestamps

  • 00:00:12 – Introduction & Resources

    Dr. Eric Block: Welcome to the Stress-Free Dentist Podcast. I’m your host, Dr. Eric Block. As always, I want to inspire, entertain, and educate you on the best tools and technologies out there. My goal is to help make your practice and career more profitable, efficient, and most importantly, more enjoyable. And check out all of my nonfiction and children’s books on Amazon and check out thestressfreedentist.com  for any upcoming events. And if you’re feeling you’re a dental professional that’s burnt out, or you just feel stuck or want to get to that next level, visit the International Academy of Dental Life Coaches or www.iadlc.com,  and we’ll get you matched up with a life coach that understands dentistry.

    I also wanted to thank our amazing sponsor, Ekwa Marketing. They have helped me and my practice over the years to improve with SEO and website performance. And to find out how you can make your practice dominate in your area, go to www.ekwa.com/msmsfd  to book your complimentary meeting. Again, that’s www.ekwa.com/msmsfd

    Alright, everyone, welcome back to another episode, and today I’m joined by Bob Spiel, who is the founder of Spiel Consulting and Dentist Partner Pros, as well as the host of the Just Say No to the DSO Podcast. Bob, thanks so much for joining us.

    Bob Spiel: Thank you, Eric. Great being with you.

    Dr. Eric Block: Yeah, I’ve been listening to your podcast and it’s really been, um, informative. It’s a, you know, a big wake-up call. Um, great information. Um, no BS, and, um, anyone out there, I recommend checking it out. It’s, um, um, a great listen. Um, Bob, how did you first, uh, get involved with, with helping dentists?

  • 00:02:07 – How Bob Got into Dentistry
    • Bob shares how a mentorship led him from medical consulting to loving the dental field.
    • First exposure to a dental practice in 2008 sparked a 17-year journey in the industry.

    Bob Spiel: Well, long story short, Eric, I was consulting in medicine after I was a hospital surgical center CEO. And that job ended kind of unceremoniously about 17, 18 years ago. Uh, got into consulting as I was looking for another CEO job, and the consulting gigs just started coming more and more. And, uh, about a year into that, I had a friend who told me he had a friend who was a dental consultant looking to be able to sell his practice. Uh, turns out I didn’t buy it, but he mentored me for a couple of years. And honestly, Eric, the first time I jumped into a dental practice with him in, uh, 2008, uh, he showed me what dentistry’s really all about. I fell in love with it. And that was almost 17 years ago. And it’s been just an incredible ride. I love this industry, and I love what it does and how it changes lives, and especially the, uh, just the dynamics of teamwork and leadership and really great patient service that makes a difference in a dental practice.

    Dr. Eric Block: And how exactly do you help dentists? Are you a consultant, a CPA, uh, you’re an MBA—how do you help dentists?

  • 00:03:15 – What Bob Does for Dentists
    • Helps practices reduce stress and improve efficiency through leadership and systems.
    • Specializes in high-quality associate dentist placement with an 85%+ success rate.

    Bob Spiel: Great question. I’m an MBA, and so in particular, there are two things that I’ve done in my career. The first is to really help practices learn how to do more with less stress and less time. Okay? And that’s really kind of been the whole thrust of my consulting practice—to work with practices, help them find what barriers are getting in the way, but help teams develop the solutions themselves with some guidance, instead of just showing up with the book and saying, "Here, this is how you do it. Follow my game plan and you’ll be successful."

    So that’s one of the thrusts, with a real special emphasis on leadership and team building in particular, because I’ve learned over the years that practices can’t run faster than their leader. So if a dentist really wants to be able to take their practice up to the next level, it starts with themselves.

    It doesn’t finish with themselves, but it starts with themselves. And then the other piece that I’ve really tried to accentuate is helping hire really high-quality partner associate dentists, because I found that’s a huge problem inside the industry—being able to find dentists who match, who fit, who stay, and they make money for the practice. And we’ve arrived at a solution that has a really great track record. Over 85% of the time we find the right person, they stay for over a year, and they become a real important part of the practice. And so both of those things are ways that I’ve really tried to contribute to the industry and help dentists and their practices get better.

    Dr. Eric Block: Can you go back to the leadership comment? ‘Cause I—yeah, you bet—I struggle with that every day. I was not a natural born leader. But, you know, as dentists, even if you’re an associate dentist, more importantly, if you’re an owner dentist, you have to be a leader.

    Bob Spiel: You do.

    Dr. Eric Block: You know, I wish I’d really gone back and didn’t take that, you know, 18th course on extractions and bone grafting, but did more courses on leadership.

    Bob Spiel: Mm-hmm.

    Dr. Eric Block: Public speaking. What are your thoughts there on helping a dentist become a leader?

  • 00:05:21 – The Foundation of Leadership
    • Leadership starts with self-awareness and humility, not innate traits.
    • Encourages dentists to think like teachers: set expectations, create culture, show appreciation.
    • Recommends the book Flip Your Focus for practical, small business leadership insights.

    Bob Spiel: The first thought, Eric, is that anybody can learn how to become a better leader if they just have a couple of things. And the number one thing that I say is they need to be self-aware. And the other thing is they need to be humble. But with those two qualities combined, it’s learning what it means to actually lead a group, not fear conflict, but how to help steer and create vision, direction, and pace. Because yeah, you’re exactly right—whether you’re an associate or the owner, we’re hierarchical beings. As people, we look to the top. And given that, it’s vital to be able to realize, you know what? Whether I know it or not, I’m leading my practice. The question is, am I leading my practice well?

    And if there’s room for improvement, then one of the first places that I recommend a dentist to go to is to get a copy of a book that I wrote about eight years ago on small business leadership called Flip Your Focus.

    I had some fantastic mentors early in my career that really taught a lot about leadership, and they were great leaders in and of themselves. They really taught kind of a mindset, as well as three different skill sets that are really important to be able to pick up. And if you can do these things well, you’re going to be successful—even if you’re not a Bill Gates or a Tim Cook. But if you can just learn to think of yourself as a teacher, and then realize that your job is to set expectations clearly, create a culture of participation where your team actually gets to problem solve and own their solutions, and then lastly, show a lot of appreciation—you’ll win. You really will.

    Dr. Eric Block: Yeah. You mentioned the word “humble.” You know, for all the dentists out there listening, it’s okay to not know something and say you don’t, and that you’ll, you know, find out. I really think staff appreciates that. And you, you nailed it—get the team involved. Make sure they’re, you know, they know that they’re appreciated. But, you know, you can do it. I really struggled with it, but I’m getting better at it.

    Bob Spiel: Great. Great advice.

    Bob Spiel: Anybody can do it. And one of the coolest things is—and I’m sure you’ve seen this in your practice as you’ve done it—your practice has started to change, probably gotten busier, but also the loads on you have gotten less. And that’s what leadership can do in a dental practice.

    Dr. Eric Block: And the culture’s better, and I enjoy going to work more.

    Bob Spiel: Exactly. That’s right. Yep. Cool.

    Dr. Eric Block: Can you talk to me about the associate dentists—the matching process—and what goes along with, you know, really finding that great match between the associate and the owner?

  • 00:08:23 – The Truth About Associate Hiring
    • Hiring an associate is like a marriage—chemistry and cultural fit are vital.
    • Uses avatar profiling, surveys, and team interviews to ensure alignment and reduce failure.

    Bob Spiel: Yeah, you bet. Love to. Let me give you a little bit of context on this, ’cause I’ve hired probably a thousand people during my career. Before I got into healthcare, I was an operations manager back in the nineties and ran some fairly large divisions and entities. And as I got into dental consulting, I was mentored by some really great individuals that had been doing it for a long time. One of them, by the name of Linda Miles, and I became great friends. And on just kind of a flippant phone call, she mentioned that 75% of the time, associateships fail in dentistry.

    And Eric, I’d been working in medicine before this. I’d hired doctors—no such failure rate among medical doctors. And I thought, what the heck? Why? How can that be? And I said, "Linda, why?" And she said, "You know, nobody really knows. It’s just how it is."

    Well, trying to peel this onion apart further and figure out what the deal is—a dental relationship between two dentists is the closest thing to a marriage besides a marriage. Because you share the same space, you use the same equipment, you use the same team, and you have the same patients. So you’re in each other’s sandbox all day long. Not even medical doctors have that type of close quarters.

    And so think of it kind of like two executive chefs being in the same kitchen, and if they don’t really match and get along well, it’s gonna explode. That’s what happens in dental practices. Too often, dentists will look for somebody who has a license and a pulse, go to dinner, and it’ll be a really quick decision to bring them on, thinking—hoping—that it’s gonna work for them.

    Instead, what we do is we approach this as one of the most important relationships that you’re gonna have in your life. So we understand clearly who’s gonna fit in this practice by interviewing the doctors and the team, as well as doing personality surveys. So we’ve got a really clear picture of that culture. Then we go through and create what we call an avatar of the ideal candidate. And with that, that’s what we use for every person that we talk to about the opportunity. And we’re always holding them up, asking the right questions, doing the right surveys to see—do they match this characteristic or not?

    If they do, great, we keep ’em moving. If they don’t, then we say, "Thank you, but this isn’t the right place for either one of you." And we just keep going through this process. It’s like a sieve until you reach a point where you say, "You know what? This person we can actually quantify as like a 90% match across all the criteria you’ve given us. Let’s have a conversation now. Test the chemistry."

    And so that’s what we do. And it’s really exciting to see it happen, because when it’s right, it’s fantastic. My business partner, Brighton Neil, who’s now CEO of Dentist Partner Pros, has made this observation: an associate in a practice is kind of like an amplifier. They either amplify the bad or they amplify the good—but there’s nothing in between. So when they’re bad, it just makes everything feel even worse. But when they’re good, it amplifies the good. And it’s exciting to see what happens when you’ve got a group of dentists that really enjoy working with each other, they harmonize well, and they’re all pointed in the same direction.

    Dr. Eric Block: Yeah, like you mentioned, it’s like a business marriage. Partnerships are tough. I have a partnership, and we have different philosophies and we’re different ages. And, you know, ultimately it’s all about communication. You know, just like a—

    Dr. Eric Block: Mm-hmm. But you’re right—I probably see him, you know, sometimes more than I see my family. So it’s a delicate thing.

    Now, tell me about the podcast. Why did you start the podcast?

  • 00:12:12 – Launching the “Just Say No to the DSO” Podcast
    • Bob and co-host Nate Williams started the podcast to educate dentists on DSO risks.
    • The podcast arose from parallels Bob saw between medicine’s consolidation and dentistry.

    Bob Spiel: I started the podcast because I’ve seen a consolidation happen before in dentistry, and that was in medicine. So when I was a hospital surgical center CEO, this consolidation effort had been going on for a while, but it was getting even more profound. And then after the passage of the Affordable Care Act and kind of the whole recalibration that happened within the medical community, even more consolidation—and more doctors becoming hospitalists and joining groups and other things—and frankly, seeing that through their lens, it wasn’t positive.

    And if you see the net outcome now in 2025, almost 20 years later, in terms of patient care within medicine, it hasn’t gotten better. It’s only gotten worse. The lines have gotten longer. But the biggest thing is the medical doctors do not like where they are.

    So, as I started to see this advent, you know, back eight, nine years ago of DSOs—and they were still kind of small—COVID money really put fuel to the fire. And suddenly people were being contacted all over the place saying, "Sell, sell, sell." And I realized that dentists were not getting the full picture. Because, in particular, the private equity entities that are doing these types of roll-ups really have one goal and one goal only—and that’s to make money.

    And given that fact, then they will really try to massage any deal that they possibly can to be able to make it appear like you’ve won the lottery. But in reality, they just took your practice for next to nothing. And knowing that dentists are fact finders—and if you give them the right facts and present it to them in a way that they can begin to digest it—Nate Williams, who’s my co-host, and I, we just decided, you know what, we’ve got to do something about this, because dentists aren’t getting the complete picture.

    And you know, Nate is a CPA, I’m an MBA. He’s a fantastic analyst—much better than I am—but he’s reviewed over a hundred DSO deals, looking at the actual term sheets and the letters of intent. He’s never found one, Eric, that’s pro-doctor. Everything is tilted toward the DSO.

    And the reality is that most of them now are put together in a way that if a dentist could just keep working for another five and a half years, they could literally burn down their practice and be equally as better off as if they had sold. And we decided we’ve got to do something. And it seemed like the podcast was the best way to try to get information out quickly and hopefully get it viral so that dentists are telling dentists, so that this information is starting to spread throughout the industry.

    And it seems like it’s working. Our payback, frankly, is when we get emails and texts from doctors who are saying, "I tore up the deal," or, "I’ve just said no," or, "I was thinking of going this direction, and now I get it and I want to go a different direction." And that’s our reward.

    Dr. Eric Block: And the podcast is called Just Say No to the DSO?

    Bob Spiel: Just Say No to the DSO, exactly.

    Dr. Eric Block: And now since you’ve started the podcast, what have you learned that you didn’t expect in doing this podcast and interviewing all these different doctors and/or DSOs?

  • 00:15:35 – What Bob Learned from the Podcast
    • Realized DSO deals are more predatory and misleading than he initially thought.
    • Brokers often earn inflated commissions, while dentists unknowingly get shortchanged.

    Bob Spiel: Mm-hmm. Yeah. The first thing, honestly, that we learned was—it’s a lot worse than we thought. And getting even more worse as time goes by. Because money is no longer free, the DSOs are now kind of playing what I call the circus clown game with a little balloon. You know, they don’t have as much cash that they can offer, so they’re squeezing the other end, and they’re making these equity promises huge—and they’re not real.

    Another thing that we found is that the brokers—the majority of them are now DSO salesmen—because they have 80% less work and they get two to three times the commission. Because they’re getting commissioned on the total deal and not just the cash portion. So if the number is inflated dramatically, then, you know, as a broker, you just made a killing off that deal.

    When you realize that in the end, you walk away from it—it’s the dentist’s responsibility. After that, you look like you just, as a broker yourself, won the lottery and realize the dentist is really going to have to suffer down the road big time. But you’re not going to be there to even pick up the pieces. You’re on the next deal.

    The third thing that I’ve found is that because of these inflated values, we’ve had a general inflation in all valuations. So it used to be, you know, a normal number for a private practice sale was going to be between 70 to 75% of three-year average collections. That number is now getting jumped up to 90 to 100 to 110% of average collections. And I personally think that’s unsustainable, because the buyers just can’t get out from underneath that note. But that’s been an impact of the DSOs directly on the entire industry.

    And then I think the last thing, Eric, I’d say is—they’re not as big as they seem. There’s kind of this puffer fish experience that you have with DSOs, because they’ve bought off many of the dental schools, they’ve bought off most of the trade magazines, and they end up at the shows looking like there’s this huge entity, you know, that’s got endless cash and "we’re here to take care of you."

    But they’re still only 20% of total dental GDP. They haven’t hit the tipping point. And it’s honestly getting harder for them to actually get dentists to say yes these days, because I think more and more are getting educated about how bad these deals really are.

    Dr. Eric Block: Can you explain—typically a DSO will offer a value such as 10x or 15x, or a EBITDA, and then a percent of equity. Can you explain all that to the audience—how that works?

  • 00:18:32 – The Smoke and Mirrors of EBITDA
    • EBITDA figures are used to create false excitement and cloud judgment.
    • Many dentists end up paying back what they “sold” their practices for—and more.

    Bob Spiel: Honestly, the EBITDA number is just meant to create a hook so a doctor will look at that number and then believe, “Man, I just hit the lottery. I have generational wealth now. I can’t believe somebody is going to pay this much for my practice.” EBITDA is, frankly, just smoke and mirrors. They can make the number whatever they want to make.

    The big question is: What are they paying in cash? And what am I giving up in cash for the five-year workback requirement that I have to be able to keep this deal together? And then what sort of requirements are they placing on me for days to work, hours to work, as well as growth requirements?

    To use a very simple analogy, the EBITDA and valuation number are designed to be like being at a party. Let’s say you’re a married man or a married woman, but the prettiest girl or most handsome man you’ve ever seen in your life shows up and starts to pay attention to you. You can’t believe this is happening. Your mind starts to go fuzzy, and you can’t really pay attention to anything else besides this conversation you’re having. That’s what the EBITDA does. That’s what the valuation does. They want you to think, “Game over. This is it. I don’t care what anybody else says—I’m gonna do this, ’cause dang it, I need generational wealth. I know how hard I’ve worked, and it’s time for me to get mine.”

    What Nate has found, though, as he’s stripped these deals apart, is that there are so many underlying requirements and assumptions—of doubling and tripling growth, of how much you’re actually giving back, what they’re going to pay you as a percentage compared to what you were paying yourself. If you look at the cash side of this—and forget that the equity is actually even going to happen, because rarely, if ever, does it—it’s just meant to create this cloudy mind that thinks, “Okay, I’m in.”

    If you look at the cash side of it today, the worst deal we’ve seen: a doctor was being offered $36 million for a practice. But once we stripped it all apart, Eric, he was actually going to pay the DSO $2.5 million to buy his own practice. So don’t take the hook. Don’t take the number. Don’t believe this is true—because it’s not. And that’s why we say, “Just say no to the DSO.”

    Dr. Eric Block: Now, is it pretty typical for there to be a five-year workback?

    Bob Spiel: Very typical.

    Dr. Eric Block: Are you seeing some less—

    Bob Spiel: To be? No, that’s typical. And to answer your question—what else is surprising—many of the DSOs are not interested in the older generational doctor who’s 60, 61, has five years left to go. They’re now looking for doctors that are more in their 40s and 50s, who they know are going to stay and who can stay longer than five years to begin with.

    Because in addition, they’ve got non-competes, and non-solicit, non-disparagement agreements, etc. So if they can get you hooked, they want to keep you longer than five years. And if they can successfully do that, then in essence, they’ve bought your practice for nothing—or you’ve paid them to buy your practice.

    Dr. Eric Block: So essentially, if you just kept that practice for those five years and kept being the owner, you would make more money than this payback or workback period with the DSO?

    Bob Spiel: Yes. Yes. You would—under normal growth assumptions, yes, absolutely.

    Dr. Eric Block: Now, can you explain also about the—I know dentists are under, you know, tremendous amount of stress with the staff and—

    Bob Spiel: Issues. Mm-hmm. Yeah, they are.

    Dr. Eric Block: —going on. Doesn’t seem to be, you know, the issue doesn’t seem to be getting any better. And it’s not just dentists—it’s many industries, but—

    Bob Spiel: Yeah, great point.

    Dr. Eric Block: I know I’ve heard dentists say they’re just going to sell to the DSO because they don’t want to deal with the management portion or the business side of the practice. They just want to practice dentistry. And if they have a DSO help them with the management side of things, then a lot of their stress will go away.

  • 00:23:21 – Why DSOs Don’t Relieve Stress
    • DSOs don’t remove leadership responsibilities; dentists still run day-to-day operations.
    • More effective (and cheaper) solutions exist via practice management consultants and HR firms.

    Bob Spiel: Well, to circle back to the earlier conversation about leadership, the fact that we’re hierarchical beings means that whoever is the most senior person in that practice in the moment—they’re the leader.

    Bob Spiel: Alright. So this whole idea that the DSO is gonna make my life easier, now I’m just gonna come in and practice dentistry—that’s a house of cards. It’s not true. That’s not how we work. You’re the onsite manager. You’re the person that gets to make the day-to-day decisions. You’re still going to be as knee-deep in it as ever.

    Frankly, if you feel like you need help with management, there are lots of very talented practice management consultants that can help you learn how to actually lead and manage your team—for a lot less than giving your practice away for nothing.

    If HR is something that you feel kind of blindsided on, there are some great companies in dentistry that help you on the HR side—with administering things, with making sure if you have to let somebody go, you’ve got all your Ts crossed and I dotted, etc.

    There are so many answers to the stressors that dentists feel that they can find, that are so much less expensive than selling to a DSO. And who’s to say that the DSO actually does it any better than the dentist themselves? And maybe they do, but Eric, there’s also this scenario of the next PE group that may buy this rolled-up DSO—what do they know about dentistry and what are they going to do?

    So take responsibility for your practice. Don’t sell the work of your hands. Find the resources you need. Create that board of directors that can help you run and lead your practice effectively. And then harvest the results of that.

    Dr. Eric Block: Yeah, you’re so right that, you know, if you do sell or give up a large portion of control of your practice, you’re still the leader, you’re still the dentist, and ultimately it’s gonna fall on your shoulders. So, why not be 100% owner and not give away a big, big portion of your practice?

    What can a private practice doctor do now? What would your advice be there?

  • 00:25:31 – Practical Advice for Private Practices
    • Diagnose broken systems by identifying team bottlenecks and inefficiencies.
    • Focus on leading better and building relationships—dentistry is still a people-first game.

    Bob Spiel: To be able to just say no—but say yes to the future of their practice? Yeah. Okay. It really depends where they are in their growth cycle, but I would have to say that every practice—every private practice—could benefit from the doctor learning how to lead better, how to hire better, and to look at your systems.

    And a quick way of looking at systems is to ask yourself—and I don’t mean your practice management system like Eaglesoft or Dentrix—look at how the patient flows through your practice and where the next team member in line ends up with surprises or guesses. Diagnose where you’re missing things, where things aren’t complete, and try to come up with actual action plans that will allow them to do a better job.

    And don’t be afraid of a DSO opening up next door to you. If you can play the game well and excel—not only… well, if you lead well, you’re going to play the game much better. If you have your systems much tighter, your patients are going to have a much better experience. And just be personable, because dentistry first and foremost is a relationship game.

    The most valuable, successful practices that I’ve encountered as a practice coach are those that really play the relationship game well. And when patients come in, they feel valued, they feel informed, and they’re taken care of extremely well. And they tell their friends—and they never leave unless they have to move.

    Dr. Eric Block: Actually, you just mentioned the words “tell your friends.” So I did go through an exercise a couple years ago—few years ago—where I had my practice evaluated by a couple different DSOs. I think that was mistake number one—having them evaluate it.

    Number two—and I can repeat these—they did mention the, you know, the equity events, which I still don’t really even understand what that means.

    And then number three, there were bonuses for referring other practices—like the “tell your friends” type of thing.

  • 00:28:01 – The "Tell Your Friends" Trap
    • DSOs offer referral bonuses to dentists for recruiting peers into the fold.
    • Peer-to-peer influence lowers resistance and increases dentist vulnerability to bad deals.

    Bob Spiel: Exactly, yes. Why? Because they’re a Ponzi scheme, Eric. I hate to be blunt, okay, but they are. “Tell your friends” because they want to, A) reward you for bringing another practice in, and B) another interesting thing that you asked—what have I learned that I didn’t know upfront? Dentists are naturally suspicious, I think, by personality style and by the number of times that people tell you something, but something else happens.

    But there’s an interesting thing that occurs when a dentist tells a dentist—those suspicions start to drop. And so, if a dentist can bring another dentist into this conversation, their fear and their suspicion lessen, and then they’re willing to be much more open to whatever the salesperson is going to say. And they feel like the dentist who made the introduction has their best interest at heart—not realizing, frankly, that they’re probably going to make about a hundred grand just by signing and making the introduction happen to begin with.

    Dr. Eric Block: And then the whole equity event and the stock sales—I really didn’t understand it then, I still don’t understand it. Because that was a big thing that they dangled, and I went through the process. At the time, I just didn’t feel like it was the right thing for me. I’m glad I didn’t, because I still got another—you know, my kids are 10 and 12, so I’ve got another—

    Bob Spiel: You know, you got 15 or 20 years ahead of you.

    Dr. Eric Block: Yeah. Can you explain the equity event and how that works with the shares?

  • 00:29:52 – The Myth of Equity Events
    • Equity “value” is often exaggerated and never guaranteed—it’s not real money until sold.
    • Doctors face performance clauses and risk equity dilution or forfeiture if targets aren’t met.

    Bob Spiel: Sure. Well, first, just to understand—the equity is nothing until something goes on the public market. Okay? And I’m gonna say that again: until something goes on the public market, equity is whatever you say it can be.

    So for instance, a DSO could claim that this equity is gonna be worth—like in this one deal where they offered him $36 million—they’re only giving him $2.5 million in cash upfront. Another $5 million was based upon certain benchmarks that he was going to hit from year one to year five. But the big payoff is this equity number.

    Where they say the equity’s going to come from is through roll-ups. Alright? So think of it like the Pac-Man strategy, where you’ve got a small fish eaten by a bigger fish, eaten by a bigger fish—and every time that fish gets eaten, then suddenly your valuation goes up. That’s the whole premise behind this huge equity number, saying, “Yeah, someday you’ll be part of this much, much bigger deal because you’re going to be part of a much bigger fish.”

    What they don’t tell you is that equity is actually in jeopardy. If you don’t meet your requirements of growth, or if you do something that they view as being inappropriate or egregious within the practice, they can fire you. They can pull the equity. They can dilute it. They can dilute it automatically if, for some reason, the DSO itself is suffering financially.

    So, like Smile Brands in Oregon—they announced to doctors about a year and a half ago that, “You know what? We now have all these new equity partners called banks, because we’re not making our payments.” So it appears to be one thing—but it’s not.

    It’s just designed to make you go, “Oh my goodness, I can’t believe somebody’s going to pay me that amount for my practice.” But if you really want to see what you’re getting paid, look at the cash they’re offering you. Look at how much less you’re going to be paid for the next five years. And then realize, “Oh, I’m really paying back all the cash they gave me upfront—and sometimes even less than that.” And then I don’t own my practice after year five. If I want to continue to work in this town, I probably can’t, because I’ve got a non-compete. And the equity doesn’t materialize.

    It can materialize, frankly, for some of the early entrants. Again—Ponzi scheme idea. Get in early, get in now, get the big win, because there may be another group that buys your group. But in terms of the big number—it doesn’t happen.

    Dr. Eric Block: And Bob, two final questions. How do we find out more about what you’re up to regarding your consulting group, the podcast? And then number two—just some final comments or words of advice for the young dentists out there.

  • 00:33:08 – Final Thoughts and Advice for Young Dentists
    • Contact Bob via bob@spielconsulting.com  or text 208-520-6900.
    • His advice: keep asking better questions and investing in leadership and clinical growth.

    Bob Spiel: Sure. Well, how do you find out about the podcast? Just listen to Just Say No to the DSO. We’re in season three right now. We’re interviewing a lot of movers and shakers inside the industry—or those that have seen it through another industry. Like I interviewed Dr. Robert McNamara, who saw this whole thing happen as an ER doc over the past 35 years. So that’s where you can learn about that.

    If you want to contact me and find out about the associate hiring side of things or dental consulting, it’s real easy. You can email me at bob@spielconsulting.com,  Or they can also just text me at 208-520-6900. I respond to all of those.

    And lastly, as a young doc, what would be the advice that I’d give you to be able to continue to take this ride and make dentistry something that’s really exciting for you?

    Keep learning. Keep growing. Alright?

    There’s this impression that school is designed to teach you the answers. And like my good friend Kirk Behrendt once said, school is designed to help you ask better questions—because the questions are the answers. So as you continue to ask yourself, “How can I continue to be a better leader? How can I be a better team builder? How can I continue to improve my clinical skills so that I can serve more people, so that I can continue to serve them at a higher level and even do it faster?”—those questions themselves will continue to make dentistry exciting.

    It will make this whole ride worth it. And it will also make it, in the end, the best investment that you’ve ever made—because you invested in yourself and your practice.

    Dr. Eric Block: That’s great stuff, Bob. Thank you so much. It was an excellent episode. Really appreciate your time.

    Bob Spiel: You’re welcome, Eric. Thank you.

    Dr. Eric Block: Thanks again for listening to the Stress-Free Dentist Podcast. And don’t hesitate to get in touch with me at info@thestressfreedentist.com.  And if you haven’t already, please subscribe on your favorite platform and leave us a review. Until the next episode, I’m Dr. Eric Block, the Stress-Free Dentist.

Resources


Recent Episodes

Episode #232: Debra Engelhardt-Nash – Fundamentals Of A Great Dental Practice


Listen Now

Episode #231: Dave Monahan – Why You Need A Membership Plan


Listen Now

Episode #230: Dr. Mark Murphy – Success with Dental Sleep Medicine


Listen Now