Boost Dentist Engagement and Practice Value.
Equity is a powerful tool for DSOs to attract and retain clinical talent. But it will only incentivize dentists if they understand it. All too often, they don’t, and as a result they leave or underperform.
Financial jargon, complex spreadsheets, PDFs loaded with fine print. Equity management at dental organizations has never been easy. The founders of Pulse Equity recognized the gap and decided to do something about it. They soon realized how powerful a clear view of ownership is—not only for management but every unitholder.
We sat down with Pulse’s co-founder and CEO, Nicholas Mahalec, to talk about how Pulse can increase the value of dental practices and DSOs by improving dentist recruitment and retention.
Nick, tell us about Pulse’s origins. What sparked the idea for the company?
Our origins date back to my co-founder, Michael Stenclik’s previous role as a co-founder of Tend, a techforward dental startup. While at Tend, Michael realized that tech companies have software solutions for equity management, but the dental practices he was studying did not, even though many dentists had ownership stakes.
After watching one too many dentists leave money on the table due to a lack of financial knowledge and poor incentive alignment with management, he decided to investigate the issue: Specifically, how could we make it easier for dentists to understand the value of their equity while also aligning incentives with the broader needs of a company?
What did you find?
Higher dentist retention is generally associated with better patient outcomes, which ultimately tie back to the value of the company. Controlling for other factors, groups with top-tier retention can expect a 25-50% premium on their EBITDA multiple at the time of a transaction.
Equity plays a critical role in retaining talent for dental practices and DSOs. Its true potential is only unlocked when dentists fully grasp it’s significance. Unfortunately, a frequent disconnect occurs, leading dentists to depart or underperform, jeopardizing the long-term health of their organizations.
To be clear: dentists are not at fault for this. They don’t have finance backgrounds, and equity can feel inaccessible to them. So it’s incumbent on leadership to communicate the value of shared ownership. That’s what Pulse is here to help with.
What is Pulse?
We built an equity management platform for partnership businesses like dental practices that reduces the operational complexity of cap table and distributions management while providing dentists deeper insight into their total compensation.
Essentially, we’re eliminating those confusing excel spreadsheets that die on the vine if the CFO takes a new job and unwieldy powerpoint decks that confuse dentists more than educate them about their equity value.
How did you develop the platform?
We completed about 150 research calls with dental practices, DSOs, and other growing businesses to better understand challenges related to equity management and, most importantly, dentist recruitment and retention. Along the way, we’ve met some incredible leaders and are currently working with customers that in aggregate generate $1.9B in revenue across 220 locations, five of which are DSOs and dental practices.
Our product was built hand-in-hand with these early adopters, who have guided our development efforts to make sure what we’re building resonates not only for management but for dentists as well.
What can dental leaders do today to improve how they communicate about equity with their dentists?
We have a few recommendations:
1. TALK TO YOUR DENTISTS.
See if they actually understand what they own, or if they’re equating salary and total compensation.
2. EDUCATE THEM.
Meet your dentists where they are, though of course without talking down to them.
3. CHECK IN WITH THEM AFTERWARD.
See if your investment in education changed their investment in the growth of the practice.
4. CHANGE THE WAY YOU ONBOARD.
Welcome them into the process of putting patients first, by putting dentists first, by using equity to make dentists a part of something bigger.
5. READ OUR GUIDE.
We’ve put together a comprehensive guide called “Demystifying Equity for DSOs” that explains all the key concepts you and your team need to know to effectively manage equity at your organization.
Testimonials:
“We had a clinician say they were going to leave because they received a 10% ownership stake in another company and we only offered 3.5%. We never made it very clear how our ownership worked. So what they didn’t understand is their new offer would be $150,000 less per year. With Pulse we never have had to worry about this issue again.”
“It takes us on average 14 months to find, ‘put in the chair,’ and get a dentist up to $1M in annual billings. Keeping just one dentist makes Pulse worth it 20x over.”
Learn more about about Pulse Equity, download their guide, and book a demo with Nick Mahalec and team.