176: Growing Beyond Yourself: The Truth About Equity, Ownership, and Scaling

Yeah, no doubt.

Yeah.

Um, love it.

I love the context.

And I think we can, we can do a lot with that.

And I have so many thoughts here based on mistakes I've made in a few successes that I've had along the way.

Um, just for our listeners at home, uh, let me kind of create kind of set the stage, um, I think what we're going to end up talking about is two partnership structures.

There's hundreds, right? But the two that I'm most familiar with are the RSU model or what we'll call an earned equity model.

And for those of you guys that are not familiar with that, it's basically a model where the associate... doesn't have a buy-in per se.

The office creates a hurdle for that associate, typically an adjusted production hurdle or a collections hurdle, whatever you pay on.

And for every dollar that the provider goes above that hurdle, they earn equity.

So just to keep the math simple, let's say the hurdle's $800,000 in a year.

The doctor ends up doing a million.

That's a $200,000 delta.

In our world, 20% of that delta is what they earn in equity.

So 20% of 200 grand is $40,000.

So now the associate has earned $40,000 in equity in the business.

This is real equity.

It's shares that ultimately invest over time.

Everything's on the up and up.

Everything's legal.

The other model that we'll probably talk about is more of a buy in model.

Right.

So where there is a an evaluation of the practice, we decide what percentage of the equity we're willing to let go of or willing to sell.

The associate either writes a check for that or their seller financing or again, a bunch of different ways to do it.

Yeah, no doubt.

Yeah.

Um, love it.

I love the context.

And I think we can, we can do a lot with that.

And I have so many thoughts here based on mistakes I've made in a few successes that I've had along the way.

Um, just for our listeners at home, uh, let me kind of create kind of set the stage, um, I think what we're going to end up talking about is two partnership structures.

There's hundreds, right? But the two that I'm most familiar with are the RSU model or what we'll call an earned equity model.

And for those of you guys that are not familiar with that, it's basically a model where the associate... doesn't have a buy-in per se.

The office creates a hurdle for that associate, typically an adjusted production hurdle or a collections hurdle, whatever you pay on.

And for every dollar that the provider goes above that hurdle, they earn equity.

So just to keep the math simple, let's say the hurdle's $800,000 in a year.

The doctor ends up doing a million.

That's a $200,000 delta.

In our world, 20% of that delta is what they earn in equity.

So 20% of 200 grand is $40,000.

So now the associate has earned $40,000 in equity in the business.

This is real equity.

It's shares that ultimately invest over time.

Everything's on the up and up.

Everything's legal.

The other model that we'll probably talk about is more of a buy in model.

Right.

So where there is a an evaluation of the practice, we decide what percentage of the equity we're willing to let go of or willing to sell.

The associate either writes a check for that or their seller financing or again, a bunch of different ways to do it.