This week, the Dental Amigos welcome Diwakar Sinha, founder, CEO, and healthcare finance strategist at Polaris Healthcare Partners. With over two decades of experience in dental sales and acquisitions, practice growth, and capital sourcing, Diwakar brings deep insight into the evolving landscape of group dentistry.

In this episode, Diwakar shares his journey from traditional banking to strategic consulting and explores how younger dentists and multi-practice owners can scale responsibly, retain associates through equity partnerships, and navigate middle-market lending without defaulting to DSO sales.

To learn more about Diwakar and Polaris Healthcare Partners, visit polarishealthcarepartners.com or reach out to him directly at diwakar@polarishealthcarepartners.com.

Listeners who want to reach Paul can do so at Paul@DentalNachos.com and those who want to reach Rob can do so at Rob@RMontgomery-law.com.

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FULL EPISODE TRANSCRIPT

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Bumper  

Welcome to the Dental Amigos podcast with Dr Paul Goodman and attorney Rob Montgomery, taking you behind the scenes of the dental business world, all the things you didn't learn in dental school, but wish you had Rob is not a dentist, and Paul is not a lawyer, but since Rob is a lawyer, we need to tell you that this podcast is for informational purposes only and shouldn't be considered legal advice. Listening to this podcast does not and will not create an attorney client relationship, as is always the case. You should formally consult with legal counsel before proceeding with any legal matter. Learn more about the Dental Amigos at www.thedentalamigos.com. And now here are the Dental Amigos.

Rob Montgomery  

Hello, everyone. Welcome to another episode of The Dental Amigos Podcast. I'm Rob Montgomery, and I'm joined, as always, by the Head Nacho himself, Dr. Paul Goodman. Great to be talking, Rob. It's good to be talking to you, Paul, and happy to have a very special guest today—Diwakar Sinha, somebody who I've known literally for decades in the dental world. He has been around the block as far as practice finance and consulting, and I'm really excited to hear what he has to say. I know I had some conversations with him, and you have too. We're going to get a lot of really good material for our listeners. So, Diwakar is the founder and CEO of Polaris Healthcare Partners. Before that, as I said, he's been in the healthcare finance world for nearly two decades, serving at Sky Bank of America, Leaf Group Financial, and then most recently, he was at East West Bank, where he was Vice President of Healthcare Sales. Diwakar is passionate about healthcare practice success, and when not supporting deals, he can be found at industry events talking about the latest trends in M&A, dental practice management, and financial performance for general DSOs and specialty dental practices. He has a bachelor's from Ohio State University and a daughter. He's an avid cyclist, hiker, and foodie, and presently lives in Charlotte, North Carolina—which is, I think, the hotspot now of the dental world. I think, Paul, we do as much work in that market as we do anywhere in the country. It's great demographics, and it's definitely on fire when it comes to startups and acquisitions and deals. So, happy to be talking to somebody who's got boots on the ground there too. And now, without further ado, here's Diwakar Sinha. Welcome, amigo, and thanks for being on the show.

Diwakar Sinha  

Thanks for having me, guys. Appreciate it.

Paul Goodman  

Thanks for your time, Diwakar. We have a hard-hitting first question: If we were in Charlotte and we were getting nachos, where would you take us, and what's your favorite topping?

Diwakar Sinha  

Yeah, favorite place to go for nachos is Cabo Fish Taco. It's right in Ballantyne. And my favorite topic—I'm an avid cyclist, so I would weigh in with talking about Tour de France.

Paul Goodman  

I apologize. I like that, but I meant topping. What topping do you like in your nachos? Jalapeños?

Diwakar Sinha  

Favorite topping is guacamole.

Paul Goodman  

Guacamole. I'm a fan there too. I was down at Ballantyne for the Dental Success Institute with Mark Costes. A lot of fun recently, so hope to go there again.

Rob Montgomery  

We can have beers, eat tacos, and talk about the Tour de France—that time of the year, which I'm a huge Tour de France fan too. So I'm excited for this year's rematch. Yes, coming up. So, Diwakar, you're obviously—you know, I've got tentacles in lots of different ways in the space here in the dental practice transition world: private dentist deals, DSO deals, associateships, partnerships, all that stuff. So, as you look out in the landscape, and here we are now, towards the end of the second quarter of 2025 as we record this episode, somebody is thinking about transitioning their practice. Now, is this the time to do it in 2025? Should they wait? Or should they proceed? What advice would you give a client?

Diwakar Sinha  

Sure, yes. I think we always tell people, you know, they should transact when they're ready for a partner, right? I think that's—if they're thinking of transacting with a group practice or DSO, or if they're thinking about going doctor to doctor—to make sure they've thought through their finances and thought about, you know, what their retirement strategies look like. And if they're thinking about their retirement strategies, we're happy to have a review with them. They need to think about, you know, what their overall portfolio looks like, and that usually needs to be about a 10-year liquidity position, things like that on it. You know, beyond that, as far as capital markets look like coming out of '23 and '24, cost of capital is lower today in 2025 versus what it was in '23 and '24. If we look at SOFR, which stands for Secured Overnight Financing Rate, it is lower today by about 75 basis points on average versus what it was in 2024. So, Prime Index is 7.5% today, which is lower than it was in 2024. We can look at Treasury Indexes—they're lower today than they were, and as we go in towards the next six months, they're forecasted to be lower by like 50 basis points going into 2025. So, you can't time the market, right? I think people say those things going into 2025, towards the end of it. And you want to think about transitions. The average transition takes about three months to six months. One would argue 2025 is a really good time, because there's a lot of dry powder sitting around from 2023 to 2024. If you're thinking of transacting to another doctor or to another DSO or strategic partner, again, think about—are you ready to find a partner? Are you ready to transact with another doctor? 2025 is a good time to overall transact. And, you know, going into Q1 2026. That said, make sure you've kind of thought through the finances, thought through about finding the right partner. Those are things to kind of think about, and we're happy to have those conversations. Yeah, and I think that's really important for people to understand. You know, when you talk about what interest rates are in these different benchmarks, that's great. That tells you what generally the environment is, whether or not deals are happening—because there, for a while, deals really weren't happening at certain sizes. But what it really comes down to is: is it time for you to transact your practice? You know, and that might tell you some of these market conditions, whether or not you're going to get the absolute best possible price. But that's not always the best deal necessarily, or the best sort of benchmark for practice sellers to chase. I don't think that's correct. And the average—just on a doctor-to-doctor transaction or a doctor-to-group transaction—again, I'm not a CFP, but I think most people need to think about that. They need to have, on average, 10 to 15 times their post-tax retirement need to retire on for a 25-year stream of income. So, if let's say, you know, a doctor needed to have $200,000 to retire on for the next 25-year stream of income at a 5% rate of return, that would mean they need roughly around $3 million in a liquidity event to retire on. Just—that's, you know, $200,000 times 15. That would give them a 25-year stream of income at a 5% rate of return. These are the things for your audience members to kind of think about as they're thinking about transacting their private practice or their emerging group practice. So, these are just kind of things that we would walk them through on a doctor-to-doctor trade or a doctor-to-group practice trade.

Rob Montgomery  

Yeah. But even so, even when you're talking about the numbers, I mean, there's so much more that goes into—especially like a doctor to a group practice. I mean, if you're doing a doctor-to-doctor deal, they're pretty straightforward. You know, depending on the size of the practice, the seller is either going to stay on for some period of time and provide clinical dentistry or not. Straightforward. You know, you're selling all the assets, you're walking away. There's no equity rollover, there's no holdbacks—any of that. But when you start to get into DSO transactions, there's a lot more variables in terms of deal structure, from group to group, or opportunity to opportunity, that—you know, I don't think you can just look at the top line on an LOI and say, "This is what the valuation is. This valuation says $11 million. This valuation says $10 million. Therefore, the $11 million deal is right for me, and it's the most money, and that's what I should do, and I should do it now."

Diwakar Sinha  

Correct. Yeah, I think, you know, when we look at these deals from Deal A to Deal B, I think you have to look at tax structure. You have to look at it as—one deal could offer joint venture or some DSO equity. One could offer HoldCo equity. You have to look at how those deals have historically performed. You have to interview Buyer A to Buyer B. You have to look at the past deals they've done, previous sellers they've done partnerships with, how that culture performed. I think culture is also important. And also, you have to see—hey, are you ready to partner up with the DSO yet? Right? I mean, have you kind of finished out your journey? I think all those things are important. It's not just the economics of a deal. And I think those are the things we're talking to people about as we're thinking of potentially partnering up with a strategic partner.

Rob Montgomery  

And I think that's another key thing—and that's what you do well—and I think it's important for people to realize this too, that it's really important to have personalized consulting. You know, Paul, it's like somebody that knows you, understands your situation, what you're looking for. Like, there's no, like, right answer, like, "Who is the best DSO to sell to?"

Paul Goodman  

This is one you could live in a post where there are two good answers for people. I want to ask this—as the only dentist on this podcast. I went Nacho nuts enough to go to dental school. Diwakar, I have a couple kind of story-based questions or things for the audience. You know, Dentist Job Connect is one of the things I do—help people hire associates from a solo GP to a group practice to a DSO. Love doing it. And I think what might surprise some people who are not in the dental world is how young these owners are coming to us to want their first associate, right? These are sometimes people who just bought a practice two years ago that was doing a million dollars, and now they grew it to 1.8 million. And they go, "I can't do this alone," and they're only 31 years old. So I think one thing I could share as someone who takes these quote-unquote calls every day is—these are not 62-year-olds who want to play more golf. They are people who just bought a practice. I'm going to turn this to a different question to you. Tell me the age of some of these dentists that are coming to you with $3 million practices and one associate saying, "Hey, Diwakar, should I sell to a DSO or grow my practice? Should I buy more practices?" You know, I know it varies, but what's the most common age of the clients coming to Polaris to ask these questions?

Diwakar Sinha  

Great question, Paul. Mid-30s to mid-40s, right? So they're very young as far as age demographic, because they're looking to build group practices. They're looking to bring on associate partners and/or associate doctors as partners, because they're looking to scale. And the other side is—some of our practices that are building, they're building legacy practices. They may not be looking to transact to a DSO or a bigger platform. They're looking to build just doctor-owned practices. So, you know, the majority of our clients are mid-30s to mid-40s.

Rob Montgomery  

It is—I think that would surprise our audience members, because they think of people... I mean, I think the whole concept of "selling"—the word is a bad word, because it has so many different meanings to it. What's selling? What's partnering? You know, most of the time people think of selling your house, and you don't live in that house afterwards with the new buyer, right? But in the DSO world, you "sell" your practice, but then you are partnering with someone. Tell our audience now—what's the most common number of years these owners are committing to work with the DSO or DPO post-sale?

Diwakar Sinha  

Great question. So I think the number of years you decide to partner up with a DSO or DPO is going to decide your enterprise value. So I think minimum of three years. Average is five years. And it also depends on your specialty. So when people are looking to transact, we always tell them, you need to come to us at least five years in advance of a transaction, so we can help guide your valuation expectations. If they come to us and they're ready to go to the Bahamas tomorrow, they're not ready for a DSO or DPO transaction. So we're usually coming to them saying, "Okay, we at least need three years if you want to go to a DSO." Otherwise, it's going to be a doctor-to-doctor deal, or might be an associate deal. And there's nothing wrong with that. You know, if they want to transact to an associate or another doctor, I think those are still good deals out in the market. So minimum needs to be three years, and usually ends up being a five-year deal if they want to maximize the value of their practice towards a DSO deal.

Rob Montgomery  

I think it's interesting, and I've really seen that change over the last, certainly five to ten years, where we have so many people coming to us that are considering selling that are much, much younger. I mean, as to your point, Paul—and I know where you're going with that question—it's no longer the old practice owner who's had the practice for 30 years. There is a much younger population that's looking to transition. Question though, with that, Diwakar—like, we talk about partnering with the DSO, and the fact that we're talking about younger people—I mean, presumably, I mean, they're doing it because they feel like they need to do that to grow, in some instances. Because a 35-year-old dentist more than likely is not looking to retire. And even if a DSO is going to pay them $4 million like that—or just, you know, pull a number out of the air—that's not getaway money. Like, if you're 35, you're not saying, "I'm done working for the rest of my life," right?

Diwakar Sinha  

That's correct, yeah. I think part of the reason is that they're, you know, limited on capital, right? You know, part of it could be people are relocating. So if they're up in the Northeast, or if they're in the Midwest or California, they're looking to relocate to the East Coast or so, right? You know, so they might be looking to move to a different environment. But, you know, part of the reasons are—is credit capital, right? So I think they're looking at limited capital available, but I think there's a lot of credit opportunities out there for them to continue to grow in the market. We have clients that have $20, $30, $40 million in capital available that are continuing to scale privately, right? And not transacting.

Rob Montgomery  

Let me stop you there. Let's break this down for our audience. Because I think this is one of the things that people don't necessarily understand until they've gone through this or they're knee-deep in it. The reason why a lot of times there are perceived to be two options—you know, I'm going to sell to a dentist or I'm going to sell to a DSO. For the most part, you're looking to sell to a DSO when your practice becomes a certain size where it's going to be too hard for a dentist to find financing. So when you're looking at these different options—and it gets really hard also to buy practices— So the conventional healthcare lenders out there, the Providents and the Bank of Americas, they'll do like a few deals. But if you're looking to borrow money to do five or ten practices—and hopefully those guys won't kill me for saying that—it gets really hard to get money from them. So, you know, what people need to know is there is another alternative to the conventional lender or doing that DSO deal, where you do give up a lot of control. And so that's what you're talking about—this middle market stuff. So elaborate on that, because I think that's something that people don't really realize— That there is this other option that they can retain all of their equity and continue to grow, especially for younger docs who aren't looking at, "Oh, okay, I'm three to five years away from retiring."

Diwakar Sinha  

That's correct, yeah. So I think—as they, without going into individual names—I think as they exceed $3 million in debt cap position with any of these traditional banks out there, they hit a funding wall. About $2.5 to $3 million, they start hitting a funding wall depending on the institution. That's traditional commercial banking, practice finance, things like that. But different institutions—you know, that's where we really start to come in and become competitive in the space, where we can source lower middle market capital to middle market capital. Lower middle market for us being $3 million to $20 million tranche of debt, and then middle market being $20 million to $200 million in debt. So the first tranche of debt resource will be for our people looking to scale that are one to two locations per year minimum—de novos or acquisitions— And that's going to get them to about $20 million in debt. That's about $5 million to $7 million in EBITDA of their business. So, you know, if your audience members are saying, "Hey, I want to get to roughly about $20 to $25 million in revenue, and I think that's the kind of business I want to build," That's about $5 to $7 million in EBITDA. That's about a 20% to 22% EBITDA business they're trying to build. That's the lower middle market debt. You know, that's a lot of banks we can source in the market. Above $20 million in debt is middle market capital. That's the $20 million to $200 million in debt tranche they're looking for. That's going to be $5+ million in EBITDA to about $25 million in EBITDA. That's a lot of capital in the market still available. That's the kind of space we can easily source. Above $100 million is institutional—that's also available. But I don't think a lot of audience members are looking to scale there, you know? So we play...

Rob Montgomery  

So we may actually have to start charging them a fee for listening to our show...

Paul Goodman  

Let me jump in for a second...

Diwakar Sinha  

We'd love to help out. Yeah, yeah. $300 million we've sourced out there. So yeah, that capital is available. You know, I've always told people—I can get you in debt. I used to be—I've been in credit banking for years. The question is, can we be responsible with that debt when we help advise you on credit? What is the purpose of that debt, and what are we trying to do with that debt? So I think that's really the question for the audience members. And when we source that debt for them, and we advise them on that debt...

Paul Goodman  

I want to say something or share something. You know, Rob's been my attorney, and he's told me that was Nacho nuts multiple times and helped us avoid problems. So I just—I remember we were going to purchase—my brother and I were going to acquire another practice, and we hadn't done one in a while. We were going to get funding from a traditional bank. And I remember they asked me a lot of fairly annoying questions about it that I was like, "Can't you just give me this money?" You know, like, if we have these practices already? I felt irritated by the questions they were asking. That deal, because of some real estate challenges, never went through—which was good for us. But I want to ask this question, Diwakar. So I was like—I had two practices with my brother that were running, and we were just trying to get a third location, and we were going to get the funding. But I felt that they were asking me a number of questions that were like, "Why aren't you just going to give me this money?" I thought, you know—tell me about this person who's like, "Okay, Diwakar, I want to do that $25 million thing. I want to build the business with $5 million in EBITDA." But what does that dentist look like? What do they have to prove to these people with the money that they know what they're doing—whether it's operational systems, clinical systems? I think our audience would love to hear something like that.

Diwakar Sinha  

Yes. I mean, I think the question is really what we're going to be asking them first, to be able to prove that to the institution. So, in the early stages, we want to get them to about $1 million to $2 million in EBITDA and show they have systems to scale within their platform. Or $3 million in EBITDA—that they have a regional operations team that can be forward-thinking to project an outcome and deliver an outcome, right? So let's go back to publicly traded companies, okay? If you think about a stock—a publicly traded stock—the reason a publicly traded stock will, on a quarterly earnings, raise stock prices or reduce stock prices, Is the ability of that executive team to forecast earnings per share, revenue, and hit that. Okay, that is what we want our principal doctor and their executive team to be able to do— To forecast revenue with us, forecast the number of patients they're going to see, production per patient they're going to be doing— If it's an ortho PO, general dentistry, endodontics—and be able to hit that target on a quarterly basis or an annual basis. So we do that with our clients when we do consulting with them—12 months out, six months out, quarterly out. And if we can do that on a forecasted basis and show that to a bank—and the banks love it, because that's how banks work, okay? And we want to do that on a forward-thinking basis for the bank. And if we can do that—banks love projections. And I'm sure when you went for funding—and Rob's probably seen that over and over—banks love performance on startups, on acquisitions. They ask these questions: What will you do with this acquisition? What will you do with this startup? And we do that in all of our credit capital sourcing. We say, "This is what our client does. They're $1 million in EBITDA, $3 million in EBITDA, and with this acquisition, this is what they're going to do." One of the things we do in our credit capital sourcing is—we do what's called a delay draw term loan, which also stands for credit facility. Whatever our client's existing debt is, in addition to that, we source a credit facility, which is like a line of credit for them to draw, To acquire additional de novos or acquisitions. So that is based on projections. So in order to do that, we have to be able to show that our client was able to hit historical projections. So that is the ability to forecast things and actually execute on their projections.

Paul Goodman  

Thanks for sharing that. One question for the tournament, Rob. So let me just think of a call from 42 minutes ago, where a multi-practice owner said, "Paul, my associate of five years, who I count on for a lot of things, is now going to leave and start his own practice." So you're going to need a new one of those associates. If I was the person lending this money, how does the dentist deal with— Well, who are all these dentists going to be, and how are they going to stay in this organization for you to scale? Because what if they leave and all start their own practices?

Diwakar Sinha  

Well, I think one of the things that group practice owners need to be thinking about is a partnership strategy. And you know, obviously, you have an amazing associate placement strategy. So as you're placing associates, a lot of these group practice owners need to be thinking about how are they retaining these doctors as a long-term partnership strategy. So as doctors are becoming super producers within their practice, within the different specialties they have—general dentistry and specialties they have— What does their partnership strategy look like for them to retain them long-term within their business? Because they need to make sure they have a place for them to stay on as they're becoming meaningful producers within their practice, right?

Rob Montgomery  

Which is exactly what DSOs do well—for different reasons, I guess. But ultimately, partnerships are retention strategies. And not to be, you know, kind of snide about it, but it is what it is. And I think obviously that's why DSOs do it. They do it differently than what a lot of private practice owners do or have to do. And so it's a little more obnoxious sometimes in the DSO world, but it is a strategy that I think a practice that's looking to grow needs to think about, Diwakar. Because, as Paul is saying, if you're losing people or they're jumping off the ship, it's hard to keep the boat moving forward, right?

Paul Goodman  

You probably see this all the time with your clients. I'd love to hear—this multiple practice owner who I know well, I think his greatest fear is that he's going to have to go back to doing dentistry, Which is what he doesn't want to do, for two reasons. One—you know, there's only one thing in life, Diwakar, that's 100%. Rob and Diwakar, they say nothing's 100%, but this is 100%. No dentist in the history of dentistry, after reducing days, has ever wanted to go back to more days. Four to three, three to two to one—because dentistry is full-contact arts and crafts on people who don't want to be there. So once you go from four to two, you never want to go back to four. And then also, that dentist is the leader of that organization. And he cannot go acquire more practices, and he cannot manage the team, and he cannot install his vision if he's doing class II composites. I also have a fail-safe retention strategy, Diwakar—no charge for this—for your clients. I have two associates, and what I do is, when we're in the dentist office by ourselves, I complain as much as possible about how hard it is to own a practice. So they never want to own a practice. "Oh, you're going out having wine this weekend? I'm going to be doing payroll." I don't even do payroll. "It's not a life. You believe it?" George Costanza. But I'm joking about that. I said that. But I mean, I would say—just like, you know, when it makes sense, it makes sense to partner an associate. But sometimes it doesn't make sense. Rob, we've seen a lot of retention strategies. So tell us a little bit about how you help these dentists retain associates in a way that's a win-win for both sides.

Diwakar Sinha  

Sure, yes. I mean, I think the traditional model in the market, which I think works very well, is a buy-in model, right? So traditionally, how the market does it is that if a practice is worth a million dollars, a doctor can buy in for 25% or 50%, which is $250,000 or $500,000. And we have a buy-in model also where we can do some pro-rata portion of a buy-in position. What we found really works well for a lot of our group practice owners is—as they're scaling their business and expanding their group practice—we do it on the growth of the business. So let's say a practice is growing from $4 million in value or $5 million in value to $6 million in value. We'll do it on the growth of the business, and that's where I think a lot of group practice owners find value. So we'll look at the profits interest units as a solution, or RMU as a solution, and we'll do it on the delta of the growth and provide associates equity in the growth of the business. And so practice owners find real value there, because they're not giving up equity in what's already been built, But they're more than happy to provide equity in the growth of the business. So if the group practice goes from the value of, let's say, $5 million to $20 million in value, And they're providing ten other associates half a million to a million dollars in equity— They don't mind giving up equity in the growth, because those associates are creating value in the growth.

Rob Montgomery  

Right. Because otherwise, yeah, it's like—we talk about hiring an associate, bringing in a partner—it's the same thing. The pie is the pie. And unless you're planning to continue to expand—and even if you are—you have to take into account that you're going to be sharing this with your partner, and there's less for you. So if the pie doesn't get bigger somehow, or you don't have the strategy or the structure that Diwakar's talking about, You don't want to have more headaches and make less money. Which is what sometimes growth looks like. I should say—growth that's done wrong. Bad growth is done that way. You know, I see that it's either—there are two problems that I see, Diwakar. One—that it's not structured right, so you're just taking on more headaches, more revenue, but not making more money. And the other thing—which kind of goes back to what we were talking about a few minutes ago— When you're looking at scaling at those levels that you're talking about, where you're bringing in other alternative lenders, You can't really be a chairside dentist, certainly not with any frequency, and be able to do that. And/or I feel like you also have to have some sort of management team in place. This is not just a practice owner that owns 100% of this, running around wearing ten different hats and doing dentistry. Like, to me, that's a totally doomed business model. I don't even want to call it a business model.

Diwakar Sinha  

Yeah. And the other thing is, like, a lot of bank covenants just have a change of control provision. So as you're bringing in partners, you have change of control provisions. So when we source middle market capital or lower middle market capital, we negotiate the covenants to bring in the partners. So usually we keep that under a 20 to 25% equity provision. We make sure, as you're bringing in diluted positions to bring in associate partners, we do a forward-looking projection again—growth projections and everything— To make sure that these junior partners that are becoming associate partners are still staying in compliance with bank covenants. So everything's forward-thinking within the business to make sure the bank's okay, we can still grow within the business, The credit facility is okay, the associates are realizing meaningful equity, so they're okay, and the business is okay.

Rob Montgomery  

And then, generally speaking, are those associates that are buying in as partners—they're not being asked to guarantee the debt of the practice or the organization, are they?

Diwakar Sinha  

In most cases, not. And that's why we're trying to make sure that the covenants within the bank are in compliance, right? Because at some point it gets triggered that they have to guarantee. So we have to be forward-thinking about those things.

Rob Montgomery  

Right. Because that could be a bitter pill to swallow if somebody's buying in 25% of one location of a 10-location group, And then all of a sudden that requires them to personally guarantee $15 million of debt. That doesn't seem like a really appealing offer to partnership.

Paul Goodman  

One question, Diwakar—touch on for a minute. Bo, did you want to say something more about that before I...

Diwakar Sinha  

Yeah. Just one more thing, yeah. Thank you, Paul. I was going to say—some of these middle market institutions, we can negotiate covenants to provide a limited guarantee. So I think, Rob, as you know, like in compliance governance, you can have limited guarantees on bank governance. So we can negotiate those things.

Rob Montgomery  

Right. And the details matter with this stuff.

Paul Goodman  

And now again, as the only dentist—before we have to finish up shortly—I wanted to ask this. I think it'd be valuable to our audience. So it's important, on every podcast from now until February 2026, Diwakar, that we mention that the Eagles are the current Super Bowl champions of the NFL. And what I'll kind of put this question as is—like, who you might want to play golf with is not necessarily the person you'd want to be your dental partner. Nick Sirianni, the coach of the Eagles, is very emotional, very fiery. Runs up and down the sidelines, and my sense is the coaches around him are more subdued. And Dan Campbell from the Lions—kind of similar. So my sense is—tell us about the, you know, let's just say, the dentist getting their first associate to partnership. You know, if they find someone like them, they're going to say, "Well, I can go do that too. Why would I want to be a partner with you for 25%?" So what are the personality types that mesh well in these relationships, so that both sides feel like they are winning? You know, outside of the money part—I'm just kind of talking about the soft skills part, or the emotions part.

Diwakar Sinha  

You know, I think personality-wise, when we get into these partnership situations, we focus on people that get along well outside of the clinical aspect and that are clinically aligned. We focus on doctors that clinically focus on things together first and that are solving for each other. People that don’t solve for each other—we find that, independent of anything else we look for—are not going to work out in a partnership. No matter the economic solution we’re offering—we’ve gone into partnerships where we’ve offered $1.5 million, $2 million in equity, because they’re big, big DSOs. Or, when I say DSO, these are doctor-owned groups that we’ve offered that are not working. So a good partnership works where the principal doctor is looking out for the junior doctor, and the junior doctor is saying, “You know what, I want to be part of this group, and I feel what’s been offered to me is a really meaningful opportunity.” So I think the chemistry of looking out for each other is really important, and the clinical values have to be similar. Those are the two things that, in all of our partnerships, we’ve found to be important. We believe in partnerships—we’ve done probably 30 to 40 a year of these partnership deals, and they work out really well when people are looking out for each other.

Rob Montgomery  

Great points. And let me add—I’m also going to guess—when they’re well planned. And obviously, there’s no partnership that you’re consulting on that isn’t, but I see a fair amount of garbage come across our desk with proposed partnerships. And I think when you say, “Hey, we’re going to have a partnership,” that’s not like the beginning and the end. That’s not a term of art. There are so many variables and nuances to that that you have to make sure you get right. You can’t just dive into that blind and say, “Hey, we’re going to be partners.” There’s so much planning that goes into that—cultural fit, clinical fit, but then economic planning. To me, when I’m having those conversations with clients for the first time, the first question I want to know is: Who are you working with to help you do cash flow projections for this partnership? Because you can’t understand what the ramifications are. You can’t make informed decisions about how this is being structured, or when or whether to partner, if you haven’t done that step. And a lot of times, people will come to me and they’ve been beating themselves up for months—and sometimes years—trying to figure out what the right thing is to do because they haven’t taken that step. And once you actually start to take these right steps and do the planning, then all of a sudden the decisions become obvious. But again, that’s the importance of not DIY-ing it, Paul and Diwakar, right? Big, big surprise—and then getting custom consulting, where somebody that understands you, your business, your goals is giving you advice as to how you’re going to meet those goals. Not something that somebody goes on Facebook or a blog or writes a book and says, “This is the way to do a partnership.” Same thing—“This is the way to do a startup.” “This is the way to acquire…”

Paul Goodman  

Getting such a wide group—we get so frustrated when our patients bring us stuff they’ve read online into our operatories and dispute some type of care because of that, Yet they will turn around in their business lives and act like a patient that would frustrate them so much. You know, when they say, “Could I get someone’s contract printed out?” or “I saw this on a Facebook group…” As someone who runs a big Facebook group—Rob and Diwakar—these are just a bunch of people talking about stuff. And when it comes to making big decisions, hire people that are professionals in that stuff and do it every day.

Rob Montgomery  

Yeah, well—hire people. That’s the DIY part. But I think again, it’s important to work with consultants that are giving you custom consult. People that are giving advice that’s quote-unquote scalable for their business—that means everybody’s getting the same thing. And if you feel like you’re working with somebody that’s telling you—and all the rest of their clients—the exact same thing is the right thing for them to do, That’s a big yellow flag. A red flag, actually. Take a step back and say, “Why? Why is this good for me? Or is this good for this other person?” It’s just easier for them to stamp out the same advice all the time—totally. And that’s one of the things that Diwakar and Polaris—I think you guys do really well. And it’s part of your mission that I’ve observed.

Diwakar Sinha  

Yeah, partnerships are great. And I think, like I said, we’ve done a lot of them. I think—done right—could be very attractive for building a group. Not to say you can’t do it yourself, but I think the journey is more exciting when you have doctor partners with you to build the right group. As we just talked about, credit capital is readily available. I think the next three to five years, the capital markets are opening up, pricing indexes are going to be going down. So I think being ahead of that journey, ahead of that process, is going to be very important for people. Yeah, good stuff. Well, Diwakar, it’s been great chatting. If people want to get in touch with you or learn more about Polaris Healthcare Partners: [polarishealthcarepartners.com] Or they can send me an email at [diwakar@polarishealthcarepartners.com].

Rob Montgomery  

And all that will be up in the show notes as usual. Well, it's good talking to you, amigo.

Paul Goodman  

Great talking to Diwakar.

Rob Montgomery  

Yeah, it's good to have you. I knew we'd have some good stuff here. Thanks for sharing with us.

Diwakar Sinha  

Thank you. Thanks for having me.

Rob Montgomery  

Interesting stuff, huh?

Paul Goodman  

Yeah. I mean, it's just—there's more creative things out there that people should know about. Kind of what we like to do is just share the options that you have, like we talk to our patients about different treatment plan options. I think sometimes these large practice owners feel stuck, like it's just one red or blue door. Yeah, there's more doors out there.

Rob Montgomery  

Yeah, there's a green door too, right? And that's so true. I mean, I think a lot of people, as they get into growing their group practice, they get frustrated with the conventional lenders— Who, thankfully, they're out there, those banks, because they really fuel a lot of the transition market with great loan terms. But that's what they do. They do those initial deals—a few offices—and then you kind of go into the next place. And I think a lot of people don't realize—there certainly aren't a lot of consultants out there talking about this like Diwakar and Polaris are— That there's another option to selling to a DSO. Like, once you outgrow your—we'll call them your initial lender—there's another loan partner, debt partner, that you have that can get you to the larger platform before you do your DSO. You don't have to say, "Oh, I've got four practices. I can't get financing to buy a fifth, therefore I have to sell my practice to a DSO." There is hope, right?

Paul Goodman  

I like that. Yeah. So it's good. It was interesting to hear. And as someone who has two practices and is still in this game and doing it, it's nice to know that there are people out there that you can go to to get these questions answered.

Rob Montgomery  

Yeah. And again, I think working with people—as we said a few times during the show—that are really giving you custom consulting, That want to know what your goals are, that are going to help you get to those goals, is invaluable. And it's just worth so much more than somebody that's just stamping out generic advice for all. 100%. All right. Well, thanks everybody for listening. It's good talking to you, Paul.

Paul Goodman  

Thanks, Rob.

Bumper  

Thanks for listening to another great podcast with the Dental Amigos. And don't forget to tune in next time to have the dental business demystified. If you're looking for more information about today's podcast, you can find it on the dental amigos.com if you're looking for Paul, you can find Paul at drpaulgoodman.com and if you're looking for Rob, you can find him at yourdentallawyer.com This podcast has been sponsored by Orange Line Media Group, helping dentists and other professionals create content people love. Find out how we can help you take your business to the next level at www.orangelinemg.com. Till next time.