Hi {{firstname|everyone}},
Some of the most fragile DSO deals I have seen started with complete agreement.
Everyone liked the story. Growth was strong. Clinics were busy. Management felt capable. Advisors were aligned. There was no obvious reason to hesitate. In fact, the lack of friction was taken as a positive sign.
Over time, I have come to see this as a warning sign rather than reassurance.
The issue is not that people miss risks. Most experienced investors and operators sense them. The issue is that strong momentum makes it socially and commercially inconvenient to slow the conversation down. So the deeper questions get parked. Not because they do not matter, but because everything else appears to be working.
That is how alignment turns into assumption. And assumption is where value quietly starts leaking.
1. When Alignment Forms Around Results Instead of Structure
In DSO deals, early agreement almost always centres on outcomes. Revenue growth. Clinic count. EBITDA expansion. Those numbers form the basis of alignment. What gets far less attention is how those outcomes are actually being produced.
This is where risk hides in plain sight.
In dentistry especially, early growth is often driven by a handful of senior clinicians, founders, or operators who hold a lot of context in their heads. Results look stable, but the engine behind them is not yet institutional.
When alignment forms before this distinction is made, assumptions harden quickly. Then, this is what you do:
Break down performance by clinic maturity and leadership involvement, not just by headline averages
Ask whether decision making follows a defined process or whether outcomes rely on who is in the room at the time
Test whether operational consistency exists across sites or whether success depends on local heroes holding things together
Exit ready DSOs do this work early because they understand that investors eventually price structure, not just results.
2. Why Real Confidence Requires Discomfort Early On
Every scaled dental group carries natural tensions. Between clinical autonomy and standardisation. Between speed of rollout and depth of integration. Between founder intuition and institutional process.
These tensions are not signs of dysfunction. They are signs of a real organisation forming.
When early deal conversations feel completely smooth, it usually means those tensions have not been surfaced yet. This creates a false sense of alignment.
If you’re wondering how to undo that:
Create deliberate space for disagreement in early board and investor discussions, especially around clinical governance and operational control
Invite clinical leaders to challenge assumptions about scalability rather than just confirming current care quality
Use moments of pushback to define escalation paths, authority limits, and accountability while the organisation is still flexible
In dentistry, unresolved tension always shows up later. It shows up in integration. It shows up in retention. And it shows up when growth starts to strain systems that were never fully articulated.
Early discomfort is often the price of long term confidence.
3. How Comfortable Agreement Turns Into Fragility at Scale
Most DSO deals do not break suddenly. They soften.
EBITDA still looks fine. Clinics are still operating. But investor confidence begins to erode. Not because performance has collapsed, but because performance can no longer be clearly explained.
This is where early consensus reveals its cost.
Governance that was never fully defined starts to feel ambiguous. Informal decision making that once felt entrepreneurial begins to look risky. Reporting that once felt adequate starts raising more questions than it answers.
To that end:
Clarify who owns outcomes when clinics underperform rather than relying on informal intervention
Examine whether authority flows through roles or personalities as the group grows
Strengthen financial and operational reporting so it explains variance, not just records it
By the time these issues are named, the organisation is usually larger and more complex. Fixing them becomes slower, more political, and more expensive. What could have been designed early now has to be repaired under pressure.
That is the real cost of early comfort.
This is precisely why we built the DSO Exit 2030 Playbook.
Designed to help DSOs surface these questions before they become problems, the playbook helps replace comfortable agreement with real conviction. The kind that holds up as the group scales and as exit conversations get closer.
If you are a dental group owner or an investor who wants a clearer view of what actually sustains value through growth and into exit, the DSO Exit 2030 Playbook lays it out in detail.
Fully accessible and completely free, this is where you can read it:
Cheers,
Arun