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Phase 1 Equity's Board Chair Brian Hamilton on What Orthodontists and Pediatric Dentists Need to Know to Accelerate Growth in 2024

Phase 1 Equity leaders spoke with Becker's Dental + DSO Review's Cameron Cortigiano about the investment landscape in 2024 and what doctors need to know about picking the right PE partner for success.

Accelerated Consolidation: Recognize the Right Opportunity

After the almost 50% decline in deal volume in 2023, there is an abundance of dry powder, and we expect investments to start flowing again in 2024. This is particularly apparent in orthodontics and pediatric dentistry, which are very attractive to investors due to their operating margins and resiliency.

At the same time, doctors at solo and group practices are looking for alternatives to the traditional DSO model for a number of reasons. As a result, we expect smaller, specialty-focused platforms like Phase 1 Equity to be increasingly attractive to both doctors and investors in 2024.

Emphasis on Autonomy: Retain Equity and Control

We consistently hear doctors express concern about giving up autonomy and decision-making if they decide to join a traditional DSO or MSO. We expect these conversations to dominate the consolidation landscape in 2024, as doctors seek platforms that enable ongoing autonomy, like Phase 1’s Doctor Equity™ model.

In our model, doctors remain involved in the governance of the platform, they have the majority of seats on the board and chair 100% of the Management Committees. Doctors stay at the helm of decision-making while leveraging the private equity experience of the management team. This leadership and governance model ensures alignment of interests for all parties. For us, the ultimate goal is shared governance, shared economics, and shared responsibility for driving innovation and growth for the practices.

Innovate: Technology-Enabled Growth and Patient Care

In 2024, we believe more practices will leverage technology and digital marketing tools to improve their reach, patient communications, and conversion, and drive innovation in patient care. Our goal this year is to support Phase 1 practices with continued investments in AI-powered technology, data, education, and knowledge-sharing programs, and expand our tools and resources in key areas including HR, finance, IT, operations, compliance, and marketing services.


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