OD Exit Strategy Architecture:
Seven Structures Compared

Full equity sale to an independent OD buyer at a negotiated purchase price. Seller receives lump-sum at close (less any seller note component). Transaction typically structured as asset sale for tax purposes — producing a mix of ordinary income (non-compete, patient records, employment agreement) and capital gains (goodwill). Clean exit. No post-close clinical obligations beyond agreed transition period.

Sale to a DSO or PE-backed optometry platform. Typically the highest-multiple exit available to a Scottsdale-corridor practice. Buyer acquires clinical and administrative assets. Licensed OD signs transition employment agreement (12–36 months). Transaction may include earnout tied to post-close revenue performance — which can add 10–25% to total proceeds if triggered.

Sell 51–80% of equity to a DSO or PE platform now. Retain a minority stake (20–49%). Receive immediate liquidity on the sold portion at today's valuation. Continue practicing and participating in the platform's growth. At the platform's next transaction event (typically 4–7 years), the retained equity transacts again — the "second bite of the apple" — frequently at a higher valuation than the initial transaction.

A tenured associate OD acquires equity in the practice — either through a structured buy-in over time or a single-event acquisition at exit. Seller may accept a seller note, earning capital treatment on installments. Patient relationships and clinical brand are preserved. Staff continuity is highest of any exit structure. Multiple is typically 10–20% below external buyer levels but total net proceeds — after taxes and transition costs — are frequently comparable.

A qualified ESOP structure allows the practice to sell ownership to an employee trust — with significant federal tax advantages for sellers of C-Corporation stock (IRC §1042 election allows tax deferral on capital gains). Complex to establish and administer. Requires dedicated ESOP counsel and trustee. Most appropriate for practices with $3M+ revenue, substantial staff tenure, and a seller with a long-term wealth management horizon who can deploy proceeds into qualifying replacement property.

A structurally lower base price is offset by a substantial earnout — deferred consideration tied to post-close revenue or EBITDA targets over 12–36 months. When the practice meets targets, total proceeds frequently exceed any fixed-price alternative by 15–30%. The risk: targets are not always met, and earnout negotiations require careful drafting to prevent buyer manipulation of the triggering metrics. Requires experienced legal and financial advisory to structure properly.

The unstructured exit of last resort. When no buyer is identified and the practice closes, goodwill — the majority of practice value — is not realized. Hard assets liquidate at 10–30 cents on the dollar. Patient records must be managed and transferred per Arizona regulatory requirements. Net proceeds from a closure are typically 5–15% of what a properly marketed sale would produce. This outcome is almost entirely avoidable with 12–18 months of advance planning.