Healthcare: MD’s on Cap Table

April 16, 2025

by a searcher from Babson College - F.W. Olin Graduate School in Boston, MA, USA

Hoping to speak with anyone experienced in reorganizing/ expanding their cap table to include a physician / key EE. Our company is reorganizing into an MSO for cross-boarder opportunities and as a non-physician owned entity entering CPOM states in the northeast we need to solve for at least one MD PC owner. It’d be very helpful to discuss with anyone from this community pros/ cons/ methods (performance based) of adding one of our employed/ practicing MD’s versus a currently unaffiliated MD (utility / interchangeable) to ownership. Any feedback would be appreciated - thank you.

Reply by a searcher
from St. Cloud State University in Sheridan, WY 82801, USA

Hey Matthew! Luke tagged me here. We’re about 90% of the way through a live MSO–PLLC acquisition in New York, fully CPOM compliant with a solo MD buy-through model. Happy to share how we structured ownership, physician alignment, and economic incentives without touching the MSO cap table. Our MSO owns all non-clinical assets: brand, IP, website, vendors, equipment, marketing stack, and leases or licenses them back through a compliant MSA. The PLLC is owned by the physician to meet CPOM and lender requirements, but we’re not giving equity. Instead, we’ve structured performance-based comp tied to defined milestones, and the MSO is providing a formal loan guaranty to support the MD’s obligations under the acquisition without disrupting cap table control. We brought in a healthcare and M&A attorney as equity-aligned advisors, which saved us over $150K+ in legal fees and gave us high-leverage support during execution. Curious what specialty you're focused on? Could be good to swap notes if we’re in different lanes.

Reply by an admin
from Massachusetts Institute of Technology in Portland, OR, USA

^redacted might be able to help here.

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