Selling Your Veterinary Practice to an Associate vs. Corporate: Why Partnership Buy-Ins Are Making a Comeback

Quick answer: For years, selling to a corporate consolidator was treated as the default exit for a veterinary practice. That's changing. As EBITDA multiples have come down and owners have grown wary of multi-year earn-outs, selling to an associate — a partnership buy-in — has become an equally strong, and often better, option. It keeps the owner in control, can leave them in a comparable or better financial position over time, and gives associates a real path to ownership. The catch: it only works with planning and the right documents.

We unpacked all of it on a recent episode of the Office Hours Podcast, where Roasa Law founder and veterinarian-attorney Lance Roasa sat down with Dr. Darby Affeldt, a veterinarian who became a financial advisor and has met one-on-one with roughly 3,500 new graduates over 17 years. Here's the breakdown.

The veterinary ownership pendulum is swinging back

After a long stretch of aggressive corporate consolidation, and headline-grabbing sign-on bonuses, a lot of veterinarians have become disillusioned with corporate ownership. New grads, sellers who already exited to a consolidator, and specialists alike are circling back to private, independent practice. Roasa Law reviews more than 1,000 veterinary contracts a year and is seeing the same trend: a renaissance of independent ownership, with more associates actively wanting to buy in.

A big driver is simple math. When corporate multiples of EBITDA were sky-high, a lump-sum corporate sale was hard to beat. As those multiples have come down, the gap between "sell to corporate" and "sell to your associates" has narrowed, and for many owners, the associate route now comes out ahead.

What a corporate sale really costs: the earn-out

Almost no corporate offer is a clean, walk-away check. They typically come with a four- to five-year earn-out, meaning you keep working in your practice to collect the full purchase price, but under someone else's operational control. As Lance puts it, you're on a train with no steering and no brakes: your only real move is to jump off, and that costs you money.

Increasingly, corporate deals also include equity in the acquiring company rather than all cash, equity that can be illiquid and that you may or may not get back if the consolidator struggles. You trade a concentrated, illiquid stake in your practice for a concentrated, illiquid stake in someone else's company.

Why selling to an associate can win

Sell to your associates and a different picture emerges:

• You stay in control the entire time, instead of handing the wheel to a corporate owner for five years.

• You often land in a comparable or better financial position four, five, even ten years out.

• The practice can become worth more to a future buyer because a team of signed-on partners lowers a buyer's risk.

• You can diversify. Darby's framing: your practice is like a single concentrated stock. Selling a slice lets you move those dollars into a diversified portfolio or, as one Roasa Law client did, into real estate (she's up to five or six short-term rentals across several states). Either way, the value isn't gone; it's spread out, which lowers risk.

  
  

Lance's version of the same point is the pizza analogy: yes, you sold 25% of the pie, but the pie got bigger, so your remaining 75% can be worth more than your old 100%.

Equity is now the price of keeping your best associates

Here's the part owners underestimate: your all-star associates are being recruited every week, on LinkedIn, at conferences, by corporates dangling partnership in a joint venture. At some point, more salary stops working. To retain top talent, you increasingly have to offer equity and a real partnership path. Losing a key associate doesn't just cost a salary line; it can take a large share of practice revenue out the door.

"But I have student debt." You can still own a practice.

One of the most common worries, especially for newer veterinarians, is student debt. Both Lance and Darby push back on the idea that it's a barrier. In fact, Lance literally titles one of his talks "You Can Be a Practice Owner (Even With Your Student Debt)."

It can feel counterintuitive, taking on more debt to buy in while you still carry student loans, but ownership typically raises your discretionary income enough to support the additional debt service. Whether you pursue loan forgiveness or pay loans down is an individual decision that should be mapped out, like a treatment plan, with a professional who does it every day.

How a partnership buy-in is actually structured

A common structure looks like this. Take a $2 million practice where the owner sells 25%:

1. The associate becomes the equity owner of $500,000 worth of shares (or LLC interest).

2. The associate issues a promissory note for that amount and makes quarterly payments over the life of the loan.

3. If the practice is priced appropriately, the practice's distributions largely cover the note payments, and the new partner builds equity over time, much like buying a home instead of renting it.

   
   

There may or may not be a down payment; that's negotiated. And owners who don't want to carry the note themselves have options, lenders in veterinary medicine will sometimes finance up to 100%, though they like to see liquidity.

There are also tax advantages. A lump-sum corporate sale is taxed all at once; stretching the sale over time through a buy-in can defer the taxable event and often lower the overall taxable amount.

Plan for the "five Ds" before anyone signs

The reason partnerships earned a bad reputation isn't partnership itself, it's bad (or nonexistent) planning. The old model was a handshake and maybe a note on a napkin. When tension arrived, and it always does, partners had no roadmap and stopped speaking.

The modern fix is an extensive partnership agreement that plays the "what if" game in advance. Roasa Law calls the core scenarios the five Ds:

• Divorce

• Disability

• Disagreement

• Disaster

• Disinterest (a partner simply wants out)

  
  

(Death belongs on that list too.) The agreement spells out who buys a departing partner's shares, at what price, and on what terms, including mechanisms like a put option (the partner's right to require the practice to buy their shares back). The more mechanical it is up front, the more certainty everyone has, and the less likely the relationship is to fall apart over money later.

The three-legged stool

No one professional does this alone. Darby's "three-legged stool" for any buy-in: a financial advisor, an attorney, and a CPA, ideally all veterinary-centric, because they've seen these specific transactions hundreds of times. You're an expert in veterinary medicine; this is theirs.

The real lesson: start early

The owners who do this well start in their 40s and 50s, while they still have runway, not at 68, exhausted and out of options. Ask your associates from day one: "What are your plans four or five years from now?" Get the partnership conversation going early, so no one feels blindsided or left out when a transition finally arrives.

Listen to the full episode

Lance and Dr. Darby Affeldt go deeper on all of this, the financial planning, the legal structure, and the mindset shifts on both sides of the table, on Office Hours.

Listen to the full episode here

Thinking about a transition on either side of the table? Contact The Roasa Law Group to talk through what a buy-in could look like for your practice.

FAQ

Is it better to sell my veterinary practice to corporate or to an associate?

It depends on your goals, but as EBITDA multiples have come down, selling to an associate increasingly rivals or beats a corporate sale. A corporate deal usually requires a four- to five-year earn-out under corporate control, while an associate buy-in lets you keep control and often leaves you in a comparable or better financial position over time.

What is an earn-out in a veterinary practice sale?

An earn-out means part of your purchase price is paid out over several years (commonly four to five) and is contingent on you continuing to work in the practice, typically under the new corporate owner's operational control.

Can I buy into a veterinary practice if I still have student debt?

Usually yes. Practice ownership often raises your discretionary income enough to support the additional debt, and financing can sometimes cover up to 100% of the buy-in. Whether to pursue loan forgiveness or pay loans down is an individual decision best mapped out with a financial advisor.

What are the "five Ds" in a veterinary partnership agreement?

Divorce, disability, disagreement, disaster, and disinterest (death belongs on the list as well). A strong partnership agreement spells out, in advance, what happens to a partner's shares in each scenario; who buys them, at what price, and on what terms.

How is a typical veterinary p

artnership buy-in structured?

A common approach: the associate buys a percentage of the practice (for example, 25% of a $2M practice = $500,000), issues a promissory note, and makes quarterly payments. When the practice is priced correctly, its distributions largely cover those payments while the new partner builds equity over time.

Who should be on my team for a practice buy-in?

A "three-legged stool" of a financial advisor, an attorney, and a CPA. Ideally all experienced specifically in veterinary practice transactions.

This article is educational and is not legal, financial, or tax advice. Consult your own advisors about your specific situation.