Why a Fast-Growing Tech Scale-Up Chose a Danish Holding Company Before Bringing in Investors

A rapidly expanding software-as-a-service provider in the digital marketing space was preparing for a major funding round. The founders operated through a single operating company registered in a Central European country, holding all intellectual property and client contracts there. Venture capital funds from Scandinavia and the UK expressed interest, but their term sheets contained conditions about governance, exit rights and tax efficiency. The founders realized that their current structure was not aligned with international investor expectations. They turned to Radner's team to explore whether a Danish holding company structure could solve these issues before closing the round.

The engagement started with a strategic workshop focused on investor requirements. Radner's team reviewed draft term sheets, paying attention to liquidation preferences, drag-along and tag-along rights, and board composition. The team also analyzed how different jurisdictions would treat share option plans for key employees. It became clear that investors preferred a neutral, well-regarded jurisdiction with predictable corporate law and strong treaty networks. Denmark emerged as a leading candidate because it combined a robust legal framework with favorable participation exemption rules for share disposals.

Radner's team then conducted a technical assessment of how to interpose a Danish holding company above the existing operating entity. The analysis covered corporate law steps, potential tax on deemed disposals, and the treatment of existing shareholder loans. A key question was how to move the company’s intellectual property into a structure that investors would accept without triggering excessive tax. The team modeled several options, including direct transfer of shares to the holding, contribution in kind and partial re-domiciliation of assets. Each scenario was evaluated for capital gains exposure and administrative complexity.

After discussions with local tax advisors and the founders, a clear path was chosen. A Danish holding company would be incorporated as the new parent, and the founders would contribute their shares in the operating company to this holding in exchange for shares. Radner's team coordinated the incorporation process, drafting the articles of association to accommodate future preference shares and convertible instruments. The share capital structure was designed to allow for multiple share classes, so that investor preferences could be implemented without restructuring later. This forward-looking design was crucial for aligning the holding with anticipated funding rounds.

With the holding company registered, attention shifted to aligning the group’s internal arrangements with investor expectations. Radner's team prepared a governance framework that defined the roles of the Danish holding board and the management of the operating company. The framework included reserved matters requiring board approval, information rights for investors and clear procedures for approving budgets. By embedding these rules at the holding level, the team ensured that investors would have a transparent mechanism for oversight without interfering in day-to-day operations. This structure also made it easier to implement employee stock option plans under a single cap table.

Negotiations with investors resumed with the new structure in place. Radner's team supported the founders in explaining the rationale for the Danish holding and how it addressed tax and legal concerns. Investors appreciated that their shares would be in a jurisdiction they knew well, governed by familiar corporate law principles. The team worked with legal counsel to draft a shareholders’ agreement governed by Danish law, reflecting the agreed economic terms. Because the holding company had been designed with multiple share classes, preference shares for investors could be issued without any additional corporate restructuring.

From a tax standpoint, the Danish holding company created a clear route for a future exit. Radner's team documented how a sale of shares in the operating company by the holding could qualify for participation exemption, subject to conditions. This meant that proceeds from a trade sale or secondary transaction could be received at the holding level with minimal tax friction. The team also analyzed scenarios where investors might exit through a sale of their shares in the holding itself. In each case, the Danish framework provided a predictable environment, which investors factored into their valuation models.

The intellectual property question was handled with particular care. While the IP remained legally owned by the operating company, the Danish holding company became the contractual counterpart for certain strategic licensing and partnership agreements. Radner's team helped structure intra-group agreements so that economic rights and control were clearly anchored at the holding level. This reassured investors that the core assets of the business were effectively controlled by the entity in which they were investing. At the same time, local R&D incentives in the operating company’s jurisdiction were preserved.

As the funding round closed, the benefits of the new structure became tangible. The company secured a significantly higher valuation than in earlier discussions, partly because the investor base broadened once the Danish holding was in place. Radner's team observed that international funds were more comfortable joining a syndicate when the top entity was in Denmark. The founders gained a clearer path to a potential IPO or trade sale, with the holding company serving as the natural listing or sale vehicle. The cap table became easier to manage, and future option grants could be issued from a single, well-structured entity.

Over the following months, the Danish holding company proved its strategic value. New partnerships with global platforms were signed at the holding level, simplifying contract negotiation and risk management. The founders had a robust, investor-friendly structure that supported rapid international expansion. By introducing a Danish holding company before the major funding round, Radner's team helped transform a promising tech scale-up into a globally investable platform, with optimized exit options and a governance framework that matched the ambitions of both founders and investors.