In the past week, discussions have been heating up in Denmark following a proposal to introduce a wealth tax on illiquid shares.
This creates liquidity pressure on individuals whose wealth is tied up in operating businesses. To pay the tax, they must extract capital from those businesses — capital that could otherwise have been reinvested or deployed into new startups.
If a wealth tax applies to illiquid startup equity, founders may face tax bills based on valuations that exist only on paper. If Denmark introduces additional structural friction for founders, we would find it difficult to recommend other founders start companies here.
Denmark is already struggling to build large global technology companies. And one of the reasons is that our ecosystem is still relatively immature compared to many other countries.
The Norwegian playbook
One country that has already introduced a similar wealth tax is Norway. And the consequences are plain to see.
Norway’s wealth tax applies annually to the estimated value of privately held shares, even if those shares are illiquid and have generated no return. In principle, the goal is redistribution. In practice, something else has happened.
The capital that many Norwegian investors previously used for angel investments is now needed to cover their own tax obligations. Several investors have said clearly: the money they used to allocate to startups now has to be taken out of their operating companies to pay wealth tax.
That changes behaviour.
Early-stage investing is already high risk. Returns in the startup asset class have not been strong over the past decade. When you add an annual tax on unrealised paper value, the risk-adjusted equation shifts further. It doesn’t kill investment overnight, but it slowly changes the flow.
In the past two years, versions of the same message have been repeated by investors: “We’re focusing more internationally”; “We’re diversifying outside Norway”; and “Have you considered relocating?”
These are private conversations, but they matter because startups depend on early believers — angels who are willing to take illiquid, asymmetric bets. If those individuals begin to allocate capital elsewhere, the ecosystem doesn’t collapse dramatically. It erodes gradually.
Built through repetition
This is not just about access to capital or experienced operators. It is also about mindset. Building an early-stage company requires a very particular mentality, extreme ambition, comfort with uncertainty and a willingness to pursue something globally competitive long before it looks realistic.
In ecosystems where many successful companies have already been built, that mindset spreads naturally. Founders learn from other founders. Early employees go on to start companies themselves. Investors understand the pace and risk profile of global startups.
Denmark, as well as Norway, simply has less of that. And when you say this out loud, it often makes people uncomfortable. But the reality is that ecosystems are built through repetition. Countries like Sweden, Estonia and the UK have spent decades producing globally successful technology companies. That creates generations of founders, operators and investors who understand what it takes.
Denmark has far fewer of those examples. As a result, we are already behind, not just on capital, but on culture, ambition and the collective understanding of what it takes to build companies at global scale.
That gap matters enormously because talent is not just skills. It is also inspiration and belief. People become founders because they see others succeed. Early employees develop into great operators because they experience high-growth companies from the inside. Investors become better at backing ambitious companies because they have seen the pattern before. Without those examples, ecosystems struggle to develop the momentum needed to compete globally.
This is why policy matters so much. Countries that are currently producing successful technology companies will generate even more experienced builders over the next decade. Their ecosystems will accelerate. Denmark, meanwhile, risks moving in the opposite direction. Once that gap opens, it can take many years to close.
The concern many founders have right now is that Denmark is actively pushing its ecosystem further behind at a moment when other countries are accelerating rapidly. And that could shape the Danish technology landscape for decades to come.
For founders, building a startup already means operating in uncertainty. Regulatory unpredictability adds another layer of friction.
For investors, the signal matters. When the tax framework feels unstable or punitive toward ownership, capital becomes more mobile. And capital today is extremely mobile.
The question isn’t whether Denmark can sustain a wealth tax. It’s whether it wants to optimise for capital mobility, founder confidence and long-term startup density — or accept gradual leakage.
If you want ambitious and diverse companies to be headquartered in Copenhagen and Oslo rather than Stockholm or London, incentives matter.
Norway is now an active case study.
