Latest / Alternative Exit / Alternative Exit #70 | Eleven Years to an Overnight Success | Andreas Jørgensen, Demokratisk Erhverv

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Alternative Exit #70 | Eleven Years to an Overnight Success | Andreas Jørgensen, Demokratisk Erhverv · Alternative Exit

• Andy Farquharson: Hi there, my name is Andy Farkelson and welcome back to the Alternative Exit. So my next guest has been a prior guest on the podcast, not just once, but twice. So Andreas Pintrop Jorgensen first joined the podcast in November in in in 2025 and talking about some exciting developments regarding employee ownership legislation in Denmark. but a lot has changed. It's been a very, very exciting time. Like Andreas Pinstrup Jørgensen: Been a very, very exciting time. It has. Andy Farquharson: Yeah, Denmark's got their own employee ownership legislation. They've launched the country's very own employee ownership association. And they've also conducted the largest ever study comparing the performance between EO firms and their non EO peer non-EO peers in the UK. So momentum and coming out of these momentum is building rapidly. So it's very, very exciting. Andreas, welcome back to the Alternative Actor. Andreas Pinstrup Jørgensen: yeah. Denmark's got their own employee ownership legislation. They've launched the country's very own employee employee ownership association. and they've also conducted the largest ever study comparing the performance between EO firms and their non EO pe mon A EO peers in the UK. So the momentum and coming out of these momentum is building rapidly. so it's very, very exciting. Andreas, welcome back to the alternative exit. Thank so much Andy. I'm I'm so happy to be here. I'd love it if you could just give just give the listeners a bit of a recap of what's happening with regards. Andy Farquharson: mate, I'd love it if you could just give just just give the listeners a bit of a recap of what's been happening with regard to Andreas Pinstrup Jørgensen: to the the momentum that you're experiencing. Andy Farquharson: the the momentum that you're experiencing, 'cause it's super exciting. Andreas Pinstrup Jørgensen: Yeah, yeah, yeah. It's it's really it's quite crazy for me to to be here. I never thought so that the momentum would build so so fast if if we looked like back went backwards just two or three years we were in a situation where we had hardly any employee ownership o owned companies in Denmark. And now fast forward two years we have a new legislation, as you said. We have as you know an association for employee ownership now that is pushing the agenda strongly. so and and a broad political backing. So it's it it's really crazy to be here now. So I was just saying like where we are right now in in Denmark is that we are seeing the first companies actually wanting to to use the the ownership transfer. So we're seeing at least two companies that this year are transferring to employee ownership using the new legislation that is similar and built on the EOT legislation in the UK. at the same time, we are just about to launch a campaign, the first campaign ever in Denmark, that is focused first of all on advisors. this is also part of like earlier study and the experiences in in the UK, that is focusing on the advisors close to the the the owners, and then trying to get to the owners and actually push the agenda. So the first take ups we've seen now has been only from you know. targeted we've talked with a few people, networks, people that heard about the legislation. So this is really encouraging that we are seeing already the first two and we know a third that is that is ready to do the transfer and then we know of five seven other companies that are like wow this is this is extremely exciting we want to do this so there's really something happening actually now this the eighth of of of October next week we are throwing this we're doing this seminar on also the The current report that just came out a few weeks ago, where we're talking about well, what are the experiences for especially focused on advisors in Denmark? What are the experiences with employee ownership? How can you use this current legislation to to to help owners transfer to employee ownership? And we have had like I've never experienced anything like it, Andy. So I I've thrown a lot of seminars before, but within two weeks we had 120 people signing up to participate. And these are, you know, all over from the professional environment of of business advisors. And Denmark is a relatively small country here. So this is huge. Andy Farquharson: Yep. Yeah, I look that's so exciting. and and it's it's it's just so good here. I mean it's not only is it great to hear for for all the bit the the business owners in in Denmark, but it's also great to sort of see that you're getting such a great reaction. It's like a it's like you've been sort of eleven years waiting for this overnight success, Andreas. So now it's all happening at once. Andreas Pinstrup Jørgensen: Yeah, I that's so exciting. and and it's it it's just so good here. I mean it's not only is it great to hear for for all the different business owners in in Denmark, but it's also great to sort of see that you're getting such a great reaction. It's like a it's like you've been sort of eleven years waiting for this overnight success, Andreas. yeah, no Definitely. And and I think in that way we have a perfect storm here in Denmark and and we're very lucky. I think often you can say like, there's some people that did a lot of effort and and and was successful with this, but there's also just a lot of s stars, you know, that that align right now. so we have the political level. Broadly speaking, are just, you know, they're on. They see this a huge issue, problem with the the forty thousand b small and medium sized businesses that are transferring within the next five to seven years. we don't really have good, you know, tools to do it with. We suddenly got a new legislation. We have a situation where the trade unions that are very strong in Scandinavia are aligned. and wants to push this and wants to be part of this because we have legislation that thinks you know about the employee the employee level that the and you know the the benefits that accrue to the employees. and that's a bit different from competitive like no in some instances un I mean unions could be competitive. I mean why why do they need a union if they're the audit? Andy Farquharson: Don't don't don't don't say they see that as competitive. Like no, in because in some instances un I mean, unions could be competitive. I mean, why why do they need a union if they're the owners? Andreas Pinstrup Jørgensen: yeah, yeah, sure. So so what we're they're thinking, so we're also in a situation in Denmark where the unions have been very skeptical about like employee ownership before, but they're also in a in a situation where they want to rethink they're seeing like falling organizational levels, rates, and they want to rethink how they're doing things, what is the extra value that they can contribute with to the employees. So of course there has been historically an idea about like, this is a competition. this is a problem for the unions. But actually now we've seen like a shift, especially just within the last year, where one year, one and a half year. So they've been very close to the political process of developing the legislation. And now they're seeing it as a as we also know from the international studies in the in the area and as experiences is that like when the unions are part of the transfer, the transfer goes much better and the owners, if they're unionized you know the the business will actually and the the problems and issues surrounding it will will be ameliorated. So it's a very good idea to actually be unionized in this sense. And what they can also see of course is a development that is happening and they wanting to be a part of it and making sure that you know benefits accrue to employees and not just to you know the the owner seller in this sense. and then they're in the situation they're saying, whoa But they're also still saying, What are we doing? What about the conflicts that will arise? We have no tools for this. They're positive but also puzzled in a way. So we're really trying to work with this. Okay. Super exciting to get another body, especially a very influential body. yeah. Very much. Very much so. You've obviously been talking about this problem. yeah. You've had this mission for for over sort of ten or eleven years. Andy Farquharson: Yeah. Okay. look, super exciting to to to get another body, especially a very influential body, to to come in and support this. I mean, but you mean you've obviously been talking about this for a long time in Denmark. I mean I joked about you've been the overnight success, but as you said, you've been you've had this mission for for over sort of ten or eleven years. I mean, this so you've been driving this. Like what and like obviously a a a huge point was this sort of change of legislation or introduction of legislation which happened. Was it January first this year? Andreas Pinstrup Jørgensen: like obviously a a a huge point was this sort of change of legislation or introduction of legislation that's happening was it's January first this year. Yeah. but what do you think what what what was the biggest catalyst for this huge amount of momentum? Like was it just that legislation or was it sort of a culmination of factors? Andy Farquharson: but what do you think were w what was the biggest catalyst for this huge amount of momentum? Like was it just that legislation or was it sort of a culmination of factors? Andreas Pinstrup Jørgensen: So so this year is definitely a combination of factors. So if we go two years back, I would say that definitely the UK experience, if it hadn't been there, if it hadn't been well documented if you you hadn't you know in the UK if they hadn't like had that experience, positive experience with this being a tool and a lot of people using it, it would have been hard to push business authority, ministry of of business in politicians in this in in this direction. So definitely like the international experiences had a lot of importance. Then at the same time, we succeeded in the think tank that that I I I I was part of four founding seven eight years back. and the of course the the book that I published it's it's just called employee ownership more or less or co-ownership so that that that kind of like built an among politicians especially an awareness that this was an interesting new thing and of course we have this history in Denmark with the cooperative movement that is very strong. So those things were there a few years ago and kind of like built this it it the the the window of opportunity a possibility of actually act of action of one way or another and then the crazy thing was that we worked on a legislation and then the legislation went into force the first of January and by coincidence we ensured a lot of external funding from altruistic foundations To build this association of employee ownership, like center of employee Andy Farquharson: Okay. Andreas Pinstrup Jørgensen: ownership that we're having, so that that could go into force also in the start of this new year, where we have Andy Farquharson: Mm-hmm. Andreas Pinstrup Jørgensen: th three or four people working full time on you know pushing employee ownership agenda and actually p creating the advisory circuit. And at the same time, we got founding from the business Danish Business Authority to do like the most comprehensive report. And maybe we should talk about that in in in a few seconds, that looked into what are the experiences in the UK, how you know, how would we implement employee ownership in Denmark? And what are the you know concrete or economic realities of the business transfer? So we just like this this this major study just was just finished a few weeks ago and and showed you know like very promising results. So this kind of like all of this These effects kind of like combined this year and kind of like made a a strong push towards people actually or employee o owners actually using the legislation. Yeah, super exciting. Now I I I think that digging into that data is gonna be really, really helpful. Yeah. Okay. and I but I know that there is a lot of differences. Just so we can understand, it'd be great if you could just sort of explain it to the listeners. Andy Farquharson: Yeah, super exciting. Now, I I think that digging into that data is going to be really, really helpful. But before we do that, like you mentioned that your the legislation you've got is EOT-like. Okay. And I but I know that there is a lot of differences. I mean, just so we could understand, it'd be great if you could just sort of explain to the to the listeners what Andreas Pinstrup Jørgensen: What is the the Danish model and how does it compare or differ from the EOT in the UK, which people there are probably a lot more familiar with? Andy Farquharson: is the the Danish model and and and how does it compare or or differ from the EOT in the UK, which people there are probably a lot more familiar with. Andreas Pinstrup Jørgensen: Yeah. Yeah, so maybe we should call it's like maybe we we'll we'll call it EOD or just EO as we call it here. Andy Farquharson: Yeah. Andreas Pinstrup Jørgensen: Employee ownership Denmark, like the Danish model. So it's not a trust model. And that may be the first thing. It's actually an association. So an employee ownership association that you're creating that has the ownership and that means that it's democratically founded. So the employee owners they will more or less directly own and control the company, which is different from the trust in the UK. That's one thing. So d they d so they would directly the company that they want so it's not indirect ownership. No indirect ownership and eight. Andy Farquharson: So d they do so they would directly and control the company that they're working in. So it's not indirect ownership like the Slovenian eShop model. Okay, so it's direct ownership. Andreas Pinstrup Jørgensen: No, it's direct ownership. And that was a very important cardinal point actually from the unions, but also I believe from the research that we have in the area, like that says so you actually have to have not only the ownership stake, but also the involvement, the controlling asset to is strengthen or enhancing like co-leadership, the the the positive effects. So making sure that the ownership is directly combined with like practice of possibility of the employees leading controlling the company has been and and creating this sense of ownership has been important. And so and and and and we have that here in this model. Of course that can create other issues or can be maybe create a little bit more difficulty in in in in making the transfer. as as you have to have the employees they have to accept in a in a different way than in the UK. accept to buy the company. they need to be engaged Andy Farquharson: they prior to the actual sale. Andreas Pinstrup Jørgensen: from the from from the beginning. So that's a big difference. The other big difference of course is the tax incentive. so it's not as strong as it is in the UK. You don't you don't they don't just void the taxes but the taxes are paid are First of all, they're they're compar before it was very hard actually. So it has to be understood in like in context of Denmark. Before it was much more expensive to sell the companies to the employees. Today yeah, Andy Farquharson: Really? Andreas Pinstrup Jørgensen: yeah, yeah, it was more it was more expensive. You had you were taxed twice. so but but in this now they are comparable to and perhaps even a little bit more attractive than selling to you know your family or to a capital foundation. So it Andy Farquharson: Okay. Andreas Pinstrup Jørgensen: so we sort of like took it up at a level. We still would like the the tax incentives that you have in the UK. We were very afraid that it wouldn't happen, that people wouldn't want to use this model because the tax incentives were not strong enough. But reality so far are are showing otherwise. that we have actually seen several there are several companies that are trying to do it. And one company is already like in in these minutes we're talking is is is using the the digitation for the first time. so so and of course we don't know about scaling. Maybe the scaling won't be as fast. if you could just give like a percentage like comparison between what would a sale to like to the EOD, like what type of what percentage of of of the sale would go to would would be taxed to an EOD versus to Andy Farquharson: percentage, like comparison between what would a sale to like to the EOD, like what type of what percentage of of of the sale would go to would would be taxed to an EOD versus to any any other type of a normal transaction to like a a trade sale or another third party. Andreas Pinstrup Jørgensen: any any other type of a normal transaction to like a a trade sale or another part. No, so in Denmark now they will actually just be equalized. So you don't get like you don't actually get there's not a direct transvention. No, no. But Andy Farquharson: Okay. Right. No preferential treatment. Yep. Andreas Pinstrup Jørgensen: there is for the the owner. So the owner can now before they would be taxed when they sold their company but now they transfer the tax to the vehicle, the EO vehicle, the EOD. So that's the that's the biggest difference. And then the second difference is that the EOD does not have to pay the tax immediately. They can pay it over a Andy Farquharson: Okay. Andreas Pinstrup Jørgensen: long time. So they can actually they don't have to pay the taxes before the that like the p the pa back payment of taxes depends on the surplus of the company. So it actually depends on how you know if the company is not doing well they actually don't have to pay off the the Andy Farquharson: Nice. Andreas Pinstrup Jørgensen: the taxes for a long time, but then if it does well, they have to pay something off. and they have to pay the entire but but they but still they have a possibility of you know giving employees some of the surplus before paying off the taxes over a period of time. I love that flexibility. Andy Farquharson: I love that flexibility. I mean, that's like I guess that sort of solves a lot of the constraints we see in some other employee ownership models. Like I mean, say like there's like the repurchase obligation in the in the US ESOP can be quite onerous on a company where they've got to sort of go do some like take on some debt to be able to support their payments. we do see some even in some EOT transactions where owners they're they may be doing a deferred consideration or funding the sale themselves. Andreas Pinstrup Jørgensen: be quite onerous on a company where you gotta sort of go do some like take on some debt to be able to support their payments. Yeah. we do see some even in some EOT transactions where owners they're they may be doing a referred consideration or funding the sale themselves, Andy Farquharson: But they put too much of a risk onto the company. so yeah, it's great that you've built that flexibility to be able to take care of the unknown future, Andreas Pinstrup Jørgensen: but they put too much of a risk onto the company. Yeah. exactly so yeah, it's great that you've built that flexibility to be able to take care of the unknown future. Andy Farquharson: and take that into account. Andreas Pinstrup Jørgensen: And and and very and in a very important part of vi which i can seem a little bit crazy to us maybe is that before it was you know, it was not lawful or you would be taxed to hell if you wanted to give part of the company as a gift to the employees. And it's just more than two weeks ago I met with a an owner of a company with fifty engineers that had created his own employee ownership model in Denmark. and he was like, I just wanted to gift, you know, I didn't have a family, I wanted to gift my company to the employees, you know. Yeah. Nothing just like that. But I couldn't. My you know, my advisors said I couldn't and the law would not require that I had to pay a lot of taxes and the employees had to pay a lot of taxes. But that, you know, today that gift level, now it's possible to just, you know, for an employee owner or a im owner that wants to give part of the company to the employees, he can give it without being taxed and the employees without being to taxed to unre recognizable level. So that's also like very important. Andy Farquharson: Yeah, awesome. Like I think that that again, that context is amazing. Thank you. and help having people sort of understand that model is is is great. turn the lens to to talk about some of the data that you found from from from this study that you create that you conducted on the UK market. you you mentioned it's it's the largest ever study. I mean, could you just talk us through what what was the scale of the study? Andreas Pinstrup Jørgensen: Yeah, awesome. Like I think that that again that context is amazing. Thank you. and help having people sort of understand that model is is is let's turn the lens to to talk about some of the data that you found from from from this study that you create that you conducted on the UK market. you you mentioned it's it's the largest ever study. I mean, could you just talk us through I mean what what what was the scale? So so actually we it was a great collaboration with the White Rose Center in in in the UK. the several like prominent UK personalities, Graeme Noddle, Campbell, you know you probably know several of them also. and then and then the University of Copenhagen or Copenhagen Business School, like a University of Copenhagen Business School. so it's where So so what we went into was really like could we get the data? Nobody had really got access to the data, and that was really the Wild Rose Center that accepted that we kind of like could work with it. That was really a big thanks to them. so the scale of this is like we know that there's about two to three thousand, two hundred two thousand eight hundred, three thousand EOTs in the UK now that has actually gone through the transfer. So we could look at the tenth of those, so two hundred and eighteen. We've looked into and we and we compared. compaired them with 330 management buyout companies. And then we compared them and tried to make the statistically like try to find companies that would that would be as representative of the employee ownership transfers as possible looking into the management management buyment buyout transfers so we could actually it it was it was more as as an from an economic standpoint A causality study than compared to most of the studies that have been do done in this area, which are statistical inference. So in that way, it's much more, at least let's see, it's coming out in an article hopefully later this year. but it's the the design of it is much more robust than a lot of the studies we have so far. And it's also the by far the largest on of of you know full employee ownership transfers that has been done so far. And that's really really interesting. so and we were what you could be worried about, of course, is like, okay, maybe we can see the employee ownership actually is it good, you know, can get enhanced performance, but we didn't necessarily always know if it was better than other transfers. so we looked into so what is the performance, what our expectations there? We expect that they can they can perhaps perform a little bit more, but the problem is would it be on you know, would that take away from the the company's a ability to still invest? to pay out decent wages to employees would you know so that was really like a a concern here. So we did the study and it was really, you know, a consistent picture that when businesses are transferred to EOTs, then they achieve higher productivity, about five percent percentage point higher than than management buyout similar management buyouts do we saw that the revenue growth rate rate was eight percent higher for employee ownership Andy Farquharson: Wow. Andreas Pinstrup Jørgensen: employee owned trusts and then if we saw and that was extremely interesting right that that the payout the the payroll per employee was six thousand three hundred pounds higher per employee than they were in management bar. So just Andy Farquharson: That's just from the payroll, not in not including the profit distribution. Andreas Pinstrup Jørgensen: so it was part no so this is part of the profit distribution but that was done through the that is normally not always but done it through the payroll yeah this profit distribution of them so and and what is what is really interesting is that it was not, you know, the investments of the company was at the same on par with the management buyouts, and the Andy Farquharson: Okay. Andreas Pinstrup Jørgensen: Ebda margin was on par with the management buyouts. so you actually saw that they were able to both pay out the loan at the same time, give a higher wage to the employees or share in the surplus. so the benefits really seemed already. at least in this study to accrue to the employees. And of course this the this this is very optimistic and positive and it's taken very well in the Danish legislation legislative environment. I also know that just came out a big study of the ESOPs in the UK that is that looks into something something similar here and has similar results. the the interesting thing I of course for us is that the EOT is much more similar to the Danish version than than the ESOP version is and and that this actually goes down into depth and compares companies into detail so that that we don't just have like this this meta study of of of of of a lot of companies. So that's really that's really huge for us that we can see that actually the EOTs is not just something that's a critique we've seen he heard here in in Denmark, but also that we heard in the UK that are these comp is it just Good for the seller because the seller in the UK really, you know, this is really attractive, has been really, really attractive until the last year at least, to sell to the employees. Andy Farquharson: Yeah, I mean, yeah, and just just for context, like just for for the audience, I mean previously, like if you sold to an EOT in the UK, you would get a hundred percent discount on your capital gains. which was the most generous tax incentive sort of anywhere in the world, I think. But now, the yeah, due to those sort of recent budget changes, it's now a fifty percent discount. Still the most generous, I think, in the world. it's up there with the Canadians as well. So yeah, it's a it's a very sort of Andreas Pinstrup Jørgensen: which was the most generous tax incentive sort of anywhere in the world. But now the yeah, due to the recent budget changes, it's now a fifty percent discount. Yes. The most generous, I think. Yeah, yeah, yeah. for sure. up there with the Canadians as well. So yeah, it's a it's a very sort of yeah, it's it is a huge Andy Farquharson: Yeah, it's a it is a huge incentive. Andreas Pinstrup Jørgensen: one of the reasons why the UK did talk about did introduce that incentive was to help grow the model and and help sort of g engage the advisor network. Now this is something I'll get we'll get onto that shortly 'cause I'd love to hear the story about how you guys are looking to grow the model. But before we do that, if you think about that research study, I mean what was what was the most surprising figure that came Andy Farquharson: why the UK did talk about, did introduce that incentive was to help grow the model and and help sort of engage the advisor network. Now, this is something I'll get we'll get onto that shortly, because I'd love to hear the story about how you guys are looking to grow the model. But before we do that, if you think about that research study, I mean, what was what was the most surprising figure that came out of that? Andreas Pinstrup Jørgensen: out of So f for me it was definitely that they were at the same time during the transfer b because we also did this over years. Maybe that was just one year that was better than the others, and maybe so the but we but but we saw that you know that the the the the gains in the company still on a relatively short term perspective accrued to the employees. That their salaries were higher, they actually did get you know, surplus contributions or distributions. so this part compared with the company still being able to service their debt and paying off the loan and having the same investments. So that was big we we we we we we were like expecting that they would probably be a little bit more productive, not not to a crazy amount, but s solidly, but that they were still able to invest as much was was quite surprising and that the employees could actually see benefits so early on because this study of course, like well, we've only had those from from 2014. We didn't see a lot in the UK. So it's it it wasn't before eighteen, nineteen that you saw the the the big bulge of of new employee ownership trusts. So it's still, you know, relatively early. So you could you could imagine that it would be like so the payroll It's about the same, you know, they wouldn't get much more. the employees they had to pay off services debt, they would have to invest in the company to be profitable. But it seems that they were actually, you know, hitting, as we say in Denmark, several flies with one stroke. And that's that's impressive. That's really impressive. Is this Andy Farquharson: Yeah, fantastic. Yeah, very impressive. So when you think about that, w one of the biggest fears you hear from a lot of advisors, say in the UK, is that and and and and in and other models, is that the re per the repayment obligations, whether that be for for for private debt or the stop that level of investment. Andreas Pinstrup Jørgensen: One of the biggest fears you hear from a lot of advisors in the UK is is that and and and in and other models, is that the re per the repayment obligation, whether that's all for for private debt or stop that level of investment. Yeah. very interesting. So like did was your research did it sort of take into account Andy Farquharson: but it was interesting. So like did was your research did it sort of take into account whether they were still paying off their like their their obligation or that was sort of past their financial freedom day and had like zero days? Andreas Pinstrup Jørgensen: whether that was still paying off their like their their obligation or that was sort of passed their financial freedom back. No, no yeah, yeah, yeah. Yeah no no it's i it's taking into account so they're not as most of them are not passed some of them are passed Andy Farquharson: wow, okay. Andreas Pinstrup Jørgensen: so it's it's so so so that's really the of of course this is a statistical average of the two hundred eighty companies. So I cannot say like on on a company level it I wouldn't be able to say But on on average, they really were able to service that debt and still have high investment rates compared to management buyouts. Yeah. Okay, well th that that's exciting. I mean that sort of goes into the hypothesis that I've always had is is that people with when people are owning these companies individually, a lot of them are sort of hyper growth business. So these owners Andy Farquharson: Yeah. Okay. Well the that that's exciting. I mean that sort of goes with the hypothesis that I've always had is is that people with when people are owning these companies individually, a lot of them aren't sort of hyper growth businesses. So these owners are are just taking that money off the table for themselves, like just paying themselves out in dividends instead of sort of re really in reinvesting in for growth anyway. Andreas Pinstrup Jørgensen: Just taking that money off the table for themselves, like they're just paying themselves out in dividends instead of sort of re-real reinvesting in for growth interesting because we always like we've always been talking about so now I'm talking a lot of management buyouts but actually we did the same comparison with like capital foundations are selling it to like equity capital in different ways and we also saw like the like a positive like it would it was almost the same results for the employee owned company than compared to if you sold it to a cap like a some equity equ bigger equity partner. it is extremely interesting that we've always been talking about you know management buyouts, big capital foundations That they would be more efficient and willing to invest more and that, you know, employee ownership, employees that own the company would not be willing to and not be able to invest as much. they would want to get the money in their pocket. But actually, this study shows the opposite. It really shows that the the man if it's the managers that buys it, they would like to get a short-term payout. If it's the capital foundations, the bigger, the the bigger capital partners that buy it. They would like to have a bigger payout and not invest as much as as the employees. Of course, that could be that could be the results. We don't know. It could also just be that the employee ownership is so is is is is so much more productive, at least in the short term, as this study shows, that they can they they can get the gains from there. But but at least it doesn't it doesn't talk to the hypothesis that they would be more efficient or better at allocating capital than the employee ownership. And that's that's surprising. Andy Farquharson: Yeah, yeah, I absolutely I guess that's the part that I love. Like people are actually genuinely allocating the capital towards sort of the gross initiatives rather than their own selfish outcomes. I I think that's the sort of the power of the collectivism who also needs to look after by they're protecting their own payouts. they're protecting their own asset and their own future. Andreas Pinstrup Jørgensen: genuinely allocated capital promotion issues rather than their own selfish outcomes. I I think that's the sort of the power of the collectivism who also needs to look after growth. They're protecting own IA protecting their own asset for the future. And I think of course one important point some might say here also is that that the employee ownership trust and that way it's it can be that it's superior to the Danish way when we talk like the Danish model. Because here you have a trust where at least the employees do not have a majority say in the trust board. there might be Andy Farquharson: Okay. Andreas Pinstrup Jørgensen: one or a few. So we don't know if this trust board might be even more on the long term employees, employee owner side than specific employee owners would be. We don't know this. we don't know if like a direct, more direct as it is in the Danish case, direct democratic ownership. would create less or more of an incentive to get to invest less. We don't actually know this. Andy Farquharson: Yeah. Okay, very cool. Awesome. So all right. You've had obviously amazing news and amazing sort of amazing uptake from from this sort of recent recent legislation. You've got this yeah this landmark study which has provided some really, really encouraging data for employee owned movements globally. I think this is just sort of a really fantastic addition to to some of the great data that's out there. I mean if we think about Andreas Pinstrup Jørgensen: Awesome. So all right. We've had a obviously amazing news and amazing sort of amazing uptake from from the sort of recent recent legislation. You've got this got this landmark study which has provided some really, really encouraging data employee owned movements globally. And I think this is this sort of a really fantastic addition to to some of the great data that's out there. I mean if we think about what it Andy Farquharson: What y you alluded to a little bit earlier about how you've got these upcoming sort of webinars to to talk about these results. What are some of the other things that you're doing to scale the model of employee ownership there in Denmark? Andreas Pinstrup Jørgensen: You alluded to a little bit earlier about how you've got this upcoming sort of webinars to to talk about these results. What are some of the other things that you're doing to scale the model of employee ownership in the market? So part of the th this report we just published was and and I they presented like the first the second part of the report we always finish already finished in February and I talked a little about about results with you earlier. So The results there is really like how does optake how did optake work in the UK? And what we what we found was like we it requires pioneers. It requires the first employee owned transfers that can kind of be poster boys for the new or girls, for the new next next companies and next owners. Then second of all, you have to have this professional ecosystem. You have to build an ecosystem that can advise and then understands and that are interested and knows that this is not just like some crazy idea. and that's what we are working on on our campaign and also this seminar on the the the the eighth of october. and then lastly, we we need to to have this like continuous adaptation between the policy that that was decided and the practical ways of doing things so that we be that we build certain tools for the employ for the imp the owners and for the transfer process so it becomes easier. So those are really the the three points and we are really working hard on educating, helping the advisors, creating knowledge and awareness. but at the same time we're also doing targeted campaigning directly to low-hanging fruits. Owners that have an idea that have contacted us three years, that that that we think could be like interested in doing a transfer so that we have the first pioneers that do this, that can be the future ambassadors of the project. so so so we're actually using a lot of effort and time to make sure that these will be successful and can can be used in communication in the future. And Andy Farquharson: Not Andreas Pinstrup Jørgensen: it's actually already happening because the first is is transferring right now. And they're already part Andy Farquharson: Yeah. Andreas Pinstrup Jørgensen: of several, you know, news broadcasts on the on the issue. So that's really cool. so then we have like the specific work, the going into creating these pioneers. The other one is like educating the business environment, helping the business Andy Farquharson: Yeah. Andreas Pinstrup Jørgensen: the business advisor environment. And then the last is like this pol political leg that we are working with and We see great opportunities right now in Denmark where of course it would I we we believe and talk about it would be a great idea to get tax incentives at least for a shorter period of time in Denmark that looks like the UK example, so we can get those pioneers. that's one thing. The other thing is that we also went to the same Oxford symposium. We know one of the big issues is raising capital. How do we get like a push factor in a way, right? to to let that we can that here you got the money there's not a problem you don't have to worry about taking all the risk as an employee owner because or as an owner because we we also see that most of the companies in the as in the UK we would we would like them to you know font the process themselves and of course we want banks to join but large of the process is like the the owner taking a lot of responsibility and risk in the beginning here and not having a lot of you know tax incentives. So we would like to create so but what we see and we've seen like in Slovenia that they may have had luck with and we believe that that might be actually the easiest, maybe the easiest way of doing policy changes in Denmark is to create like economic guarantees, debt debt guarantees from the government or from government programs that we actually have already in Denmark, but making them targeted employee ownership transfers. And and so those are the two legs that we are working hard on right now. Andy Farquharson: Okay, fantastic. Look that that's awesome to hear. I mean, I I love the the debt debt guarantee is like something on on a on an aligned model over in the US. They've got the sort of the SBA loan, which comes from the small business association focusing on how do we get entrepreneurs to to go and buy these sort of great companies. Like and it's having a huge impact. So having that ex like having that a version of that for employee ownership, I think makes a lot of sense. And it's something I see as being really successful. So, Andreas Pinstrup Jørgensen: That that's awesome to hear. I mean I I love the the debt debt guarantee is like something on on a on an alignment model over in the US they've got the sort of the SPA loan, which starts from the small business association focusing on how do we get entrepreneurs to go and buy these big companies. I think it's having a huge impact. So having that ex like having that a version of that for employee ownership I think makes a lot of sense. I see it as being really successful. So Andy Farquharson: you've got a lot so much going on, you've had a lot of success. I mean, which which again is super exciting for for for those Danish companies who who are facing retirement. But of the biggest lessons that you've learned from introducing employee ownership into Denmark that pioneers in other countries could follow to bring EO to implement EO legislation there? Andreas Pinstrup Jørgensen: what are some of the big biggest lessons that you've learned from introducing employee ownership into Denmark that pioneers in other countries could follow to bring EO and to implement EO legislation there? So I think there is actually a a little bit of a a blind spot when when we're talking by because the Anglo Saxon case is just the strongest as we have internationally now, right? Of course we have employee ownership in in in in Spain with the worker cooperatives. But but with the newer developments, it's really the Anglo-Saxon case that that that kind of like stands the strongest and that most can kind of like reflect themselves in. so so but one huge blind spot there is the unions. Like that most other European countries have a strongly unionized economy. and understanding how do we create a good, you know, business case really for the unions. In wanting to embrace this area, Denmark is one of the most in the world unionized countries. I think we have between 70 and 80 percent Andy Farquharson: wow. Andreas Pinstrup Jørgensen: unionization rate. so if the unions don't want this to happen, it's not gonna happen in a lot of European countries. So we and and we started this talk with unions 10 years ago, really. actually before we founded the think tank. and and you know they really need data, numbers. And I think in this way Denmark can be a perhaps can be a pioneer, as UK was with the EOT, in the in the way of for countries that are very unionized. And I think like that thing about how to yeah, how to comfort the unions, the big pension schemes that they may have in your country, the the consideration of what happens with the bargaining in the on the company level, whether what about the membership and and what about the the benefits accruing to the employees things like that you have to be very clear about it and you have to start this process early on that's that could be almost as impossible as legislation because if you have unions that says no we don't want this in a very highly unionized setting then they may be the the final barrier that will just stop this development. So Andy Farquharson: Okay. Andreas Pinstrup Jørgensen: that that that's definitely one one of the things. And then of course I would I'm it was it was hugely helpful and and I would recommend everybody reading the the report on like what what was the experiences of the uptake in the UK with these the pioneers, the advisors, and fo focusing on continuous adaptation. Building the pioneers, the first ones that can be publicized in a way and that business owners can see themselves in. second, the advisory system, if they battle against this development, it's not gonna happen. you know, we have to have them on your side and they have to understand the benefits for the the owners. and then of course, it's a huge advantage if you have a political judicial framework that that that just makes it easier for the business administrators to kind of like understand what are we gonna do with employee ownership here. But probably the blind spot these are common common knowledge for for most of the professionals in the UK and US other places in Europe the first ones but But this this thing about the unions, for Spain, France, Germany, you know, not least Sweden, Finland, Norway Andy Farquharson: Mm-hmm. Andreas Pinstrup Jørgensen: that are highly unionized, getting getting in contact with the unions early on is is really impossi important. Okay. Very, very cool. Thanks. This is awesome, Andreas as always. Love your energy, love your excitement and and and enthusiasm. And as I said, that's been you're you've been pushing this, th th this boulder uphill for Andy Farquharson: Okay. Very, very cool. Mate, this is awesome. Andreas, as always, love your energy, love your excitement and and and enthusiasm. And as I said, it's been you've you've been pushing this, the this boulder uphill for for for ten years. And it's great to see that you've finally got some downhill momentum and things are really, really growing. but before I let you go, I have asked you before, things have changed, things are evolved, but I want to finish off with Andreas Pinstrup Jørgensen: But for ten years and it's great to see that you finally got some downhill momentum and things are really, really growing. but before I let you go. I I have asked you before, things have changed, things are evolved, but I want to finish off with the the fast round of employee ownership? Andy Farquharson: The fast round of questions. ownership? Andreas Pinstrup Jørgensen: I must say still Graham Nodel. It's incredible Andy Farquharson: Yeah. Andreas Pinstrup Jørgensen: he's just still keeps going. Yeah, yeah, absolutely. He's he is Andy Farquharson: Yeah, yeah, absolutely. His he is an absolute phenomenon. what is your favorite resource on employee ownership? Andreas Pinstrup Jørgensen: Absolute phenomenal. what is your favorite resource on employee ownership? I would point to two people actually like a Andrew Pettleton's work has been Andy Farquharson: Okay. Andreas Pinstrup Jørgensen: you know really remarkable. really really loved that and followed that. but then then also, I was extremely inspired by it was the citizens' share. in the in the US, written by Richard Freeman, Joseph Blasi and Douglas Kruse. and that was really like they tried to make a easily accessible description of what we know on employee ownership and I think it's probably the best popular description on employee ownership in the in in English I have read at least. Okay, awesome. Well you're staying really, really consistent on your last Andy Farquharson: Okay, awesome. Well look, you're staying really, really consistent on your last on the last time I've asked you these 'cause Graham Nuttall was there, citizen share was there. So that's cool. but then lastly, okay, so what would you say to a business owner who's sitting on the fence regarding a transition to employee ownership? Andreas Pinstrup Jørgensen: Then okay, so what would you say to a business owner who's sitting on the fence regarding a transition to employee ownership? yeah. So if if you want to maintain the heritage of your business, what is the best way of continuing the culture, the ideas, the dream you had? We are probably in a situation where there's only really one ownership structure that for sure will that has the high percentage of ensuring that you will that these things will be carried on and that is employee ownership. it may not always be the easiest way, but it's the most, you know, it's it's the most purposeful way. Andy Farquharson: Okay. I love it. Andreas, where can people go if they want to follow you or they want to reach out and ask a little bit more about the about the Danish model or follow the momentum, the association. Andreas Pinstrup Jørgensen: Where can people go if they want to follow you or they wanna reach out to ask a little bit more about the about the Danish model or follow the momentum, the association? Yeah, sure. so if they they you can always go to to LinkedIn and and follow me there and write me there. you can also go to the th think tank of democratic businesses, we are called it's a difficult name, Tinketanken Democratisk avail. Or then you go to now our new association of employee ownership that works tirelessly day and night. please write and and contact us there. we will definitely get back to you if it strengthens the development of new employee ownerships in the world. Andy Farquharson: Very cool. Andreas, thank you for joining us here on the alternative exit again. Andreas Pinstrup Jørgensen: Thank you for joining us here on the alternative exit again. Thank you so much, Andy, for your you know, incredible work on distributing and connecting people in this area. It's just it's so valuable. It's absolutely pleasure. Thanks, mate. Speak Andy Farquharson: Mate, it's an absolute pleasure. Thanks, mate. Speak soon. Andreas Pinstrup Jørgensen: soon. Thank you. See you.