Entities
Holding company
A holding company is an entity whose purpose is to own other companies or assets rather than to trade itself. Founders use holding structures to separate valuable assets, such as intellectual property, from operating risk, or to sit above several operating businesses.
In plain terms: A company that owns other companies instead of selling anything.
Why it matters
Genuinely useful once there are several businesses or an asset worth insulating from trading risk. Genuinely premature for a first company — it doubles the filing burden and the cost while there is nothing yet to protect.
Read the full guideScaling and fundraising