The decline in funding for African startups might seem discouraging, but it has triggered a necessary shift in how businesses are built.
Rather than fixating solely on securing capital, founders and investors are now compelled to focus on other fundamental aspects of running a business — elements often sidelined when money flows freely.
As funding becomes more scarce, it’s clear that capital alone doesn’t sustain a business. The “move fast and break things” mentality was a hallmark of startup culture for a long time.
Founders were encouraged to prioritise growth over all else, sometimes at the expense of sound business practices. But as the tide has turned, the cracks in this approach are now evident.
Failed and struggling startups have revealed a common trend: many of them neglected critical aspects of company building. These often included areas such as corporate governance, legal compliance, intellectual property protection, and establishing internal frameworks to support sustainable growth.
With increased scrutiny from investors, startup founders are learning — sometimes the hard way — that a solid legal foundation is just as crucial as a winning product or a strong team.
Furthermore, for African startups that often operate in unclear regulatory environments, the need for proper legal guidance is assuming increased importance. This is why legal advice tailored to the unique circumstances faced by startups is no longer a luxury but a necessity, as it could save startups from making costly legal mistakes.
As if on cue, a handful of legal firms have sprung up in the last couple of years to serve startups. One such firm is Edoigiawerie and Company, founded by Omoruyi Edoigiawerie, a corporate lawyer with over 15 years of experience.
Helping Nigerian startups navigate legal hurdles
EandC’s legal practice focuses on technology-enabled businesses and creatives, with the bulk of its work related to startups. According to Edoigiawerie, the firm works with startups across all stages of development.
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“I always say that as startup lawyers, you are primarily babysitting because beyond the structure, beyond the legal advisory, you’re helping them navigate a road that they have never gone on before."
It works with potential founders to refine their ideas, create a structure, and build protective mechanisms for their intellectual property, something Edoigiawerie takes great pride in. It also helps them determine whether a solo founder route is the best option.
It also helps with building a corporate structure around the business. At this stage, it helps founders get the relevant regulatory approvals and formalise relevant partnerships.
Now in its third year of operation, it has a staff strength of 16 across full-time and consulting roles and has worked with over 100 startups.
Due to the nature of the businesses it works with, the law firm prioritises flexibility. For example, knowing that many startups cannot afford to place the firm on a retainer, it uses flexible arrangements that allow them to pay for one-off services.
Startups are also kept in the loop when the firm handles any brief, enabling transparency. It also takes what is learnt from startups by infusing technology into its practice.
Stumbling into the legal practice
A frequent fixture at startup-focused events across Africa, Edoigiawerie, a graduate of the University of Lagos and a published author, stumbled into the legal practice.
“I don't have a brain for science; it was just the only practical course I could do in the humanities. My mom believed very strongly in the professional course route that when you go to study, you must study a professional course, so it was a no-brainer since I was in the humanities,” he shares with a laugh.
As a student, he took in internships at various law firms during the holidays, including spells at Gani Adetola-Kazeem Legal Practice (previously Gani Adetola-Kazeem & Co) and the law chambers of civil rights lawyer Abdul-Ganiyu "Gani" Fawehinmi.
After law school, he spent a year at Abdullahi Ibrahim & Co., which he credits with reinforcing the value of a strong work ethic. While at Abdullahi Ibrahim & Co., he attempted to join the banking industry, but when that didn’t pan out, he joined Empretec Nigeria Foundation as a legal associate, where his training in working with entrepreneurs began.
Empretec Nigeria Foundation ran capacity-building workshops for entrepreneurs and, just before he joined, renewed a partnership with the United Nations Conference on Trade and Development (UNCTAD).
As a legal associate and later group legal counsel, he delivered these workshops across Nigeria, training over 500 business owners on legal structures and intellectual property. By 2021, he began considering starting a law firm and ultimately settled on serving startups, as much of his personal development had been on understanding technology.
Boardstrapping and building the right structures
Compared to traditional businesses and large corporations, startups prioritise agility. This often shows up in a neglect of proper corporate governance structures. Many founders hope that proper structures will be set up as the business matures.
Edoigiawerie, however, argues that setting up structures should be done earlier, noting that startups do not need elaborate structures. Using a term he calls board strapping, he advises that startup founders look within their network to identify experienced professionals who can provide guidance until they grow to the point where they can add more experienced individuals.
To pay or not to pay?
As artificial intelligence grows in relevance and accuracy, more conversations are being had about its impact on professional services. Today, business owners can download legal draft templates from the Internet and modify them for their unique circumstances. But Edoigiawerie cautions against depending on generic templates to navigate business relationships.
Although these templates may get the job done, they can leave a bitter taste in the mouths of founders. He argues that business agreements really come to life when the parties involved begin implementation, as this phase often reveals conflicts.
“What I have been learning and doing for the past 15 years is what gives me an edge to advise them better,” he says, adding that the value of a legal professional is providing relevant context for startups.
Edoigiawerie notes that lawyers working with startups often have to do work that falls outside the scope of regular legal engagement.
“The technology and innovation ecosystem where startups thrive is one where you can only benefit your clients when you understand the ecosystem and how it operates. So if you sit down and you are a textbook lawyer with all the intelligence and knowledge that the law gives you, you probably will not be able to adequately advise your clients because you don't understand their language. You don't understand the ecosystem.”
Challenges startups face when navigating legal requirements
Edoigiawerie shares that one of the major challenges startups face from a legal perspective is the knowledge gap regarding regulatory requirements. Whereas some countries have a detailed knowledge base that any business owner can consult when making decisions, that is rarely the case in Nigeria.
“In saner climes, everybody must have an idea as to what the regulation is with respect to any field that you intend to play in. Here, there’s so much fragmented information, and so what you have are startups who are second-guessing the regulation, and they get in and get fined or incur a liability, and that stunts their growth.”
Another significant challenge that startups face is dealing with regulators who may not fully understand the realities of the startup ecosystem.
In many cases, regulations are crafted with traditional industries in mind. These industries often have established processes that regulators are accustomed to. Startups, however, operate in fast-paced environments and frequently find themselves trying to fit their businesses into legal frameworks that were never designed for them.
“Technology and innovation are fast evolving, and anything that grows with so much speed will make any reasonable person wary. That wariness also breeds distrust, which continues to widen the gap that should ideally be closed,” he notes.
Providing tailored legal services for startups
Starting a law firm is hardly a novel idea in Nigeria. The first indigenous law firm in Nigeria — Thomas, Williams and Kayode — was founded in 1948, after all. But building a law practice for startups? That is novel!
With the creation of startups unlikely to stop soon, it is crucial that potential lawyers in the country receive appropriate legal training. Edoigiawerie notes that the country’s legal education curriculum is not suited to the peculiarities of startups and calls for an overhaul of legal education in the country.
Until that happens, Edoigiawerie and Company encourages young lawyers to consider gaining experience in startup law through internships.
He argues that waiting until they finish law school could see them develop a fixed view of the legal profession and be unwilling to try new things. To help with that, the firm is developing programmes to guide students in choosing the appropriate courses that prepare them for a career working with startups.
