Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands' intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award winning writer.
He could be contacted at udohrapulu@gmail.com
Ghana’s 2024 budget and economic statement reveal a strategic move to bolster the nation’s entrepreneurial landscape. The Venture Capital Trust Fund (VCTF) is set to commit $14 million into local venture capital funds.
This development follows the noteworthy success of the VCTF in leading the Initial Close of the maiden fund for the Mirepa Capital SME Fund I (MCSFI) last year. Managed by Mirepa Investment Advisors Ltd., an authorized investment advisor with a robust capital base of GHS 120 million ($10.5M), the MCSFI aims to bridge the funding gap for Ghanaian small and medium-sized enterprises (SMEs) within the GHS 2.4M to GHS 24M ($200K — $2M) range, providing crucial patient capital support.
President Nana Addo Dankwa Akufo-Addo.
Focusing primarily on sectors such as light manufacturing, technology, and cleantech ventures, the MCSFI has its sights set on businesses within agribusiness/agroprocessing, education, healthcare, financial services, and business services sectors, including industrial and mining support. This noteworthy achievement establishes the fund as the second in Ghana to be anchored solely by local investors, led by the VCTF and prominent pension funds, following the precedent set by Injaro’s IGVCF fund.
In a further strategic move, the Venture Capital Trust Fund has also invested in Injaro Investments, an Africa-focused private equity and private credit fund manager. Injaro recently announced the launch of its third fund, totaling USD20 million and backed by local pension funds — a groundbreaking development for Ghana. Jerry Parkes, CEO of Injaro Investments, stated that the fund is designed to support mission-focused SMEs.
Cumulatively, 2023 witnessed the Venture Capital Trust Fund committing $16 million to various initiatives, including the Injaro Investments Limited Ghana Venture Fund, Industrial Support Fund, Mirepa Capital Ltd SME Fund, and Wangara Green Ventures. This strategic allocation underscores Ghana’s commitment to fostering a vibrant entrepreneurial ecosystem and supporting businesses across diverse sectors.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
Fawry has successfully concluded an extensive investigation and analysis of its cybersecurity infrastructure in response to recent speculation regarding a potential breach by the ransomware attacker, LockBit.
To address the incident, Fawry enlisted the expertise of Group-IB, a renowned cybersecurity technology creator specializing in the prevention, investigation, and combatting of digital crime. The need for investigation arose when LockBit published a data sample on its dedicated leak site on November 8th, claiming it was obtained during a breach of Fawry’s infrastructure.
As of November 24, Group-IB’s Digital Forensics and Incident Response (DFIR) team has definitively confirmed that Fawry’s production segment, which encompasses the live environment hosting myfawry, banking applications, Acceptance, Retail, and Fawry Plus, remained unaffected by the LockBit ransomware attack and experienced no breach.
This confirmation aligns with Fawry’s initial announcement on November 10, asserting that its live production environment had not been compromised, and no banking or card data had been illicitly accessed or exfiltrated.
However, the investigation revealed that an isolated section of Fawry’s testing environment, designed for modeling and trialing changes to the platform and entirely separate from the production environment, had been subject to a prior attack. This attack successfully encrypted certain files and purportedly exfiltrated data.
Fawry maintains confidence that this compromised data will not impact financial transactions on its platform. Nevertheless, the company acknowledges the possibility that it may include personal details of certain customers whose information was present on the testing platform as part of system migration projects. This information encompasses contact details such as addresses and phone numbers, along with customers’ dates of birth. While these details do not pose a security risk to financial transactions, Fawry advises concerned customers to seek guidance on the Fawry.com website or by contacting the Fawry customer care center.
Group-IB has further implemented its proprietary advanced monitoring technology solution across 100% of Fawry’s server infrastructure. Both the production and testing environments have been confirmed as clean as of November 24, with no presence of LockBit. The Fawry team has executed a 100% eradication of observed LockBit code indicators, and Group-IB experts have verified the successful completion of the network cleanup.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
Saviu Ventures, a prolific Venture Capital firm in Francophone Africa, recently marked a significant milestone with the first close of its second fund, Saviu II, securing EUR 12 million in funding. Below, we explore how Saviu Ventures plans to deploy these new funds in African startups.
Historical Background and Expertise:
Saviu Ventures, founded in 2018, has established itself as a key player in the Francophone Africa Venture Capital landscape. Led by experienced entrepreneurs Benoit Delestre, Samuel Touboul, and Cynthia Mandjek, the team brings over 15 years of entrepreneurial experience, a decade of Venture Capital and Private Equity expertise, and backgrounds in renowned firms like Eurazeo and Orange Ventures.
Benoit Delestre, managing partner
Saviu II Fundamentals:
Fund Size: EUR 12 million.
Investor Base: Private investors, including European and African entrepreneurs, high-net-worth individuals (HNWI), and Family Offices.
Investment Focus: Early-stage startups from Seed to Series A, with a strong emphasis on Francophone Africa.
Sector Agnosticism with a Focus:
Saviu’s Sectors of Interest: Tech or Tech-enabled companies in Fintech, Healthtech, Edtech, ClimateTech, and E-commerce.
Investment Range: EUR 500k to EUR 3.0m per startup.
Hands-On Approach:
Operational DNA: Saviu Ventures follows a hands-on approach, avoiding the “Spray and Pray” philosophy. The team provides comprehensive support, including business development, recruitment, international expansion, and fundraising.
Proven Track Record:
Successful Portfolio: Saviu I, the predecessor fund, invested in 12 startups, primarily in Francophone Africa, with notable success stories such as Anka, Julaya, Zanifu, Lapaire, and Paps.
Key Holdings: Saviu maintains significant shareholdings in successful companies like Anka (20%), Julaya (board seat), Zanifu (15%), Lapaire (22%), and Paps (reference minority shareholder).
Regulatory Approval and Independence:
Milestone: Saviu II and its management company secured a License from the Mauritius Financial Markets Authority (FSC).
Significance: This positions Saviu Ventures as one of the few fully independent and regulated Venture Capital Fund management entities in the Francophone West African region.
Geographic Presence:
Team Distribution: Saviu Ventures has a team of over 7 investors and operators spread across Abidjan, Dakar, and Paris, reflecting a strategic geographic presence.
Recent Investments:
Companies Funded: Saviu II has already made investments in Waspito (Cameroon), Rubyx (Senegal), and Workpay (Kenya), showcasing the fund’s proactive approach.
Founder’s Perspective — Quotes:
Benoit Delestre (Partner): “Reaching the first close of Saviu II and obtaining our License is a recognition of all the work that has been done… We are now ready to support a new generation of talented entrepreneurs within the Tech industry.”
Samuel Touboul (Partner): “The renewed commitment of private investors from our first to our second fund is for us a key sign of confidence in our very focused strategy, and its capacity to scale-up startups while creating both value and impact.”
Future Outlook:
Strategic Vision: Saviu II aims to leverage the strong brand name of Saviu Ventures, a reinforced team, and a new institutional framework to further invest in the flourishing startup ecosystem in Francophone Africa.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
Aquarech, a Kenyan fish farming startup, has successfully secured $1.7 million in equity funding to enhance the prospects of small-scale fish farmers in Kenya through its innovative mobile app platform. Established in 2019, the company is spearheaded by founder and CEO Dave Okech, based in Kisumu, and co-founded by James Odede and Joseph Okoth. Aquarech’s primary objective is to streamline fish farming production by leveraging its mobile app platform. This platform facilitates the seamless trading, buying, and selling of quality fish feed, while also serving as an educational resource for aquaculture best practices, aimed at improving the financial outcomes of farmers.
Team Aqua-spark
Small-scale farmers in the region often grapple with limited resources and struggle to access high-quality feed. Aquarech aims to address these challenges by boosting production, enhancing the economic prospects of small-scale farmers, and fostering overall growth in Kenya’s aquaculture industry. The startup adopts a holistic approach, supporting farmers with quality feed, climate-smart precision fish feeding techniques, market access, technical training, and financial assistance, including a 90-day credit period for feed payments.
In its latest funding round, Aquarech successfully raised $1.7 million in equity funding. This capital infusion will be utilized to recruit skilled talent, procure additional feed, and establish infrastructure to facilitate greater vertical integration of its technology. The investment was led by Aqua-Spark, a global aquaculture investment fund based in the Netherlands, with contributions from Acumen, Katapult, and Mercy Corps Ventures.
Dave Okech expressed the startup’s commitment to empowering farmers by quoting the proverb, “If you give a man a fish, you feed him for a day. If you teach a man to fish, you feed him for a lifetime.” He emphasized the goal of improving the aquaculture value chain, and the funding and partnerships with investors are pivotal in advancing Aquarech’s mobile-enabled platform. This platform aims to overcome barriers faced by smallholder fish farmers, fostering collaboration among various value chain actors while prioritizing the needs of the farmers.
Christiaan Lensvelt, the head of new deals at Aqua-Spark, commended Aquarech’s dedication to enhancing local livelihoods by supporting small to medium farmers in achieving commercial and environmental sustainability. Lensvelt expressed enthusiasm about supporting Aquarech’s team in their endeavors, highlighting the company as one of the few aquaculture startups in Africa with a distinctive blend of field experience and digital tools.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
WayUp Sports, a pioneering e-commerce platform specializing in performance-based sports gear in Egypt, has successfully secured a seed round of funding. This investment round is led by Beltone Venture Capital, Index Sports Fund, and several strategic angel investors. The exact amount raised in this round remains undisclosed. Emphasizing its commitment to originality and innovation, WayUp Sports aims to leverage this funding to advance its growth through three key initiatives: regional expansion, the launch of its exclusive WayUp Sports private brand, and the enhancement of user experiences on both its application and website.
Distinguished as the first of its kind in Egypt, WayUp Sports focuses on providing high-quality sportswear and equipment across various sports disciplines. The platform directly sources products from a diverse range of local and international brands, catering to everyone from aspiring young athletes to seasoned professionals. WayUp Sports offers customers a comprehensive journey, managing the entire process from product warehousing and quality checks to sales, delivery processes, and customer service training to assist sports enthusiasts.
In 2021, the sports apparel market in the Middle East and North Africa region was valued at USD 15 billion. With a burgeoning interest in healthier lifestyles, sports, and the prevalence of athleisure, the market is projected to reach USD 23 billion by 2029, exhibiting a compound annual growth rate (CAGR) of 4.8% during the forecast period. This upward trend underscores the growing demand for sportswear, with online channels playing a pivotal role in fueling substantial market growth and providing consumers access to the latest products available.
Commenting on this significant achievement, Mohamed Afifi, Co-founder and Co-CEO of WayUp Sports, expressed enthusiasm, stating, “This Seed round is a significant milestone for WayUp Sports that will support the growth of the company to meet the rising demand and potential in the local and regional market. Accordingly, we are excited to be backed by leading investors who understand and support our vision. Their trust in our business will help us enhance our offering and scale our business to the next level.”
Credits: WayUP
Ali Mokhtar, CEO of Beltone Venture Capital, added, “We are excited to support WayUp Sports and its leadership team to achieve their vision and lead the sports retail sector in Egypt and the MENA region. WayUp is considered the most promising company that achieved significant operational performance and business growth since its inception, within a rapidly growing market. With its ambitious expansion plans set in place, WayUp Sports company is well positioned to become the leading platform in the region.”
Benefiting from a collective 35 years of expertise in the B2B sports gear market, WayUp Sports was founded by Omar, Mohamed, and Basma Afifi in 2021 to meet the increasing demand for specialized and performance-based sportswear and equipment. Following a pre-seed round in 2022, the business has experienced remarkable growth, expanding nine times over. WayUp Sports has established strategic partnerships with over 70 diverse local and international brands, serving a wide array of sports, offering an extensive product range of over 10,000 items, and successfully serving more than 100,000 customers.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
Cameroonian health startup, Waspito, has successfully secured a $2.5 million seed extension in funding. Notable contributors to this investment include DP World, facilitated through Newtown Partners, along with Saviu Ventures, AAIC Investment, Axian Ventures, and CFAO’s Health54. The primary objective of this funding is to fuel Waspito’s expansion efforts within the Francophone region.
The startup, founded by Jean Lobe Lobe in early 2020, focuses on creating a health-centric social network. Users on Waspito can access verified doctors through video calls, obtain sample collection services at home, and receive medication deliveries. Waspito, dubbed the “Facebook for healthcare” by Lobe, adopts a unique approach to telemedicine by providing instant video consultations, eliminating the need for pre-registration and appointment bookings. The startup has expanded its operations to Ivory Coast and has plans for further growth in Senegal and Gabon.
Waspito, founder Jean Lobe Lobe
Why The Investors Invested
The investors’ decision to inject $2.5 million into Waspito is grounded in the startup’s innovative approach to telemedicine and its mission to make healthcare universally accessible.
Waspito’s emphasis on instant video consultations, integration with local hospitals, and partnerships with laboratories sets it apart in the health-tech landscape. The critical need for improved healthcare accessibility in target countries, where there are fewer than two doctors per 10,000 people, underscores the significance of Waspito’s mission.
The startup’s impressive track record, reaching 650,000 users, onboarding 950 doctors, and facilitating 60,000 consultations, demonstrates its potential impact. The hybrid model, piloted in Ivory Coast and set to expand, addresses the challenge of offline users in Africa, making healthcare services available even in areas with limited internet access.
A Look At Waspito
Waspito, founded by Jean Lobe Lobe in early 2020, emerged strategically just before the global COVID-19 pandemic, allowing it to fulfill its mission of enhancing healthcare accessibility.
In contrast to traditional telemedicine platforms, Waspito prioritizes instant connections with doctors rather than pre-scheduled appointments.
The platform, often likened to “Facebook for healthcare,” enables users to select available doctors online, and for additional medical services, it collaborates with partner laboratories and local hospitals.
Waspito has expanded its operations into Ivory Coast and plans further growth in Senegal and Gabon. The startup has gained recognition, winning the title of the best health startup in Africa at the VivaTech awards. Waspito’s innovative approach includes the establishment of mini-clinics in Ivory Coast, within the branch network of La Poste Corporation, catering to offline populations and expanding its reach.
The introduction of a hybrid model aims to address challenges related to internet costs and smartphone accessibility in Africa. The fundraising advisory firm Raisers played a pivotal role in advising Waspito during this successful funding round.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
FrontEdge, the Lagos-based fintech, recently secured a noteworthy $10 million in a seed round, with debt financing contributing over 70% of the total. Distinguished investors, including TLG Capital and notable partners like JP Morgan and Providus Bank, are backing FrontEdge.
The investment intends to fuel the expansion of the startup’s innovative approach, which involves providing upfront capital to SME exporters and importers without the conventional requirement of collateral.
Why The Investors Invested.
Addressing a Significant Market Gap:
The investment in FrontEdge is motivated by the recognition of a substantial gap in financing for cross-border trade in Africa, particularly affecting SMEs. The limited availability of financial intermediaries in banks for trade transactions, especially for smaller enterprises, highlights an underserved market. The annual value of international trade volumes in Africa is a staggering $1.2 trillion, indicating a vast untapped market. This presents a significant opportunity for startups like FrontEdge to reshape and facilitate African cross-border trade.
FrontEdge founder, Moni Alli
Experienced Leadership and Industry Knowledge:
The founder, Moni Alli, brings a wealth of experience, having worked as a consultant for McKinsey and in private equity at Development Partners International. His background in advising banks on SME financing, coupled with insights gained from digital transformations in tier-one banks, positions FrontEdge to understand and address the challenges in the market.
FrontEdge has evolved beyond a lending-first platform to become a vertical bank, offering financing, cross-border payments, offshore accounts, and software tools. Partnerships with established entities such as JP Morgan and Providus Bank enhance its credibility and broaden its service capabilities.
Proven Success and Growth:
FrontEdge claims to have recorded a zero default rate after performing over 50 contracts, demonstrating successful repayments and the effectiveness of its business model. The reported 20% month-on-month growth in SME exporters on its platform further validates its impact in the market.
A Look At FrontEdge
Founded in 2021 by Moni Alli, FrontEdge emerges as a dynamic force in the African fintech arena.
Headquartered in Lagos, FrontEdge primarily operates in Nigeria, South Africa, and Morocco. The startup’s core mission is to empower SME exporters and importers, providing them with working capital and sophisticated software tools to navigate the complexities of cross-border and international transactions.
Beyond financing, FrontEdge distinguishes itself by offering additional tools such as logistics management, cargo insurance, and document management, creating a comprehensive ecosystem for SMEs. The startup has demonstrated significant customer growth, with SME exporters reportedly tripling their sales on the platform since its launch.
As FrontEdge plans expansion into Nigeria, Ghana, Ivory Coast, and Kenya, its goal is to diversify revenue streams and further contribute to the financial empowerment of African SMEs engaged in global trade. The collaboration with partners like JP Morgan and Providus Bank reinforces FrontEdge’s position as a strategic player in the intersection of finance and technology, poised to reshape the landscape of cross-border trade in Africa.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
In a significant move to bolster its expansion plans, South African agritech startup Khula has secured an investment from a PepsiCo fund. The undisclosed investment will play a crucial role in furthering Khula’s mission of empowering farmers through a digital platform that connects them with suppliers, buyers, and financing options.
The Kgodiso Development Fund, established by PepsiCo South Africa to support the growth of emerging farmers, spearheaded this investment. With an initial capital of R600 million ($32.7M), the fund aims to enhance market-driven programs, collaborate on innovative solutions, and scale its impact through investments.
Khula’s founders, Karidas Tshintsholo, Jackson Dyora, and Matthew Piper, have created a digital ecosystem that addresses the challenges faced by South African farmers in accessing markets and securing financing. This investment from PepsiCo positions Khula well to expand its reach beyond South Africa, leveraging PepsiCo’s global presence and supply chain.
Khula!, PepsiCo and Kgodiso Fund team. Credits: Khula
PepsiCo Africa, Middle East, and South Asia CEO Eugene Willemsen emphasized the importance of partnerships like this one in addressing local development challenges. He stated, “These partnerships tackle knowledge and skills gaps across the South African food system, leading to real, large-scale strategic transformation. Additionally, PepsiCo’s scale and reach provide farmers and producers with a new route to market.”
PepsiCo and the Kgodiso Fund join Absa, AECI, and E Squared as shareholders in Khula, demonstrating the strong support for the startup’s mission of transforming the South African agricultural sector.
The Khula! Fresh Produce Marketplace connects farmers to suppliers and allows them to sell in bulk; the Khula! Funder Dashboard connects investors with farmers; and the Khula! Inputs App connects local farmers to local and international suppliers and service providers.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
Kenya’s Ed Partners Africa, a non-banking financial institution specializing in providing loans to affordable private schools, has disclosed its receipt of a US$10 million loan guarantee facility from the United States’ Development Finance Corporation (DFC) to enhance the accessibility of affordable education. Established in 2018 by Lydia Koros and David FitzHerbert, and presently under the leadership of CEO Amos Mwangi, Ed Partners offers financing solutions for critical components of the education system, encompassing infrastructure, technology, and transportation. The organization has made a substantial impact, extending its reach to over 100,000 students across 350 schools.
The startup extends infrastructural loans to educational institutions, supporting the construction of new classrooms, washrooms, laboratories, and dormitories, as well as the procurement of computers, buses, vans, and internet connectivity. Following a successful US$1.9 million funding round in June 2021, Ed Partners secured US$1.5 million in debt funding from Oiko Credit in August. Building on these achievements, the company has now obtained a US$10 million loan guarantee from DFC, aligning with DFC’s commitment to enhancing access to quality education, particularly for underserved populations.
Ed Partners AfricaCEO Amos Mwangi
Upon disbursement, the loan aims to facilitate the expansion of accessible, high-quality education opportunities in Kenya by providing crucial financial support to these schools. James Polan, vice president of DFC’s Office of Development Credit, emphasized the significance of this transaction in delivering essential financing to enhance access to affordable, quality education, particularly for underserved populations in Kenya. He highlighted that the investment reflects DFC’s dedication to improving educational access in Kenya and supporting sustainable development in the region.
Janet Waweru, CFO of Ed Partners Africa, expressed enthusiasm about the collaboration with DFC, stating that the company is “thrilled” to partner with DFC in their joint efforts to expand educational opportunities in Kenya and East Africa. She emphasized that the funding will empower them to reach more schools and students, thereby improving learning outcomes and making quality education more accessible. Ultimately, this contributes to the long-term development and prosperity of the region, according to Waweru.
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
In the wake of Sam Altman’s abrupt departure from the helm of ChatGPT, a colossal $86 billion-dollar artificial intelligence behemoth, investor-backed founders across the world have found themselves terribly shaken. The unsettling reality of a founder being ousted by their own board has never been portrayed in a more unfeeling manner. Questions echo: Can investors wield such omnipotent influence that the essence of a startup, nurtured with sweat and sacrifice, dissipates at their whims? This isn’t an isolated incident but part of a recurring narrative, a stark reminder that the boardroom battleground is not for the faint of heart.
For African founders attuned to the heartbeat of the continent’s startup ecosystem, Altman’s saga might seem an anomaly garnering undue attention. After all, haven’t founders in Egypt, like those at Capiter, faced the guillotine recently? Isn’t Nigeria’s startup landscape a theatre of recurrent sackings, reshufflings, and restorations, exemplified by the tumultuous journeys of Risevest and 54Gene? Hasn’t Ghana’s Dash seen founders prosecuted, further muddying the waters of entrepreneurial uncertainty?
Yet, amidst this turbulence, a profound question lingers: Who is next? The attention on Altman’s saga serves as a compelling call for introspection, urging African founders to scrutinize the power dynamics within their own startup boardrooms. It’s a moment to pause, reflect, and decipher the implications of such upheavals.
In the African context, the urgency to dissect the power plays on the board might be downplayed. The prevailing survival mode, coupled with the less-sophisticated deal landscape dominated by pre-seed and seed-stage funding, may divert attention away from the nuances of board dynamics. However, savvy founders, those playing the long game, recognize that the road to entrepreneurial success is paved with a deep understanding of corporate governance.
As a seasoned corporate governance expert, having navigated the intricacies of numerous board and founder relationships, I seize this opportunity to sound the alarm. The questions that demand answers are not just about the when and why of constituting a board. They delve into the intricate details of power structures embedded in co-founder agreements, capitalization tables, and the strategic use of instruments like Simple Agreements for Future Equity and convertible notes. They encompass the delicate dance around intellectual property rights, Non-Disclosure Agreements, and other legal nuances, particularly those relating to stock options.
Decoding the Board’s Role in Your Startup’s Journey
In the labyrinth of a startup’s evolution, the question of when to establish a board of directors emerges as a pivotal consideration. While the embryonic stages — pre-seed, seed, ideation, and validation — may not mandate a formal board, astute founders recognize the importance of laying a robust foundation. Missteps in early structural decisions can inadvertently diminish founder authority when the critical juncture for constituting a board arrives.
Structural pillars such as co-founder agreements, capitalization tables, Simple Agreements for Future Equity, convertible notes, vesting schedules, and intellectual property ownership demand meticulous attention. Legal nuances, including advisor and consultant rights and stock option plans, must not be underestimated.
Setting the Stage: Establishing a Board for Your Startup’s Success
As a startup burgeons into the growth stage, especially during late-stage fundraising rounds, external investors often wield influence in board appointments. The board, a linchpin in steering the company, shoulders responsibilities ranging from senior management oversight to strategic direction setting. Founders, therefore, need a sagacious approach to maintain influence over board composition.
A cardinal rule in this chess game is filtering investors judiciously. The character of an investor can reverberate on the board, making investor selection a strategic lever for founders.
Sustaining Harmony: Strategies for Founder-Board Relationships
While trust is fundamental in founder-investor-board relationships, time-tested practices exist to fortify these connections. A few critical guidelines include:
Diverse Board Composition: Strive for a balanced mix of Executive, Non-Executive, and Independent Non-Executive members. A majority of Non-Executive Directors, preferably independent, fosters impartiality, mitigates conflicts, and checks excessive board powers.
Strategic appointment of independent directors: These seasoned individuals play a pivotal role in charting clear directions for the company, drawing upon their extensive experience to infuse the boardroom with fresh and innovative ideas. Independent directors who possess industry-specific expertise, as their insights are invaluable for navigating the intricacies of your business landscape. As a guiding principle, it is advisable to ensure that a majority of the Non-Executive directors are independent, reinforcing a diverse and objective perspective within the board.
Regular replacements and changes: This proactive approach to board evolution serves as a catalyst for injecting new energy and diverse viewpoints into the decision-making process. Board members, like any other aspect of a startup, should not become immune to change. A three-year cycle for board members allows for a healthy rotation, preventing the entrenchment of specific ideologies and fostering an environment receptive to evolving market trends.
Elimination of Bad Faith among Board Members: A strict avoidance of board positions in competing companies is paramount to uphold confidentiality and prevent conflicts. Therefore, prospective directors should disclose existing board memberships, minimizing suspicions and conflicts of interest.
Separation of Board Powers: A sound board should have the roles of Chairman and Managing Director/CEO decoupled to forestall concentrated authority. For example, this prevents the chairman from assuming the CEO role if the latter is displaced. There should be a standing policy of the company’s board on this.
Strategic Succession Planning: Early succession planning is not merely a precautionary measure; it serves as a cornerstone in concretizing the mandate and obligations of board members. By outlining a well-defined roadmap for leadership transitions, these plans ensure that the board’s functions remain uninterrupted, maintaining stability and strategic continuity. Succession plans offer a proactive approach to talent development within the board, identifying and nurturing potential leaders from within the existing ranks. This foresight not only mitigates the risks associated with sudden leadership changes but also facilitates a smooth transition by preparing successors well in advance.
Conflict of Interest Vigilance: Timely disclosure of any potential conflicts is imperative, subject to the company’s Conflict of Interest Policy. Accordingly, CEOs and other directors must declare conflicts of interest upon appointment and annually thereafter.
Independence: Ideally, MD/CEO and Executive Directors should abstain from remuneration, audit, and nomination and governance committees to uphold impartiality.
Administrative Rigor: A sound board should appoint a company secretary, hold quarterly board meetings, establish board committees, and define directors’ terms of engagement for clarity and focus.
External Evaluation: External Evaluation: Conducted periodically, typically on an annual basis, independent board effectiveness evaluations by external consultants serve as a vital mechanism to assess the board’s competence, diversity, and alignment with strategic goals. These evaluations are a valuable tool for identifying underperforming board members or those in need of realignment with organizational objectives.
Transparency and Governance Policies: The effectiveness of a board hinges on robust policies that guide its actions and those of its members, eliminating unwarranted surprises. Therefore, it is essential for the board to establish well-defined policies right from the outset. These policies should cover critical areas such as ownership structure, related-party transactions, anti-money laundering, terrorism financing, donations, and fraud detection, effectively mitigating the risk of board overreach. To ensure seamless implementation, directors should undergo comprehensive training on these policies before taking their positions on the board. This proactive approach not only cultivates a culture of transparency and compliance but also equips board members with the knowledge needed to make informed decisions in alignment with the established policies.
As African founders navigate the intricate tapestry of startup governance, embracing these battle-tested tactics ensures not only a smooth ride but also fortifies the foundation for enduring success. In the volatile realm of entrepreneurship, where boardrooms mirror battlefields, strategic governance becomes the armor that safeguards the visionaries forging ahead. It’s not just about surviving the boardroom battlefield; it’s about emerging victorious, with a legacy that withstands the test of time. Founders who navigate these waters adeptly lay the groundwork for sustained success and resilience.
If you’re interested in a comprehensive assessment of your board’s performance through a board effectiveness evaluation, kindly reach out to us via email at info@progressionlawfirm.com.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard
