Morenike George Taylor, Founder Reni Legal Consulting | County Support Consulting (Image: Supplied)

I remember a pivotal moment in my career that taught me a profound lesson about the importance of securing sufficient funding for a project. It all started when my team and I were working on an ambitious venture, a hotel to be located in Lekki, a high brow area in Nigeria. After months of planning, I found an investor who was excited about the potential. He assured me that he would provide the necessary funds to bring our vision to life.

Initially, the investor invested a portion of the money, which gave my team and I a glimmer of hope. With that commitment, I felt a surge of confidence. We began allocating resources, hiring a team, and setting timelines. Everything seemed aligned for success. 

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However, as we progressed, the promises began to wane. The investor started delaying further payments, citing various reasons that ranged from market fluctuations to unforeseen personal issues. Each time I reached out for updates, I was met with assurances that the funds would come through soon. Then, midway through the project, the investor informed me that he could no longer fund the project. 

This sudden withdrawal created a domino effect. We had already committed to other businesses that were relying on our funding to get started. As the primary business was still in development, those secondary businesses began to pressure me for repayments. They had their own obligations, and without the promised funds, they found themselves in a precarious position. It was an overwhelming situation, and I watched helplessly as relationships soured and trust evaporated.

The main business, which had so much promise, struggled to survive. Without the necessary capital, we couldn’t complete our operations or deliver our product to market. As the financial strain mounted, it became clear that our venture was on the brink of collapse. Ultimately, the business we had worked so hard to build didn’t make it.

This experience was a harsh but invaluable lesson. It underscored the critical importance of raising sufficient funding before embarking on any ambitious project and how this needs to be taken into consideration in any contract documentation you sign. If I had tied all our contracts and obligations to the complete funds being raised, we could have safeguarded our operations against such unforeseen circumstances.

This experience taught me that in business, clarity and preparation are paramount. Without sufficient funding, dreams can quickly turn into nightmares, and projects that hold so much promise can fade away before they even have a chance to succeed

In the world of business, securing adequate funding is crucial for success. Particularly, if you require $1,000,000 for example to execute your vision, it is essential to raise that exact amount and tie all your contracts to this figure, especially concerning repayment terms. This approach ensures that your business can commence operations without financial strain.

When you set out to raise capital, clearly defining your financial needs is the first step. If you determine that your project requires $1,000,000, raising exactly that amount helps avoid unnecessary complications. Insufficient funding can lead to a cascade of operational issues, including delays, inability to meet contractual obligations, and ultimately, project failure. By securing the full amount, you create a solid foundation for your business operations.

Tying your contracts to the $1,000,000 funding goal is a strategic move. This means that all agreements—whether with investors, lenders, or partners—should explicitly state that the commencement of business activities, as well as repayment obligations, are contingent on successfully raising this amount. If the funding goal is not achieved, the repayment terms should reflect that the business cannot commence. This protects you and your stakeholders from the risks associated with undercapitalization.

By ensuring that all agreements explicitly stated that the project’s commencement and the repayment terms hinged on successfully raising that target amount, we would have mitigated the risks of undercapitalization.  It became clear to me that having a well-structured funding strategy is not just a financial necessity; it’s essential for operational stability and long-term success.

Now, I always emphasize to entrepreneurs the importance of securing the full amount required before diving into a project. A well-capitalized venture is not just better positioned to navigate challenges; it can seize opportunities and grow sustainably.

About the author:

Morenike is an award winning business strategist and the founder of Reni Legal Consulting and County Support Consulting. She operates as a business consultant across various sectors, leveraging her extensive expertise to provide strategic insights and tailored solutions. With a keen understanding of the complexities of different industries, she helps organizations navigate challenges and seize opportunities for growth.

As a qualified lawyer, Morenike combines her legal knowledge with a strong foundation in data management, agile methodologies, and risk management. She is a certified Data Management Professional, a Disciplined Agile Scrum Master, and a Risk Management Professional. This diverse skill set allows her to approach each consulting engagement with a comprehensive perspective, driving operational efficiency and fostering organizational success.

In a groundbreaking move to drive innovation and entrepreneurship across Africa, the African Union and its partners, including Google and Africa Practice, have launched the AU Startup Policy Framework and Model Law. The Policy Framework and Model Law articulate principles, recommendations, and policy innovations to tackle the challenges hindering startups in Africa. It provides specific sample clauses to guide African Union Member States in developing or updating their national startup legislative and regulatory governance arrangements.

The Policy Framework and Model Law, developed in cooperation with Google in line with its Memorandum of Understanding with the African Union Commission, is set to harmonise approaches to enabling startups and innovation, in line with the African Union’s broader harmonisation objectives.

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Speaking during the launch held during the African Union 6th Mid-Year Coordination Meeting that brings together the African Union, the Regional Economic Communities, the Regional Mechanisms and the African Union Member States, H.E. Albert M. Muchanga, African Union Commissioner for Economic Development, Trade, Tourism, Industry and Minerals, said, “We are excited about the new prospects for our continent unlocked by the adoption of the Startup Policy Framework and Model Law which is set to leapfrog the startup ecosystem in Africa. As you know, small and medium-sized enterprises, including startups, represent most businesses in all sectors and are the primary source of job creation. Specifically, startups spur development by creating jobs in the digital economy, employing 34,000 people across the continent. Unfortunately, out of 1000 unicorns globally, only seven are in Africa. This is primarily due to complex regulations, limited funding, a scarcity of skilled labour, and fragmented markets in Africa. Therefore, the framework is expected to unlock some of these hurdles and set a strong foundation for the growth of  Africa’s startup landscape, projected to expand to USD 10 billion by 2056.”

H.E. Albert M. Muchanga went on to highlight that “Africa is a young continent, by 2050, the continent will account for 25% of the global population. Governments need to make the provisions to enable capital flow for the burgeoning ideas coming out of Africa. We need to create an environment that enables these innovative minds to catapult the continent to economic prosperity, and this framework is what enables this.” 

Google’s Regional Director, Sub Saharan Africa, Government Affairs & Public Policy, Charles Murito, noted, “Africa receives a disproportionately small share of global venture funding. In 2023, the continent raised a total of USD 4.5 billion from 545 disclosed venture capital deals, reflecting a 30% decrease in value and a 31% decline in the number of deals compared to 2022. Notably, 16% of the funding recipients were female-led ventures, only marginally up from 11% in 2020. Funding flows also skew towards the same sectors, exacerbating the financing challenge; with fintech continuing to lead deal volumes. The same destinations also receive disproportionately more of the financing flows into the continent: startups in Nigeria, Kenya, South Africa, and Egypt received 62% of the total deal volume.” 

While there’s no universal formula for fostering innovation and startups, the framework outlines principles derived from successful models. It is a call to action to ensure that startups — particularly those led by women and youth can be better supported. This Policy Framework and Model Law holds the potential to address gender disproportionality in financing flows, inspiring a new wave of innovation and growth. 

Marie Wilke, the Chief Innovation Officer at consulting firm Africa Practice, said, “The adoption of the Startup Policy Framework and Model Law marks the beginning of an exciting but potentially transformative phase. We must maintain momentum behind engagements with regional economic communities (RECs), regional organisations (ROs), and member states, to update and enact regional legal frameworks and national laws. Innovation is as much about finance and people as it is about drive. The future of Africa’s small and new businesses depends on our joint and decisive efforts to support them, paving the way for The Africa We Want.”

Photo Credits: Tonkin Clacey Inc

In the complex and intricate world of law, where every case is a story waiting to be told, the wisdom passed down from seasoned legal professionals holds immeasurable value. Within the hallowed halls of law firms and legal institutions, an age-old tradition persists-one that transcends formal training and case law. It’s the tradition of fireside chats, where senior legal practitioners weave narratives of their experiences, trials, and triumphs, igniting the flames of inspiration in the hearts of their junior counterparts.

In these intimate gatherings, the rigid walls of hierarchy crumble, and the barriers between senior and junior practitioners’ dissolve. Here, amidst the flickering glow of the fire, stories untold-stories of courtroom battles won and lost, negotiations that sealed deals or unraveled, and ethical dilemmas faced with unwavering resolve. Through these stories, senior legal practitioners impart not just legal knowledge but invaluable lessons from the trenches of practice.

For junior practitioners, these fireside chats serve as a beacon of guidance, illuminating the path ahead with the collective wisdom of those who’ve walked it before. They chats provide insights that textbooks can’t convey, painting a vivid picture of the complexities and nuances of legal practice. From navigating tricky client interactions to finding creative solutions to legal challenges, the stories shared in these informal gatherings offer a treasure trove of practical advice.

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Moreover, fireside chats help to build   a sense of fellowship and community within the legal profession. They create spaces where junior practitioners feel seen, heard, and valued—not just as legal novices, but as aspiring storytellers in their own right. Through the exchange of anecdotes and experiences, bonds are forged, mentorship relationships blossom, and a culture of continuous learning thrives.

Most importantly, these chats have the power to shape the trajectory of junior practitioners’ careers. By exposing them to diverse perspectives and real-world scenarios, these informal gatherings expand their horizons, instilling in them the confidence to navigate the complexities of the legal landscape. They inspire them to dream bigger, reach higher, and aspire to leave their own indelible mark on the legal profession. 

Photo Credits: Baker McKenzie

In a profession where the stakes are high, and the journey is fraught with challenges, storytelling becomes a guiding light—a compass that points towards excellence, integrity, and justice. The Advancing Women in the Workplace (AWW) program- a program to support women in leadership in South Africa adopted this approach of storytelling as a model. So, let us gather around, dear practitioners, and share our stories. For in the flicker of the flames lies the power to shape not just individual careers, but the future of the legal profession itself.

Acknowledgements

The AWW program, a program sponsored by Vance Centre in partnership with the South African Legal Fellows Network and the US mission.

Written by: Adaobi Adaobi Egboka and Dr Kim Lamont-Mbawuli. Africa Program Director, Cyrus R. Vance Center for International Justice, Vance Center Consultant and Director of KLM attorneys.