Fundraising Under the Nigerian Startup Act and CAMA 2020: A Founder's Roadmap

The Nigerian Startup Act 2022, read alongside CAMA 2020, has created the most founder-friendly capital-raising environment the country has ever seen — but the ecosystem's enthusiasm often outruns compliance. Labelled startups enjoy meaningful advantages: pioneer-status tax reliefs, streamlined intellectual property registration, and access to the Startup Investment Seed Fund. To qualify, a company must be incorporated for less than ten years, hold at least one product or process innovation, and be labelled by the National Council for Digital Economy and E-Governance. On the fundraising side, CAMA 2020's provisions on private placements, statement in lieu of prospectus, and the newly recognised concept of preference share classes have opened institutional structures previously available only through complex holdco arrangements. Convertible instruments — long a grey area — now have clearer treatment through the Investments and Securities Act framework. Three recurring issues we see: (1) founders signing SAFE agreements drafted for Delaware without adapting them to Nigerian equity mechanics, (2) failure to update the register of members and beneficial owners after each round, and (3) neglecting the Startup Act's labelling maintenance obligations, which can trigger loss of tax reliefs. Our Corporate & Business practice regularly advises founders and lead investors on term sheets, cap-table construction, and the regulatory choreography that makes a Nigerian round bankable to international LPs.