Celestine( not his real name) started a fintech business with his friends that he met while he was schooling abroad.
The Fintech business model is to make it easy for young Africans to buy cryptocurrency before CBN banned banks from facilitating crypto trading, also the Fintech business model includes a payment wallet where you can pay your bills and they also provide a remittance solution that made it convenient for Nigerians in the diaspora to receive and send money to their dependents in Nigeria.
The business was booming, cash flow was regular and life was fine until EFCC struck.
Apparently, the operatives of EFCC flagged Celestine Fintech’s bank accounts because of the volume of transactions it records daily and those EFCC operatives still living in the analogue age thought they were into Yahoo business or money laundering because they did not understand the model of the business and how it generates billions of naira as monthly revenue.
And so EFCC struck.
On a fine Monday morning like that, EFCC raided Celestine’s office at Ikoyi, Celestine was picked up with his CTO and they were taken to the commission’s office at Ikoyi to explain the source of the funds that move through their account.
Celestine and his CTO called their lawyers to join them at the EFCC office and after interrogation by the operatives of the anti-corruption body, the operatives were not convinced that the Fintech Celestine was running was a legit business.
“Just like that, you people are making billions of naira monthly”?
“Is it how easy it is to make money? EFCC officials queried Celestine and his lawyers.
After 3 days of intensive interrogation by EFCC operatives with documents tendered, the EFFC guys were finally convinced that Celestine Fintech business was legit until they asked one important question- who is on your board?
Celestine and his CTO froze.
They had no one, which was another problem. It took the intervention of Celestine’s dad who is a big man and an elite within the Lagos circle to get his son and the CTO off the EFCC hook.
I learnt a valuable business lesson I had taken for granted before that day-Nigeria is a hostile place to do business but a business with a board of directors made up of reputable individuals is a signal to the system that you are not running a Yahoo yahoo/money laundering business.
Most importantly, you are not running a business that is a criminal threat to the society.
Your startup needs a board of directors to derisk the risk of doing business in Nigeria.
If Celestine had a board with a well-connected individual as the chairman of the board, he would not have spent 3 days with EFCC. It is not possible
What would have happened is that the board of directors would have gotten involved to explain to EFCC what the business does, how they generate their cash flow and most importantly, the chairman of the board would just make a call and Celestine would be freed from the EFCC gulag.
That Obi Cubana is spending his second night at EFCC cell, contrary to the report that went out yesterday that he has been released is because of the absence of a structured board of directors for his Cubana business.
If Cubana group were to have a Nigerian big man /big woman with influence and clout for instance as the chairman of the business, I doubt that EFCC would have arrested him, they would have thought it twice before coming for him knowing that he has a well-structured board of directors that back him up.
Allen Onyema of Air Peace paid dearly for not having a structured board of directors for Air peace airline when he was indicted for money laundering by the American Department of Justice.
If Air Peace has had a board of directors with proper corporate sound practice and structure, Allen would not have made the schoolboy mistake that he did, moving money around for the purpose not intended for it because the board will never allow nor authorize him to engage in such unethical practice but the good thing is that he learned from that experience by constituting board of directors for his Airline business after the indictment.
Air Peace Airline today has a proper board of directors made up of 7 board members, board members who are seasoned men and women and they are expected to bring to bear their experience to the growth of Nigeria’s biggest airline.
According to Iyinoluwa Aboyeji, the only Nigerian tech entrepreneur who founded two unicorn companies (Flutterwave and Andela), Here are five tips for picking the right board members for your Nigerian startup.
1.) Stay away from partisan politicians even if they are in power today. Power comes and goes. If they leave power you will become a casualty of their politics. Instead, focus on those who are apolitical and have served across administrations. Their networks are more widespread.
- Try to find someone who sees being on your board as a social mission or with whom you have a personal relationship, not just a business opportunity. This way you don’t have to worry about take over attempts.
- Reference board members before you bring them on board. Some board members are trouble. Some have corporate misconduct or political exposure past you don’t want to be affiliated with. Use Kroll or a good background check company.
4 Find someone who is willing to learn from you too. Many board members just want to dispense wisdom independent of context or information about what has changed and what remains important.
- Be loyal and build trust with your board members by always keeping them informed. Don’t treat them like rubber stamps. Don’t make major decisions without consulting them. Never bad-mouth them and even when you disagree use emotional intelligence.
There is so much wisdom and power in intergenerational solidarity. I have been very lucky with my older friends. Many older people want to deeply invest in young people. Make it worth their time Iyin concluded.
Another thing to note is that it is not important nor mandatory for these board members to invest in your business, you can invite them to join the board of your business for their clout, experience and contact because When you have EFCC case, Police trouble or regulator Wahala for instance, just one phone call and you are a free man/woman.
Because of Celestine’s experience, the next business I’m about to start with my friends next year will have a solid board of directors with a big man/woman that has clout and contact as the chairman of the startup.
This is very important.
So dear young millennial entrepreneur, your business will not be a small business forever.
One day, it will scale the way Cubana’s scaled so for you to do business in a hostile place like Nigeria where many people are praying for your downfall, a country with so much hatred and vileness, you need to have in place, a proper board of directors for your business with a solid chairman that has clout and contacts of who is who in Nigeria to head the board of the startup.
I’m sure you will not like to sleep over at the EFCC office because the illiterate EFCC operatives do not understand how your business makes money.
A stitch in time they say saves nine
Chukwudi Iwuchukwu
