Founder Vesting Disputes Are Piling Up as the 2021 Cohort Hits Year Four

The 2021 vintage is reaching its four-year cliff, and the paperwork is not holding up. Three startup-focused law firms in Lagos and Nairobi told Afrikons they are handling more co-founder separation matters this year than in the previous three combined — one firm put the increase at roughly 4x.

The pattern is consistent. Companies incorporated in 2021 and 2022, during a period when rounds closed in weeks, frequently adopted template documents without adapting them: acceleration triggers that fire on any change of control including a down-round recapitalization, vesting schedules that never actually started because the board never adopted the plan, and repurchase rights priced at a valuation that no longer exists.

"My least favorite sentence in this job is 'we were moving fast so we used the standard docs,'" said Chinelo Umeh, a corporate lawyer in Lagos who has handled nine such matters this year. "There is no standard. There is a document somebody's American lawyer wrote for a Delaware company in 2019, pasted into a Nigerian entity, referencing a stock plan that does not exist."

The cleanup is expensive and slow, and it frequently surfaces during a financing, when a new investor's diligence discovers that a departed co-founder still holds 18% of a company that thought it had repurchased the stake. Investors have responded by pushing cap-table cleanups earlier — several now require a full equity audit at Series A, a step that would have been considered insulting three years ago.