With African startups raising $4.65 billion in 2021, it’s never been more enticing to be a startup founder. After all, who wouldn’t want to raise millions of dollars and have their business efforts celebrated?
However, reality isn’t as smooth for startup founders as it appears in the media. Instead, the journey can be uncertain and financially challenging. Karen Chukwu, co-founder and managing partner at Katwig & Dale, can relate to that.
Speaking to us, she shares all about her entrepreneurial journey, including how she had to make lifestyle changes after giving up her cushy six-figure annual salary (with serious perks) to start her own law firm.
What do you do at Katwig & Dale?
Apart from co-founding it alongside two other women, I handle the day-to-day operations and client management tasks.
Who are your typical clients?
Startups and individuals. We help them with regulatory compliance, tax advisory, intellectual property registration, company secretarial services, fundraising, investment support, and general legal support.
So you don’t cater to other businesses?
We do. For instance, one of the partners loves working with oil and gas companies. We also help normal businesses with litigation occasionally. But we try to serve mainly startups.
Why the heavy focus on startups, though?
First, my partners and I have a background in IT. So we understand how most founders focus on the tech aspect of their startups to the detriment of other important parts, like compliance.
But we also understand no one wants to invest in a legally embattled startup. This is why we thought to take away the burden of legal matters off founders’ shoulders, so they can do the actual work of building and scaling their ideas.
Have you made any progress with that mission?
Yes, we have. Presently, we have ten retainers. We’re also in partnership with Open Source Africa and working on other partnerships that we’ll announce soon.
Interesting. But your law firm is just 7 months old, correct?
Oh wow. How have you been able to achieve that level of trust in such a short time?
It started with recommendations from my network. Thankfully, we’re able to do excellent work for those referrals. We’ve also plugged into collaborating with incubators. That way, my partners and I have been able to position the firm as the one-stop legal shop for startups, who not only give you legal advice but can also help with market penetration.
Your partners seem amazing
Yes, they are.
So tell me. How did you meet them and why did you choose to run the firm with them?
I’ve known the two of them since our postgraduate days at the University of East Anglia, Norwich. There, we went to competitions together. I also helped one of my partners manage her food business. So when I thought of the law firm idea, they were my first choice.
Not only do we work well together, but they also have more experience than I do.
On average, how much does it cost to run Katwig & Dale?
Around ₦200k per month. And this is because we’re fully remote, so we don’t have to worry about diesel costs. The only exception is whenever we have physical meetings with clients. Other expenses include Google Workspace and data, which costs an average of ₦100k.
And who’s responsible for these costs?
Initially, my partners and I were responsible. But the company has grown enough to run on its profit.
Startups, especially at pre-launch or early-stage, aren’t exactly profitable. So how do you make money from offering them legal advice?
We have a debt financing plan for early-stage startups that haven’t raised funds yet. By this, they first pay a certain amount and balance the remaining amount at a fixed time when they should have raised funds or made a profit.
What of the funded and profitable startups? How much do you charge them?
We charge them a monthly fixed fee between ₦135K to ₦180K.
In retrospect, would you say your entrepreneurial journey has been fulfilling?
It has, but there are days when it gets difficult.
What do you mean?
Starting my own law firm meant I had to give up my well-paying job (among other benefits like a two-bedroom serviced apartment in Oniru, Lagos). Now, I have to work twice as hard despite receiving a full salary only once since we launched.
Essentially, you gave up a baby girl lifestyle to be a founder?
[Laughs] Yes, I did.
Nonetheless, I’m fulfilled, as serving startups is an interesting (and sometimes chaotic) job. I wake up every morning knowing that I’m helping potential unicorns succeed.
Hmmm. But how have you been able to sustain yourself, though?
I live on the stack of funds I managed to save before resigning from my previous job.
Oh wow. So you had an exit plan?
No. I’m a natural saver, so I had always kept part of my salary aside. My resignation was more necessary than optional.
My last workplace was a bit toxic, and it started affecting my mental health. I initially planned to leave for another full-time job, but work at Katwig & Dale had become intense, and I didn’t want to divide my attention. So I left to become a full-time founder.
But have you always seen yourself becoming a law firm founder?
Yes, I have. And I guess the universe has prepared me for this moment as I’ve always held leadership positions all my life.
If you could speak to your younger self, what would you tell her about building a law firm for startups?
Africa is growing and everyday young people are coming up with great scalable ideas and building products to sustain that growth. You need to support these young people with legal advice and do it early enough.