The United States plays a significant role in the funding and incorporation of Nigerian startups. In 2021, over 60% of venture capital funding for Nigerian startups came from the United States. And according to the U.S. Consul General in Nigeria, Will Stevens, 80% of Nigerian startups are incorporated in the U.S.
There are several reasons why Nigerian startups choose to incorporate and seek funding in the United States. One reason is that the US has a well-developed startup ecosystem with a large pool of experienced investors and entrepreneurs. Additionally, the US has a strong legal system and intellectual property protections that can be attractive to startups.
The United States believes that supporting Nigerian startups can help to create jobs, boost economic growth, and reduce poverty in Nigeria. By investing in Nigerian startups, the United States is helping to create a more prosperous and stable Nigeria.
Nigeria has a large and young population, and many Nigerians are highly skilled in technology and innovation. The United States is interested in tapping into this talent pool to help its own businesses and industries thrive.
Another reason is that the US has a more transparent and predictable regulatory environment than Nigeria. This can make it easier for startups to raise capital and operate their businesses. Additionally, the US has a larger and more sophisticated market for technology and innovation, which can provide Nigerian startups with access to new customers and partners.
The United States and Nigeria have a long and close relationship. By supporting Nigerian startups, the United States is strengthening these ties and building a more prosperous partnership between the two countries.
The United States is sponsoring Nigerian startups through a variety of programs and initiatives such as the AGOA, the USADF, and the MCC. When using the AGOA, which is a trade program that provides duty-free access to the U.S. market for certain products from eligible African countries, the United States gives Nigerian startups the opportunity to position their products or services in the U.S. market before they even come to fruition.
USADF is a US government agency that provides grants and loans to African businesses, including startups. USADF has invested in a number of Nigerian startups in the past, and it is committed to supporting the growth of the Nigerian startup ecosystem. And the Millennium Challenge Corporation (MCC), is a US government agency that provides grants to developing countries to implement poverty reduction programs. MCC has funded a number of projects in Nigeria that are aimed at supporting economic growth and development, including the development of the Nigerian startup sphere.
While the US is a major source of funding and incorporation for Nigerian startups, there is also a growing domestic venture capital industry in Nigeria. In recent years, several Nigerian venture capital firms have been established, and these firms are increasingly investing in Nigerian startups.
The United States' sponsorship of Nigerian startups is a win-win for both countries. Nigerian startups are gaining access to capital, expertise, and resources that they need to grow and succeed. The United States is gaining access to a new pool of talent and innovation, and it is strengthening its ties with Nigeria.