How Nigeria’s startups keep failing
…as a researcher asks if the screening starts late
By Ifeanyi Onuoha
ANALYSIS
Nigeria’s entrepreneurship ecosystem has become steadily better at supporting founders. There is more funding, there are more accelerators, more pitch competitions and more training than a decade ago. What it does less systematically is ask a prior question: whether the person entering the programme is ready to build anything at all.
The past eighteen months have given that question weight. Edukoya, which raised $3.5 million in 2021 in what was then one of Africa’s largest pre-seed rounds, shut down in February 2025 and returned capital to investors, citing connectivity, device access and household purchasing power.
Okra, the open-banking pioneer that raised more than $16.5 million from backers including TLcom Capital and Susa Ventures, closed in May 2025.
Medsaf, the pharmaceutical supply-chain startup, ran out of cash, entered acquisition talks in late 2024 and shut down when no buyer materialised.
The most recent case is FoodCourt. The Y Combinator-backed cloud kitchen had reported raising $1.7 million, delivering more than a million meals and reaching $4.3 million in annual recurring revenue by the end of 2024. Kitchen staff in Lekki went on strike over unpaid wages in March 2026. By April 19th, the company’s last branch had closed and the app was offline.
Chief executive Henry Nneji told TechCabal the pause stemmed from a combination of operational, organisational and working-capital pressures rather than any single failure.
These are not one story. Edukoya wound down responsibly in a market that could not pay; FoodCourt collapsed under the cost of owning its entire supply chain. Capital constraints, unit economics, regulation and infrastructure explain far more about these outcomes than anything about the founders. Any argument that begins by attributing failure to individual readiness is starting in the wrong place.
But the ecosystem question sits earlier in the chain, and it is a different one: what happens before a founder receives the funding, training or support meant to help them succeed?
Assessing the founder, not the idea
Zainab Adewunmi Aderinwale has built a framework around exactly that gap. A psychology graduate of Obafemi Awolowo University with a Master of Arts in Leadership, Diversity, Equity, Inclusion and Justice from Tufts University, she also serves as a Commissioner and Chair of Communications and Outreach on the Upper Middlesex Commission on the Status of Women in Massachusetts. Her work on founder psychology has been published by the Society for Industrial and Organizational Psychology.
Her Passion–Problem–Solution Framework evaluates prospective entrepreneurs across three dimensions before they enter a programme. Passion asks whether motivation is intrinsic and durable enough to survive difficulty. Problem asks whether the person understands the challenge they propose to solve. Solution asks whether the proposed response is coherent.
The premise is that programmes spend heavily on teaching people to build businesses and comparatively little on assessing whether entrants have the motivation, problem understanding and solution clarity to use that teaching.
For Aderinwale, founder readiness is not a question of entrepreneurial skill. It is a question of whether the person is psychologically and practically prepared for what building demands.
What the programme data shows
Make Mee Elegant Foundation, a nonprofit running skills-acquisition and women’s empowerment programmes, adopted the framework in its selection process in 2022. According to the foundation, its completion rate had previously sat below 50%; after adoption, completion reached 80% across more than 50 trainees, and 65% of those who completed went on to launch businesses. The foundation also reported that participants became more deliberate about online sales and social media.
The foundation has continued using the framework in subsequent cycles. The shift raised a question about its own process: whether some of the outcomes it had been trying to improve were being settled before training began.
Government adoption followed. The Osun State Ministry of Women Affairs, Children and Social Welfare took up the framework in 2023 across programme cycles reaching more than 1,000 women entrepreneurs. The ministry confirmed a 20% improvement in completion and business sustainability outcomes after adoption.
Kogi State followed. The Kogi State Ministry of Commerce and Industry began applying the framework informally in 2024, after coverage in The Guardian Nigeria, and embedded it formally in programme selection from March 2025. It now forms part of the Ministry’s Business Association Framework, a state-wide initiative to formalise and support businesses across all twenty-one local government areas.
The Ministry’s Commissioner for Commerce and Industry, Hon. Muhammed Muktar Shuaibu, who has held the role since January 2024, directed the internal review of the framework after reading the Guardian Nigeria coverage and found it addressed a problem his Ministry had been unable to solve systematically: participants entering programmes without the readiness to benefit from them.
Government entrepreneurship initiatives routinely decide who receives limited training places, mentorship and, in some cases, capital. That makes selection itself a design decision. If a programme trains 100 participants and most drop out, the training may not be the variable that failed.
A founder’s account
Akinbambo Waleehu Ayoola runs Aquabea Global, an Abuja freight-forwarding and logistics company. He went through a PPS assessment before expanding the business.
“What the PPS Framework gave me was clarity about whether I was genuinely ready to build this business or just excited about the idea,” he said.
He had been competing largely on price and speed. The assessment pushed him instead toward what his customers actually feared about international cargo and clearing, which changed where he looked for advantage.
“I needed to go deeper on assessing myself and the problem before I went wider on the solution,” he said. “My customer is my business case study and my greatest source of learning.”
What screening can and cannot fix
A founder in Lagos, Abuja or Accra contends with currency volatility, unreliable power, fragmented distribution and thin purchasing power simultaneously. Those conditions sink businesses with good products and capable founders. Selection screening does not touch any of them.
The narrower claim is more defensible. An ecosystem that concentrates entirely on what it gives founders may pay too little attention to who receives it. Government programmes, universities, nonprofits and investors all make selection decisions under scarcity, and those decisions determine who gets scarce resources and who does not.
Nigeria’s National Youth Service Corps offers an obvious testing ground — a structured national programme reaching large numbers of young people at a formative career moment, where entrepreneurship components already exist and currently focus on skills rather than readiness.
The risk in this line of argument is worth naming. A framework built on founder resilience can slide easily into an excuse for the conditions founders are asked to be resilient about. Screening for readiness is cheaper than fixing the power supply, and a government that adopts the former while neglecting the latter has not solved anything. Founder resilience should not become a substitute for functioning institutions.
The earlier question
The familiar sequence in entrepreneurship support runs idea, training, funding, growth. Aderinwale’s proposition is that a step belongs in front of it, and that the ecosystem currently discovers whether a founder was ready only after spending money finding out.
The framework does not explain why startups succeed or fail; the structural pressures on Nigerian businesses are too large for any assessment tool to answer. But for an ecosystem operating with limited capital and limited programme places, understanding who is being funded is a cheaper question than the one it currently asks last.
#Zainab Aderinwale, #
