African Startups Face U.S. Regulatory Hurdles – Yusuf Olalere, Legal and Business Consultant

By Tosin Clegg

As African startups continue to attract international funding, many are struggling with the complex legal requirements of scaling into the United States. According to business and legal consultant Yusuf Olalere, regulatory alignment—not product innovation—is now the most overlooked factor for companies expanding beyond the continent.

“A lot of startups underestimate the U.S. compliance environment,” Yusuf said. “They focus on building, which is important, but skip over data handling rules, licensing issues, or the legal structure investors expect.”

Yusuf, who works with growth-stage startups across Nigeria, Kenya, Ghana and Rwanda, supports founders with cross-border structuring and regulatory reviews. He says emerging sectors like AI, fintech, and digital infrastructure are especially exposed to new legal risks in the U.S.

“For AI-enabled platforms or digital wallets, it’s no longer optional to think about privacy, liability, or bias,” he said.

He cited examples where early-stage companies had to delay investment conversations due to unclear IP ownership or missing policies around user data.

“A founder once told me they were ready to raise from U.S. investors. But their AI tool used third-party datasets without terms in place, and they hadn’t defined algorithmic responsibility. That alone made the investor pause.”

Yusuf says the pressure is also coming from regulators. “You’re seeing increasing U.S. scrutiny of models trained on sensitive data, crypto-backed business models, and tools used for hiring or credit scoring. African startups working in these spaces are not exempt.”

When asked what most startups get wrong, he listed three things: failing to register IP properly, confusing Delaware incorporation with full legal readiness, and ignoring consumer protection frameworks.

He advises startups to integrate legal thinking earlier in their build cycle.

“It’s not about law slowing innovation. It’s about building a company that can stand up to real diligence.”

Yusuf recently worked with startups building AI diagnostics, credit scoring tools, and token-based platforms—all requiring both legal grounding and investor-facing clarity.

“You can’t tell a U.S. fund that you’ll sort legal issues later. It becomes a risk factor. Founders who solve that early stand out.”

As global capital shifts toward regulated sectors, he believes legal readiness is no longer optional.

“If your product is ambitious, your legal story has to be just as clear.”