Start-Up Accelerator Agreement (Kenya)
START-UP ACCELERATOR AGREEMENT
Law of Contract Act Cap. 23 | Companies Act No. 17 of 2015 (Kenya)
THIS START-UP ACCELERATOR AGREEMENT ("Agreement") is made on [Agreement Date]
BETWEEN:
(1) [Accelerator Name] (BRS No: [Accelerator BRS]), of [Accelerator Address] (the "Accelerator"); and
(2) [Startup Name] (BRS No: [Startup BRS]), represented by its founding director(s) [Founder Names], of [Startup Address] (the "Startup").
The Accelerator and the Startup are collectively referred to as the "Parties".
1. PROGRAMME DETAILS
1.1 Programme: [Programme Name]
1.2 Commencement date: [Programme Start Date]
1.3 Duration: [Programme Duration]
1.4 Location: [Programme Location]
1.5 Programme benefits: [Programme Benefits]
1.6 Demo Day / investor pitch: [Demo Day Date]
2. STARTUP BUSINESS
2.1 The Startup's business: [Startup Business Description]
2.2 The Startup confirms that it has the full right, power, and authority to enter into this Agreement and to fulfil its obligations hereunder.
3. CONSIDERATION
3.1 In consideration for the Accelerator providing the programme benefits set out in Clause 1.5, the Startup agrees to the following consideration: [Consideration Type].
3.2 Equity: The Startup shall issue [Equity Percentage] of the Startup's fully diluted share capital to the Accelerator as [Share Class], to be allotted by board resolution and registered with the Business Registration Service (BRS) by filing a CR2 Return of Allotment under the Companies Act No. 17 of 2015.
3.3 Cash investment / programme fee: [Cash Investment]
3.4 Valuation cap (for convertible note / SAFE): [Valuation Cap]
3.5 Vesting: [Vesting Schedule]
4. INTELLECTUAL PROPERTY
4.1 All intellectual property of the Startup — including software code, algorithms, trade marks, patents, utility models, industrial designs, and data — developed before, during, or after the programme period belongs exclusively to the Startup and is protected under the Copyright Act No. 12 of 2001 (Kenya Copyright Board, KECOBO), the Industrial Property Act No. 3 of 2001 (Kenya Industrial Property Institute, KIPI), and the Trade Marks Act Cap. 506.
4.2 The Accelerator is granted a limited, non-exclusive, royalty-free licence to use the Startup's name, logo, and programme-related materials solely for the purpose of marketing and reporting on the programme. No ownership of the Startup's IP is transferred to the Accelerator.
4.3 Each Party shall maintain confidentiality of the other Party's proprietary information, consistent with the Data Protection Act No. 24 of 2019 administered by the Office of the Data Protection Commissioner (ODPC).
5. POST-PROGRAMME RIGHTS
5.1 Right of First Refusal: For a period of [ROFR Period] following programme completion, the Accelerator shall have the right to participate in any future investment round of the Startup on the same terms offered to other investors, up to its pro-rata equity entitlement.
5.2 Information Rights: The Startup shall provide the Accelerator with [Information Rights] financial statements for so long as the Accelerator holds equity in the Startup.
5.3 Publicity: The Startup consents to the Accelerator publicising the Startup's participation in the programme on the Accelerator's website, social media, and investor-facing materials.
6. GENERAL PROVISIONS
6.1 This Agreement is governed by and construed in accordance with the laws of Kenya. Disputes shall be resolved by: [Dispute Resolution].
6.2 Capital gains tax at 15% under the Income Tax Act Cap. 470 may apply to the Accelerator's disposal of Startup equity. Both Parties should seek advice from an ICPAK-registered tax practitioner before executing this Agreement.
6.3 This Agreement constitutes the entire agreement between the Parties in relation to the Startup's participation in the programme and supersedes all prior communications, negotiations, and understandings.
6.4 Any amendment to this Agreement must be in writing and signed by authorised representatives of both Parties.
7. EXECUTION
IN WITNESS WHEREOF the Parties have signed this Start-Up Accelerator Agreement on [Agreement Date].
Accelerator — Authorised Representative
________________
Signature
Startup — Founding Director
________________
Signature
Witness
________________
Signature
What Is a Start-Up Accelerator Agreement (Kenya)?
A Start-Up Accelerator Agreement in Kenya is a legally binding contract between an accelerator programme operator and a participating startup company (or its founding team), setting out the terms on which the startup will join the accelerator programme — including the programme duration and deliverables, the support provided (mentorship, workspace, investor networks, and technical resources), the consideration payable by the startup (typically an equity stake, a convertible instrument, or a programme fee), and the rights and obligations of both parties during and after the programme.
Kenya has established itself as the leading technology startup ecosystem in East and Central Africa, anchored in Nairobi's Silicon Savannah — a cluster of technology hubs centred around iHub, the Nairobi Garage, Nailab, the Chandaria Business Innovation and Incubation Centre at the University of Nairobi, and iBizAfrica at Strathmore University. The Kenya ICT Authority, established under the Kenya ICT Authority Act No. 26 of 2013 under the Ministry of Information, Communications and the Digital Economy, promotes startup development as part of the Kenya Digital Economy Blueprint 2019. The Kenya Private Sector Alliance (KEPSA) and the Kenya Association of Manufacturers (KAM) support private-sector accelerator programmes in agri-tech, fintech, health-tech, and clean-energy sectors.
The primary legal framework governing a Start-Up Accelerator Agreement in Kenya is the Law of Contract Act Cap. 23, which applies English common law contract principles received in Kenya through the Judicature Act Cap. 8. Where the accelerator takes an equity stake in the startup, the Companies Act No. 17 of 2015 governs the issuance and transfer of shares. The Capital Markets Authority Act Cap. 485A and the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations 2002 may apply if the equity instrument constitutes a collective investment scheme or involves a public offer of securities, though most accelerator equity deals involve private placements exempt from public offer requirements.
Where the accelerator invests through a convertible note or a Simple Agreement for Future Equity (SAFE), the instrument is structured as a loan under the Banking Act Cap. 488 (if advanced by a licensed institution) or as a private contract under the Law of Contract Act Cap. 23. Convertible notes accruing interest at commercial rates must comply with the Interest Rate Cap provisions that have been amended over time in Kenya's Finance Acts. The Income Tax Act Cap. 470 governs the tax treatment of accelerator investments: equity gains on disposal of shares may attract capital gains tax (CGT) at 15% for gains accruing from financial year 2023/24 onwards.
Intellectual property developed by the startup team during and after the accelerator programme is governed by the Industrial Property Act No. 3 of 2001 (for patents and industrial designs, administered by the Kenya Industrial Property Institute, KIPI), the Copyright Act No. 12 of 2001 (for software, creative works, and databases, administered by the Kenya Copyright Board, KECOBO), and the Trade Marks Act Cap. 506 (for brand identities, administered by the Kenya Industrial Property Institute, KIPI). The Start-Up Accelerator Agreement must clearly allocate IP ownership between the startup and the accelerator to prevent disputes post-programme.
When Do You Need a Start-Up Accelerator Agreement (Kenya)?
A Start-Up Accelerator Agreement in Kenya is needed whenever a startup company, founding team, or individual entrepreneur is accepted into a structured accelerator programme and both parties require a documented contractual framework governing their relationship throughout and after the programme period.
A Start-Up Accelerator Agreement is needed when a startup is accepted into an equity-for-services programme — where the accelerator takes a percentage of the startup's equity (typically 3–10%) in exchange for programme participation, mentorship access, co-working space, and introductions to an investor network. Without a formal agreement, disputes over the exact equity percentage, the class and terms of shares issued, the anti-dilution rights of the accelerator, and the vesting schedule for the accelerator's equity stake are common. The Companies Act No. 17 of 2015 requires that any share issuance be properly documented through a board resolution, amended articles of association, and updated register of members filed with the Business Registration Service (BRS).
A Start-Up Accelerator Agreement is required when an accelerator provides a cash investment — whether as a grant, a convertible note, or a SAFE instrument — alongside programme participation. The agreement documents the terms of the investment, the conversion mechanics, and any conditions precedent to conversion, protecting both the startup founders and the accelerator investor from future disputes.
A Start-Up Accelerator Agreement is needed when a startup joins a government-linked or donor-funded accelerator programme — such as those run under the Kenya ICT Authority's 1MIBU (1 Million by 1MIBU) programme, the Youth Enterprise Development Fund administered by the Ministry of Youth Affairs, or the Ajira Digital Programme. These programmes have specific milestone and reporting requirements that must be documented contractually.
A Start-Up Accelerator Agreement is required when a startup from outside Kenya joins a Kenyan accelerator programme. Cross-border participation raises questions of governing law, work permit requirements under the Kenya Citizenship and Immigration Act No. 12 of 2011, and foreign exchange controls under the Central Bank of Kenya Act Cap. 491 — all of which must be addressed in the agreement.
A Start-Up Accelerator Agreement is needed when an accelerator programme imposes post-programme obligations — such as a right of first refusal (ROFR) on future investment rounds, information rights, co-investment rights, or a non-compete restriction — that continue beyond the programme end date. Without a written agreement, these post-programme rights are unenforceable.
What to Include in Your Start-Up Accelerator Agreement (Kenya)
A valid Start-Up Accelerator Agreement in Kenya under the Law of Contract Act Cap. 23 must include the following essential elements.
Parties: Full legal name and registration details of the accelerator programme operator (the accelerator) — including its BRS company registration number, registered address, and KRA PIN — and the startup company's details (company name, BRS registration number, registered address, KRA PIN, and the names of the founding directors). Where the startup has not yet been incorporated, the founders are named as individual parties pending incorporation.
Programme Description: A detailed description of the accelerator programme — the cohort name or batch number, the programme commencement date and duration (typically 3–6 months), the programme location (physical location in Nairobi or other Kenyan city, virtual, or hybrid), and the programme curriculum including key milestones, workshops, demo day details, and investor pitch events.
Consideration and Equity Terms: Whether the accelerator takes equity, a convertible note, a programme fee, or a combination. For equity arrangements: the percentage of the startup's shares to be issued to the accelerator; the class of shares (ordinary or preference); the valuation at which the equity is issued (pre-money or post-money); any anti-dilution provisions; and vesting schedule. Equity issuance must comply with the Companies Act No. 17 of 2015 — the startup must pass a board resolution, file Form CR2 (return of allotment) with the BRS, and update the register of members.
Programme Benefits and Deliverables: The accelerator's specific obligations to the startup — mentorship hours per week, co-working space and facilities access, access to the accelerator's investor network, use of software tools and subscriptions, legal and accounting support, and media or marketing assistance. The agreement should state which benefits are included in the programme fee or equity consideration and which attract additional charges.
Intellectual Property Ownership: A clear statement that all IP developed by the startup team before, during, and after the programme belongs exclusively to the startup company. The accelerator should not claim any ownership of the startup's technology, software code, trade marks, or other IP. The agreement should confirm that the startup's IP registered with the Kenya Industrial Property Institute (KIPI) under the Industrial Property Act No. 3 of 2001 or the Kenya Copyright Board (KECOBO) under the Copyright Act No. 12 of 2001 is not transferred or licensed to the accelerator beyond what is necessary for programme demonstration purposes.
Confidentiality: Mutual confidentiality obligations protecting the startup's business model, technology, financial projections, and customer data — and the accelerator's proprietary methodology, investor relationships, and cohort-level commercial information. The Data Protection Act No. 24 of 2019 (ODPC) applies to any personal data shared between the parties.
Post-Programme Rights: Any rights the accelerator retains after the programme ends — right of first refusal (ROFR) on future investment rounds; co-investment rights at future valuations; information rights (receipt of quarterly financial statements); board observer rights; and any time-limited non-compete or non-solicitation obligations applicable to the startup. Post-programme restrictions must be reasonable in scope and duration to be enforceable under the Law of Contract Act Cap. 23 — restrictions that are unreasonably wide in terms of geography, duration, or subject matter may be struck down as being in restraint of trade.
Demonstration Day and Publicity: Terms governing the accelerator's right to publicise the startup's participation in the programme, use the startup's name and logo in marketing materials, and require the startup to present at the programme's investor demo day. The startup should confirm that demo day presentations do not disclose patentable inventions before patent applications have been filed with KIPI.
Governing Law and Dispute Resolution: Kenya law governs the agreement. Disputes are referred to the Nairobi Centre for International Arbitration (NCIA) under the NCIA Arbitration Rules, or to the High Court of Kenya (Commercial Division). Forms-legal.com provides this Start-Up Accelerator Agreement as a practical starting document for Kenyan startup accelerators and their portfolio companies. Under Kenya law, Section 3 of the Companies Act 2015 (No. 17 of 2015) and Section 15 of the Employment Act 2007 (No. 11 of 2007) govern the core requirements for this type of document.
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note = {Free legal document template}
}Frequently Asked Questions
Kenyan accelerator programmes typically take between 3% and 10% equity in participating startups, in exchange for programme participation, mentorship, co-working space, cash investment (if any), and introductions to investors. The exact percentage varies depending on the programme: well-funded accelerators with strong investor networks and significant cash investments (such as regional programmes affiliated with international accelerators operating in Nairobi's Silicon Savannah) may take a higher percentage, while government-linked programmes under the Kenya ICT Authority or the Youth Enterprise Development Fund may take no equity at all. The equity is typically issued as ordinary shares in the startup company under the Companies Act No. 17 of 2015, with the accelerator receiving the shares at the programme commencement valuation. Founders should carefully model the dilution impact of the accelerator equity stake on their ownership percentage, particularly if further funding rounds — seed, Series A — are planned, taking into account the anti-dilution provisions in the Start-Up Accelerator Agreement.
No. A well-drafted Start-Up Accelerator Agreement in Kenya will explicitly confirm that all intellectual property developed by the startup team — including software code, algorithms, trade marks, patents, and design rights — belongs exclusively to the startup company. The accelerator should receive only a limited, non-exclusive licence to use the startup's IP for demonstration, marketing, and programme documentation purposes during the programme period, without any ownership rights. IP developed by startup founders is protected under: the Industrial Property Act No. 3 of 2001 (patents, utility models, industrial designs) administered by the Kenya Industrial Property Institute (KIPI); the Copyright Act No. 12 of 2001 (software, creative works) administered by the Kenya Copyright Board (KECOBO); and the Trade Marks Act Cap. 506 (brand marks) administered by KIPI. Founders should register key IP assets before programme commencement to establish clear ownership prior to the accelerator relationship commencing.
Convertible notes are debt instruments that automatically convert into equity upon a specified triggering event — typically a subsequent fundraising round (the 'qualified financing round') at a pre-agreed valuation cap or discount to the round price. In the Kenyan accelerator context, an accelerator may invest a cash amount (for example, KES 2,000,000 or USD 20,000) in exchange for a convertible note rather than a direct equity stake, allowing the startup's valuation to be deferred until the next funding round. The convertible note is governed by the Law of Contract Act Cap. 23 as a loan agreement. Interest accrues at a commercial rate compliant with the Banking Act Cap. 488 and the Finance Act provisions. Upon conversion, the note converts into shares under the Companies Act No. 17 of 2015 — the startup must pass a board resolution for the allotment, file the CR2 return of allotment with the Business Registration Service (BRS), and update the register of members. The Nairobi International Financial Centre Authority (NIFCA) actively promotes Kenya as a hub for venture capital financing structures including convertible instruments.
Yes. Foreign startups are eligible to join Kenyan accelerator programmes, subject to certain practical and legal requirements. Founders relocating to Kenya for the programme duration require a valid work permit or business visa under the Kenya Citizenship and Immigration Act No. 12 of 2011, administered by the Department of Immigration Services. The Directorate of Immigration issues Special Passes, Class G Work Permits (for investors), and Class I Work Permits (for specific employment) relevant to startup founders. The Business Registration Service (BRS) allows foreign founders to register a Kenya-incorporated company (private limited company) under the Companies Act No. 17 of 2015 to participate in the programme as a local entity. Foreign founders should also consider the foreign exchange implications of repatriating profits or equity proceeds under the CBK Act Cap. 491 and the CBK Foreign Exchange Guidelines. The Kenya ICT Authority's investor relations office and KEPSA's foreign investor desk can provide further guidance on establishing a startup presence in Kenya.
Post-programme obligations in a Kenyan Start-Up Accelerator Agreement are enforceable if they are reasonable in scope, duration, and geographic coverage under the Law of Contract Act Cap. 23. Common post-programme obligations include: a right of first refusal (ROFR) giving the accelerator the right to participate in future investment rounds at the same terms offered to other investors; information rights requiring the startup to provide quarterly or annual financial statements; board observer rights allowing the accelerator to attend board meetings without voting rights; and co-investment rights allowing the accelerator to invest in future rounds up to a specified amount. Non-compete clauses (preventing the startup from operating in a competing accelerator programme) or non-solicitation clauses (preventing the startup from soliciting the accelerator's mentors or staff) must be time-limited — typically 12–24 months — and narrowly defined to be enforceable. Overly broad post-programme restrictions may be struck down by the High Court of Kenya as an unenforceable restraint of trade under the Law of Contract Act Cap. 23.
Disputes between startups and accelerator programmes in Kenya are typically resolved through one of three mechanisms specified in the Start-Up Accelerator Agreement: negotiation and mediation between senior representatives of both parties; arbitration under the Nairobi Centre for International Arbitration (NCIA) Arbitration Rules 2015, with the seat of arbitration in Nairobi and the governing law of Kenya; or litigation before the Commercial Division of the High Court of Kenya. The Arbitration Act No. 4 of 1995 (as amended) governs arbitration proceedings in Kenya, and NCIA arbitration awards are enforceable as High Court judgments. Arbitration is generally preferred in startup-accelerator disputes for speed, confidentiality, and the availability of technically experienced arbitrators familiar with the technology and venture capital sector. The High Court of Kenya (Commercial Division) also has significant experience in commercial contract disputes and regularly hears matters involving startup equity and IP ownership.
Accelerator equity investments in Kenyan startups have the following tax implications. For the startup: the issuance of shares to an accelerator in exchange for programme services may create a deemed income tax liability under the Income Tax Act Cap. 470 if the shares are issued below fair market value — the KRA may assess the difference between issue price and market value as a taxable benefit. Dividend income distributed to the accelerator is subject to withholding tax at 5% (for resident companies) under the Income Tax Act Cap. 470. For the accelerator on exit: gains on the disposal of startup equity are subject to capital gains tax (CGT) at 15% of the net gain under the Income Tax Act Cap. 470 and the Finance Act 2022/23. For convertible notes: interest payments on convertible notes to the accelerator are subject to withholding tax at 15% if the accelerator is a non-resident entity, under the Income Tax Act Cap. 470. Both parties should obtain advice from a tax practitioner registered with the Institute of Certified Public Accountants of Kenya (ICPAK) before executing the agreement.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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