Understanding equity
Equity in plain Kenyan language — what it means to give away a share, and how to think about it fairly.
Equity is a promise: 'if this business is worth something one day, this share belongs to you.' That's it. This guide takes the mystery out.
What equity actually is
If you own 100% of a shop and give an investor 10%, they own 10 out of every 100 shillings of profit and 10% of the shop if it's ever sold.
Owning equity is not the same as being paid a salary. It's a share of the future, not the daily till.
How to think about how much to offer
Consider three things: how much money you need, how much of a lifeline it is, and how quickly you expect to grow.
A common range for early-stage Kenyan businesses on Build Kenya is 8–20%. Anything above 25% deserves a longer conversation with a lawyer.
Protect both sides
Always put equity in writing, signed by both parties, ideally reviewed by a legal partner from our directory.
Include what happens if the business is sold, if you take on another investor, or if either side wants to exit.
Key ideas
- Equity is a share of the future, not a salary
- 8–20% is a common early-stage range
- Put it in writing, reviewed by a lawyer
A gentle next step
Read Shareholder Agreements with a legal partner from our directory.
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