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GetEquity's response to WeeTracker revives a forgotten feud
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Last month, a WeeTracker article on GetEquity, a startup that allows retail investors to buy equity and trade secondaries in African startups was published. It was in tune with much of the coverage about Nigerian startups in the last couple of months; it was critical, asked hard questions and led with a weighty title. Yet, it rubbed Nigerian founders the wrong way and the pushback was definitely more than the publication could have envisaged.
At the time, I said that it was harsh to conclude that the author of the piece had malicious intentions. Here are my words from a May 27 newsletter: “In a matter of minutes, a number of influential founders piled on the author of the piece and promptly branded it a “hit job.” It remains a curious conclusion for a couple of reasons.”
The pushback against the article was so swift that it was the subject of WeeTracker’s Bi-weekly newsletter on May 27. The author of the article, Henry Nzekwe also had to clarify the objectives of the article. Henry tweeted: “Quite a bit of talk about the objective of this article. It is to foster accountability and entrench best governance practices. It is to keep people honest and encourage them to not only do the work but to do it well. If we don't hold people accountable, it doesn't get better.”
Despite the initial furore, the article and the issues it raises were out of the news cycle in less than 48 hours. One theory is that compared to the other scandals we have seen this year–allegations of sexual harassment at Flutterwave, allegations of workplace bullying at Bento–this felt like lighter stuff. So it was surprising to see Jude Dike, the CEO of GetEquity responding to the article a month later to accuse Henry Nzekwe of defamation and Peter Oriaifo, a Principle at Oui Capital of being a source for the story.
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The crux of his response was that the writer, Henry Nzekwe acted in bad faith, acting on information received from Peter Oriaifo. In a follow-up conversation, Jude told me, “I’m only responding now because that article was the beginning. I have been answering questions for over a month on some of the claims made by the writer. The article made extensive references to false statements only Peter Oriaifo could have disclosed; for instance, Peter reached out to Wefunder to try to scuttle a recent partnership.”
Jude says that GetEquity’s partnership with Wefunder is still on and disagrees with the article’s claim that his startup has not been engaging regulators over getting licenced. Jude also denies the article’s claim that he is the CTO of Zedi Africa; “that false claim implies that GetEquity’s founders have some sort of exit strategy in place.”
Henry Nzekwe has now stated that Peter was not a source for his WeeTracker story. In addition, Peter denied all of Jude’s claims, sharing that last year, he had passed on investing in GetEquity. “I passed [on the investment] because of regulatory reasons but stayed in touch to help bridge the gap. I used to be at Republic so it wasn’t out of the ordinary that people asked me for advice.” Peter also shared that contrary to Jude’s claims, he has never invested in an equity crowdfunding startup.
Another big claim is that Peter had reportedly asked other investors to not invest in GetEquity. “Who am I to say steer clear? Even for companies that I pass on, I can’t say that. I’m not the mafia. But I’m firmly embedded in the ecosystem and VCs and founders alike ask my thoughts or advice on a host of things. On a few instances, they ask about GetEquity - I can’t lie we’re in a reputation business so I say, “Hey, some things that may need some review - loop a securities attorney in if you choose to do it.”
The regulation Peter alludes to is most likely a securities provision that spells out how businesses incorporated in the U.S. can raise money from unaccredited investors. It’s unclear how GetEquity’s issues with Peter will be resolved, as there’s hardly a legal recourse for what they’re accusing him of.
But the startup is accusing WeeTracker and Henry Nzekwe of defamation. One part of a letter from GetEquity’s lawyers which I saw, reads, “This statement in all its entirety is untrue and portrays our Client as a get-rich-quick scheme intended to avoid all regulatory compliance in other to swindle people of their money. This is defamatory to our Client and totally unacceptable.” The startup has now given WeeTracker two days to retract some of the claims in the article or face legal action.
In the end, there’s very little doubt in my mind that GetEquity is choosing to make its response a public–and Twitter affair–because the claims made by the article were largely circulated on social media. Yet, my sense is that a more robust response by GetEquity would simply be to disprove all of the claims made by WeeTracker. A copy of an email showing correspondence with regulators can suffice here, and some other proof that it complies with some regulation or the other in the U.S or Nigeria. Between the complexities and expense of a legal wrangle and how quickly it fades from public consciousness, it makes me sceptical that this is the counter that it is intended to be.
See you next week!
Edited by Jimi Osheidu & Alexander Onukwue
*Disclosure: GetEquity ads have appeared in the Notadeepdive newsletter and I have a personal relationship with the startup’s founders.