A leading Nigerian cryptocurrency investment platform, Bitfxt, has severed its relationship with a UK syndicate of hedge funds, Payitup Clearinghouse, after raising $15 million in seed funding from the foreign investors in February 2020.
When Bitfxt landed the investment opportunity from a foreign company last year, it seemed like a dream come through, because it was. And out of excitement, the CEO, Franklin Peters, who admitted he was beclouded by his desperation to take the business to the next level, signed an unfavourable contract agreement that later backfired.
In an exclusive conversation with Business Elites Africa’s special interview show, Masters of Industry, Peters told us his lawyers warned him against going through with the deal unless the grey areas were expunged but the desperate entrepreneur only had one thing on his mind – to scale the business at all cost. Nothing else mattered.
According to Peters, the investment deal reeked of “verbose dictions” which veiled many inauspicious terms – one of which required Bitfxt to divert from the core crypto business to the stock market and other enterprises. This was contrary to the founder’s vision for his company.
“The requirement was not very suitable for the future of what we were building…I was desperate at that point because we needed the funds. Midway into it, I started seeing what he (the lawyer) saw from the beginning and I went back to him and he said ‘it’s not too late to pull out”, Peters recalled.
The Funding method
Peters disclosed that Bitfxt and Payitup Clearinghouse adopted the Equity Swap type of funding, whereby a company uses a part of its equity to purchase a portion of another company’s equity, then the purchasing company adds some funds to aid marketing.
By opting to end the contract abruptly, Bitfxt’s finances had to take a hit. Peters added, “they charged us a certain amount for the time their legal team had put together to take the journey that far. They already gave me shares in their company, they had to take it back with some other huge benefits that came with the funding”.
Regardless of the setback, Peters said Bitfxt’s growth has been impressive as he intends to stay away from external funding temporarily. The hardcore entrepreneur is focusing on building a formidable company that would put him in a vantage position to choose the business partners he wants to pitch his tent with. And with potential investors, including banks already knocking on his door, Peters is not in a hurry for talks, at least as at the time of this interview