This article first appeared in Term Sheet, Fortune’s newsletter on deals and dealmakers. Sign up here.
The strange story of Nin Ventures took a confusing twist on Friday night.
First, some background: In November 2016, Nin Ventures, a Chicago-based venture capital firm founded by Nin Desai, announced it hired Gurbaksh Chahal as an advisor. Term Sheet and other media outlets reported on the announcement, which was notable because Chahal is a successful entrepreneur with a disreputable past. Several years ago he pled guilty to misdemeanor domestic violence and battery charges; he was later removed from his CEO role at RadiumOne, an advertising technology company. Later, he was sued for gender discrimination and accused of domestic violence at his new company, Gravity4.
The announcement of his appointment came from a press release, which included a quote from Chahal. It was sent from a woman with a Nin Ventures email address. The firm’s website features Chahal as an advisor. Nin Ventures’ website also offers “advertising opportunities” and directs queries to a Gravity4 email address. Desai appeared on NBC to defend her decision to hire Chahal, repeatedly calling him “a thorough gentleman.”
Desai, who formerly worked at Chicago private equity firm Alpha Capital Partners, founded Nin Ventures in 2014. The firm got attention for using the JOBS Act to crowdfund its investment fund. In 2015, the firm announced it raised $5 million of its $10 million funding goal. The firm does not list any portfolio companies on its site and I could not find evidence of any investments. (Likewise, Desai declines to name any investments in her NBC interview.)
ON FRIDAY, seemingly out of nowhere, the Twitter account of Nin Ventures tweeted this:
“Any legit reporter wanting unfiltered access email press@nin.vc
PS @eringriffith shame on you for writing false & baseless stories.”
https://twitter.com/NINVentures/status/863058887548825602
When I (and Dan Primack and several others) responded on Twitter asking what I wrote that was false, the Nin Ventures account responded cryptically:
“Actions don’t require words. Intelligence does not require explanations. PS: Media does need eyeballs,” and followed it up with, “Due diligence is your forte and should be…good luck!”
The “any legit reporter wanting unfiltered access” wording in Nin Ventures’ first tweet matched that of a recent tweet from Chahal (who has in the past gone on Twitter rants about fake news).
https://twitter.com/gchahal/status/860673144943759360
Chahal joined the Twitter conversation to say that he has never met or spoke with Nin Desai. He did not join the company’s advisory board, he tweeted. Similar to Nin Ventures’ tweets, he attacked me for covering the announcement, writing, “You got played.” He also claimed he has sent Nin Ventures a cease and desist order but refused to say when he sent it or produce proof of it. He explained that he never denied the announcement to the media because he doesn’t trust the media “after all the false (sic) you’ve written about me.”
One or both of them is lying. Either Nin Desai fabricated the entire thing in a bid for media attention, as Chahal claims, or Chahal was involved with Nin Ventures and no longer wants to be associated with the firm. Or they’re working together to get more media attention. Or some version of the truth that lies in the middle. Perhaps we all got played into giving attention to Nin Ventures. Perhaps by bringing it back up now, I’m getting played all over again. But I’d like to correct the record if the announcement was indeed a lie.
On Friday I reached out to every email address and phone number I could find related to Nin Ventures, including Desai, her lawyer Gary Jungels, and two different Nin Ventures PR people. Several of the associates listed on the Nin.VC website appear to no longer work with the firm, according to their LinkedIn accounts. No one has responded to me.
My questions are:
• What does the “advisor” role mean at Nin Ventures?
• Have Desai and Chahal ever been in contact?
• If Chahal never joined the board, why wouldn’t he (or his lawyer if he distrusts the media so much) deny the reports immediately?
• Why is the language in Chahal’s tweets and Nin Ventures’ tweets so similar? Did Chahal have access to the Nin Ventures Twitter account?
• Did Chahal send a cease & desist? When? Can we see it? Why won’t he share it publicly?
• Why would Nin Ventures suddenly, six months later, claim information it announced (and currently displays on its website) is “false & baseless” on Twitter?
• Why does the Nin Ventures website offer advertising opportunities, directing potential advertisers to Gravity4, Chahal’s advertising technology company?
• If Desai made it all up, what is her motivation? How did she foresee this going?
• Has Nin Ventures ever invested in a company?
Term Sheet readers often ask where we get all the information we publish in the newsletter. The 20-50 news items we include in our deal roundups come from press releases, filings, and the occasional news report. There are sometimes suspicious-sounding items that we skip. But typically, we operate under the assumption that venture capital and private equity firms do not issue fake press releases. These businesses run on their reputations. (Press release fraud is more common in the world of stock scamming but still rare even then. I can only think of one time a private equity or venture capital-related press release has turned out to be fake: The recruiting scam, which my predecessor Dan Primack identified, and which Term Sheet has since exposed on numerous occasions.)
Regardless of what is actually true in this situation, you can bet that we will not trust anything sent from Nin Ventures again. In retrospect, Desai left us a clue: In a 2015 interview with the Chicago Tribune, Desai said, “Numbers don’t lie; people lie.”
Update: Chahal posted a screenshot of a cease & desist email from his lawyer on Twitter. He declined to say when it was sent, though based on its contents, it appears to be after Desai appeared on television, which occurred around a month after the news was first announced.
https://twitter.com/gchahal/status/864185666451779585
