The Hidden Costs of Pivoting a Startup
Joyce Park stashed this in Tech biz
Instagram was famously a pivot from Burbn, a failed check-in app. Twitter was a pivot from Odeo, a failing podcasting platform. Slack was a pivot out of a failing game company. But you know who really benefits from a pivot? Early-stage investors.
Yeah, in many cases the cap table suffers on a pivot.
Entrepreneurs and investors exploring pivots of their company need to consider the fact that doing so cripples their cap tables, creates compensation issues and benefits VCs far more than entrepreneurs.