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The Hidden Costs of Pivoting a Startup

Stashed in: 106 Miles, Startup Lessons, startup

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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.

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