YC-Backed Company Pivots To A New Business

- Redesign Company ownership structure to reflect the Company’s current business stage and goals

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- Ensure that founding team is adequately incentivized to drive Company growth and successfully obtain future fundraising

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- Align existing investors with the Company’s fundraising targets and strategy

- Identified a structure amenable to investors that aligned founder ownership with Company goals

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- Equitably allocated benefits to existing investors for their early participation

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- Aligned the Company’s ownership structure with future investor expectations

Investor conviction connects their past and their future.

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After three years of operating, the Company pivoted from rebuilding consumer-delivery to revolutionizing one of its country’s agricultural industries.

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The Company’s investors – ranging from angels to widely-known institutions – supported the business transition. However, the team faced the challenge of reconciling the Company’s pre-pivot ownership structure with the new post-pivot direction.
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Onsen helped the founders identify a recapitalization strategy that addressed the needs of existing and new investors along with the founding team – building a long-term viable cap table for the Company.

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Committing to a new business direction

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The Company’s original effort launched in 2019 to transform a $100B+ commercial delivery market in SE Asia.

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The Company’s co-founders raised over $6M between 2019 and 2022, including from notable investors such as Y Combinator.

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In late 2022, the team shifted business strategy to serve as a distribution and processing enabler to a segment of the agricultural industry in their home market. They informed their investors of the new strategic direction and received overwhelming support to continue building.

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Roughly a year after the strategic shift, the Company rebranded, formally marking the change from grocery delivery to processing and distribution in their market.

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Balancing stakeholders

As the business evolved, balancing stakeholder interests remained top of mind for the Company’s founders. They wanted to reward their existing investors, prepare for new investors, and ensure that they as the founders retained enough ownership of the Company to continue it.

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The team recognized that the Company's ownership structure reflected the original business’ more mature business stage – not the new business after the Company pivot.

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Together with Onsen, the founders modeled several fundraising and recapitalization scenarios to understand various paths forward. The solution needed to go beyond satisfying existing investors to lay the groundwork for future financing and preserving founder equity – it also needed to do so in a way that was administratively feasible and clear to investors.

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Building on progress

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Alongside the founders, Onsen met with the Company’s key investors to communicate the proposed recapitalization strategy. After obtaining buy-in, the Company and Onsen shared the plan with remaining investors and began to put it in place.

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With the restructuring successfully behind them, the founding team is focusing on building the post-pivot venture. The recapitalization allowed them to continue their business without having to return capital and seek fresh financing, to strengthen investor relationships, and to ensure their long-term financial interests remain with the Company.