What he says about dilution is right. But there are other considerations: - The founders are not sure they can raise money for the new idea and they might use

What he says about dilution is right. But there are other considerations: - The founders are not sure they can raise money for the new idea and they might use the money left in the failed company. - The failed company may have users that are useful to the new idea. - The failed company may own the IPR necessary for the new idea. - There is often transaction cost connected with starting all over and almost always time.