Worried about due diligence, didn’t tell investors everything.

If you’re planning to file a patent the IP is important. Otherwise junking the MVP and building a new one isn’t an issue. However you may have a problem like FB/Snapchat if people who built the MVP can claim to own part of the company.

I don’t understand what you’re saying above: that the MVP is not yours, was not built on contract for you, isn’t actually yours, what?

While it doesn’t necessarily make sense to expose all to investors PRIOR to investment, if you’re still doing this after investment or with tangible offers on the table, this is something that can get you burned forever in the investor community. Startups and their investors need to be very tight – unless you are absolutely, 100%, die if you’re wrong certain that you won’t need them to help you with intros, contacts, future funding, etc.

However, if you’re referring just to the incubator/accelerator, whatever. Those guys are lending you their name and a little cash in return for a lot of equity (relatively) – and the game there is numbers. A normal angel investor theoretically needs about $1M for 25-$25K investments (the rest is for followon capital for those which look like they’re going to succeed). An incubator or accelerator is investing usually significantly less in absolute terms, is getting relatively more compared to typical seed in equity terms, but seeking a similar odds covering spread, but trading off a lengthy relationship for more churn.

If you need to rebuild it anyway and the $$ has come in, I’d rebuild it and move on. Many startups come with “baggage” but if the idea/team is strong, VC’s accept it and continue.

Facebook, Snapchat, RockYou (former company owned the IP) are just a few of the companies that came with big hairy skeletons (much more than just MVP IP issues) that once it came out in the open, the investors continued to support the original founders.