INVESTORS AND PIVOTING: HOW INVESTORS ARE PUSHING AND SHAKING ENTREPRENEURS INTO UNCERTAINTY

Entrepreneurial pivots are often framed as founder-driven responses to market uncertainty. This study challenges that view by theorizing pivoting as a relational process shaped by founder–investor dynamics. Drawing on an inductive theory-building cross-case analysis of pivots, we explore how investor relationships and funding timing influence pivot initiation, type, and execution. We find that founders seeking investment engage in more radical, product-focused pivots, while existing investors drive parallel pivots aimed at scalability—often through customer segment shifts. Crucially, pivot implementation hinges on founders’ perceptions of investor expertise and trust. Our findings advance a relational theory of pivoting, recentering investors in the strategic adaptation of early-stage ventures.