Aligning Visions, Navigating Success: Regulatory Focus and Entrepreneur-Investor Dynamics in Startups

Abstract

Exploring the critical domain of startup success, this study builds on the theoretical framework of Regulatory Focus Theory (RFT). Presented through the methodological lens of qualitative analysis, the paper was developed using the outcomes of interviews with 14 entrepreneurs and investors. The research methodology, underscored by a qualitative design, employed a purposive sampling technique to select its subjects, ensuring the representation and depth of insights. Throughout the paper, the focus is positioned on the RFT strategies of promotion and prevention in an attempt to uncover the underlying subtleties of success in the startup ecosystem. A compelling outcome is the contrast in the perception of success between entrepreneurs and investors that originate from the difference in regulatory focus between the two groups. The phenomenon not only defines the benchmarks of evaluation that each group applies to assessing startup performance but also the impact on their interaction dynamics in the trajectory of startup ventures. Moreover, the variation in the regulatory focuses of the two and their alignment or misalignment are pivotal factors that affect collaboration or conflict in the startup environment. Such findings are poised to offer a prism through which the complexities of startup success are not only understood but also strategically navigated. By interfacing RFT with empirical findings from the entrepreneurial forefront, this study contributes a novel lens to the academic discourse on startup success, carving pathways for informed strategic decision-making and policy formulation in the entrepreneurial landscape. Through this exploration, the paper aims to catalyse future research endeavours and foster a deeper understanding of the dynamics at play in the success trajectories of startups.