# Aggressive Pivots and Entrepreneurial Skill

**Source**: https://bm.hkust.edu.hk/bizinsight/2026/01/aggressive-pivots-and-entrepreneurial-skill
**Parent**: https://bm.hkust.edu.hk/bizinsight

[ [Innovation and Entrepreneurship](https://bm.hkust.edu.hk/bizinsight/innovation-and-entrepreneurship "Innovation and Entrepreneurship") ]

Aggressive Pivots and Entrepreneurial Skill

29 Jan 2026

LI, Xuelin

[SZYDLOWSKI, Martin](https://bm.hkust.edu.hk/faculty/szydlowski-martin)

Associate Professor

[Read Full Paper](https://pubs.aeaweb.org/doi/pdfplus/10.1257/mic.20240075)

We study pivots as signaling devices in a dynamic experimentation model. An entrepreneur receives funding from an investor and has private information about a project, which requires costly experimentation to succeed. The entrepreneur has a real option to pivot, i.e., to abandon the project and to start a new one. Investors learn about the project from the arrival of exogenous information and from the entrepreneur's pivoting decisions. We characterize signaling equilibria in which high-skill entrepreneurs pivot early. Such early pivots are associated with higher likelihood of success and with more favorable funding terms following the pivot.