When Stephanie Downs, cofounder of Uncaged Innovations, a biomaterials startup creating alternatives to animal leathers, learned about the tariffs earlier this year she was forced to add manufacturing outside of the U.S. Since less than 2% of fashion goods are produced in the U.S., all of Uncaged customers are overseas and now enduring a price hike.
Like many startup founders, Downs has had to react and adjust operations and business plans based on geopolitical and economic shifts. Over half of small business leaders report negative impacts of changing tariff and trade policies as of this July, according to the WSJ/Vistage Small Business CEO Confidence Index.
Just as the pandemic forced massive shifts across sectors, today’s founders are navigating a new wave of disruptions: tariff uncertainties, declining federal grants, and changing customer behavior. The same index found that two out of five business leaders are reporting delayed orders, as well as longer sales cycles and a more carefully examined buying process. Downs has experienced similar challenges at Uncaged, with some customers canceling orders due to tariffs on materials shipping into China.
Tack and shift
These shifts aren’t always within a founder’s control—but how they respond to them is. Companies that simply freeze in uncertainty often don’t survive. Those that tack and shift their approach can manage though, and even take advantage, of the changes.
At Golden Seeds, after two decades of experience investing in early-stage women-led companies, we’ve come to view this as “swerving” and it’s just as critical—if not more so—than the dramatic course corrections that pivots imply.
The art of adapting isn’t a one-time decision. It’s a continuous process of listening, learning, and iterating. It’s important to distinguish between the two concepts.
Think of a swerve as proactive responsiveness. It’s when startups pick up on early signals—like customer feedback, market shifts, or changes in funding sources—and adjust accordingly. They are often smaller, tactical shifts that respond to new data. A pivot, in contrast, usually emerges when the product market fit hasn’t been clearly determined or the product is no longer viable. It’s a deliberate, and often high-stakes, decision to fundamentally change the product, business model, or target market.
Why Swerving Matters—Maybe More Than Pivoting
Every startup swerves. Or at least, every successful one does.
It might not be flashy. It doesn’t always make headlines. But it’s the everyday work of managing a company: testing assumptions, talking to customers, analyzing sales patterns, and adjusting accordingly. It’s also what investors are often really betting on—not just the initial idea, but the founder’s judgment and willingness to adjust when reality doesn’t match the original vision.
Failure to swerve can be fatal. Companies that rigidly stick to the original plan, even when it’s not working, tend to burn through capital and fade away. Remember, hope is not a strategy. If the company isn’t making sales targets, find out exactly why.
When the Pivot Is Necessary
Still, sometimes swerving isn’t enough. When a startup realizes the product isn’t viable or the market has evaporated, it’s time for a true pivot.
Take BentoBox, for example. Originally a marketing services platform for restaurants, the company saw opportunity—and urgency—during the pandemic. As dining rooms closed, restaurants needed digital tools for online ordering and payments. BentoBox made a do-or-die shift to become a payments and e-commerce platform, ultimately selling for over $300 million.
Lark Health is another notable pivot. Initially a consumer sleep device company, it evolved into an AI-driven nurse platform treating millions of patients struggling with chronic conditions on behalf of health insurers, employers, and PBMs. That transformation didn’t happen overnight, but it was a full reinvention that unlocked significant market potential.
These examples highlight another common thread: successful pivots often come from companies that were already good at swerving. They were listening, learning, and adapting all along—so when the time came for a bigger move, they were well positioned to act quickly.
Great founders and teams are constantly testing, refining, and asking hard questions. They sit in on sales calls. They ask why a customer said no. Is it a product issue? Is onboarding taking too long? Does it require too much manual intervention? Is it too expensive? They look for patterns in what’s working and what’s not. They make small bets, try new features, and critically, know when it’s time to either double down or switch gears entirely.
They also know how to test demand. In hard tech, for instance, that might mean getting a customer to fund development of a new feature—not just waiting and hoping a sale materializes. That kind of resourcefulness and discipline is what gives a company options when the winds shift.
Advice for Investors and Founders
For angel investors and board members, supporting a startup goes far beyond capital—it’s about recognizing when a company is at an inflection point and helping the team navigate it with clarity and confidence. That means staying close to the business, asking probing questions, and encouraging founders to test their assumptions early and often.
Swerves—those smaller, iterative shifts—should be a regular topic at the board table, not just in times of crisis. This type of creative and adaptive thinking should be a part of every board meeting. Great investors and advisers recognize that swerving is simply managing a company, it’s not a sign of failure.
And when a pivot becomes necessary, investors can play a critical role in helping leadership assess whether the product, market, or business model needs to change—and how to communicate that shift to employees, customers, and future funders. Great board members challenge, guide, and help founders course correct before the runway runs out.
Ultimately, whether you’re advising a tactical swerve or leading a company through a full-scale pivot, the goal remains the same: stay aligned with the market, respond to what the data and customers are telling you, and keep moving forward. In the world of startups, and most especially in this current economy, resilience is important—but adaptability is essential. The companies that endure and thrive are the ones that listen, learn, and evolve—over and over again.
