Both theory and practice point out how a significant number of new entrepreneurial ventures are founded by teams, highlighting the importance of researching the role of similarities or differences in the personality of founding team members regarding motivation. A stable motivational trait that every decision-maker has when reaching set goals is called regulatory focus, which consists of two independent self-regulations (promotion and prevention). Since a focus on innovation characterizes entrepreneurial ventures, the purpose of the doctoral thesis was to investigate the relationship between the (mis)match of the regulatory focus of founding team members and their business model innovation in the initial stages of doing business. New ventures also need to ensure survival in these initial stages, thus simultaneously adapting to the environment. Hence, this research also considers the situational factors (competitive intensity and relative market position) that new entrepreneurial ventures pay attention to, as they represent clear visible cues from the environment that inform their decisions regarding their business model innovation. An extensive literature review was conducted to provide a theoretical framework for research hypotheses that assume differences in the propensity of business model innovation in different types of venture’s founding teams according to the (mis)match of the regulatory focus of their members, depending on the competitive intensity and the venture’s market position. Empirical research was conducted using a quasi-experimental design with a business simulation in which the founding teams manage the new venture by making decisions about the development of their business models during eight quarters. The research was conducted on graduate students in Business Economics at a public university in Croatia, and the model was tested using hierarchical multiple linear regression. The results indicate that there are significant differences in the propensity to innovate business models among different types of teams in aspect to (mis)match of regulatory focuses of their members and that those differences depend on the competitive intensity and the venture’s market position. When the competition is intense, as well as when the venture has a better market position, the highest level of propensity to innovate the business model has a matched prevention founding team. The discussion, implications, and limitations of the research, as well as the recommendations to stakeholders in the entrepreneurial ecosystem, were provided. This research has important contributions to the theory of regulatory focus, the entrepreneurship literature, and the strategic management literature.