I know it's been true for a while, but "pivot" is really gone from "alter part of the business while retaining certain aspects of it and the company's core strengths" to "pitch an idea in the trash and start over."
Properly pivoting an idea probably should not be too disruptive to investors' investment thesis, since the pivot is happening because a new, clearly better route has been uncovered in the process of the first idea that the team can leverage their past efforts in executing on some tangible way. If you're really going to just try a completely new idea from scratch, it would make sense to refinance the business and give investors a chance to take their money out, but that's hard to legally structure obviously and would take too much time.
So I get the sense that AZ is saying a lot of startups aren't pivoting really but just pitching and starting over too often if they fail to get initial traction quickly enough. This combined with the illiquid nature of startup investments forces them to not really know what they are investing in and be stuck with it once it materializes.
People have started to forget that startups generally take a long time and a lot of work to build momentum. It's easier to just pitch what you have and jump into the next shiny thing. Particularly when you have ridiculously long runways due to low costs and absurd valuations. I blame the ridiculous liquidity in deals right now combined with the "fail fast" culture.
The value of most FAILED startup can be salvaged from the team, you will never see a startup with a valuable/popular product gets acquit-hired.
Sure, the team has value as engineers, but a company that keeps failing with their products and keeps "pivoting" puts doubt on the value of their founders as entrepreneurs (they may still be brilliant engineers).
VCs like to invest in entrepreneurs (especially entrepreneurs who are also engineers). So the quality a VC looks for from a team is drastically different than the quality a bigger company looks for when they acquihire a team.
This is obviously not the case, otherwise VC's would not analyze the business model or product at all when making investments. On the contrary, the particular idea and plan take on a large part of the investment thesis. In fact, the pairing of the team and the idea (can this idea be executed on by this team? do they have some unfair advantage in this area?) is an important factor as well.
In other words, what you're doing here is basically redefining pivot so as to be meaningless.