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 classic example was PicPlz and Burbn (renamed Instagram after the pivot), the VC in question was a16z
In other words, what you're doing here is basically redefining pivot so as to be meaningless.