Technological innovations open opportunities for new entrants (techno-entrepreneurs) to transform and recreate industries, as they come as so-called innovation shocks. These shocks can change technology trajectories and make irrelevant existing regulatory frameworks. It is unclear, however, what the interplay between technology evolution, entrepreneurship, and regulation is. We explore the case of the emergence of the drone industry to extract insights on how different profiles of new entrants respond to distinct regulatory frameworks, aiming to decipher the effect that those regulatory frameworks have on the exploration and development of new tech-based innovation opportunities. Our findings suggest that more attention should be given to the impact that regulatory responses can have on the short- and long-term development of emerging technological fields. We propose a process framework to make sense of the possible outcomes of distinct regulatory responses, elaborating on the consequences they have on entrepreneurial activity and overall market growth.