Abstract: Iterative innovation is of great significance for the survival and development of new ventures and the maintenance of competitive advantage as an agile strategic model for fine-tuning startup technology, and related research has attracted wide attention from both theoretical and practical field. Based on the regulatory focus theory and absorptive-capacity theory, 160 experimental subjects were selected to explore the mechanism of the realization of entrepreneurial expectations, the regulatory focus of entrepreneur and the absorptive capacity of entrepreneur on iterative innovation. The research shows that the realization of entrepreneurial expectations has a significant impact on iterative innovation; the regulatory focus of entrepreneur plays a mediating role between the realization of entrepreneurial expectations and iterative innovation; and the absorptive capacity of entrepreneur plays a moderating role between the regulatory focus of entrepreneur and iterative innovation. The conclusions are of great significance for promoting the theoretical development and related research of iterative innovation, and provide necessary theoretical guidance for the iterative innovation of new ventures.