There are many studies of how acquisitions of small technology based startups and firms affect innovation growth and performance but less attention on how acquisitions affect the innovative behavior of the acquired firms. This paper explains changes in the innovative behavior of acquired technology-based small firms from an innovation governance perspective. An interview based case study of founder and top managers of three acquisitions by a Swedish medium-sized IT company from an insider-outsider perspective found that innovative efforts shifted from building a company to an incremental product innovation focus, by means of accumulation of continuous hardware and software upgrades. This “acquisitional” termination of innovative and entrepreneurial behavior is explained by a shift in vision from firm creation by founders (owners) to a product-oriented vision driven by product managers. This vision framed the underlying dimension of discovering opportunities, which became oriented towards improved product performance and was executed by formal and informal steering relating to incremental product innovations. Capability creation related to product and marketing to support the product-oriented business units. The paper suggests that the focus on Schumpeterian innovative behavior of acquired entrepreneurial firms from an innovation governance perspective is a useful new way of analyzing technology-based acquisitions.