Entrepreneurial problem-solving, particularly for complex sustainability challenges, is a socially embedded process shaped by emotions. This study explores how emotional dynamics triggered by serendipitous encounters influence entrepreneurial decision-making during the early stages of addressing ill-defined sustainability problems. Using in-depth interviews and AI-augmented reflective diaries, I uncover three social mechanisms: emotional resonance fosters connection and creativity, emotional dissonance prompts pivots and refinement, and AI-assisted sensemaking enhances reflective thought and decision-making. These mechanisms operate in a cyclical process, enabling entrepreneurs to navigate uncertainty, identify opportunities, and iteratively refine their problem space. The findings contribute to the literature on emotion regulation, and serendipity, in (sustainable) entrepreneurship, besides offering practical insights into how (sustainable) entrepreneurs can leverage emotions and AI tools to enhance their problem-solving capabilities. This research highlights the importance of socially embedded emotions in complex problem- solving to solve sustainability challenges.
