Defence procurement is opening to scale-ups faster than at any point in the last forty years. The way scale-ups actually work with primes is not yet well understood by either side.
The prime-scale-up relationship in defence is now a critical commercial channel for European defence tech — and the operating moves that make it work are specific, learnable, and rarely natively understood by either party.
Primes and scale-ups have different operating models, different risk tolerances, different time horizons, and different cultures. The prime is structured for large, multi-year programmes with predictable margins and risk-managed innovation. The scale-up is structured for rapid iteration, capital-efficient growth, and bounded technical risk.
The procurement structures both parties operate within compound the difficulty. Primes are accountable for programme delivery to government customers. Scale-ups need cash flow and reference customers. Neither party's incentive structure naturally serves the other's, which is why initial engagements often start well and stall in the middle.
The prime-scale-up relationships that produce real outcomes share three features. They have explicit operational protocols — not just commercial contracts — covering how the two organisations integrate on programmes. Joint integration leadership is named on both sides. Escalation paths are pre-agreed.
They have aligned commercial structures that recognise the scale-up's cash flow needs and the prime's programme accountability — typically through milestone payments structured for both parties' realities. And they have invested in the bridging capability: people on each side whose job is to translate between the cultures, often with experience of working at the other type of organisation.
For primes engaging scale-ups, three moves matter. Assign a senior, accountable programme owner — not a vendor manager. Build commercial structures that recognise scale-up economics. Invest in bridging capability internally. For scale-ups engaging primes, three different moves matter. Hire or contract for prime-fluency in the leadership team — typically someone who has worked on a prime side previously.
Treat the prime as a programme partner, not a customer — with the operating discipline that implies. And be honest about which capabilities the scale-up needs to develop to be programme-grade. The scale-ups that get this right are pulling ahead of competitors with similar technology but weaker prime engagement.
This is the kind of problem we work on. If you are leading a prime-scale-up relationship that has not yet produced programme-grade outcomes, the team at Grant & Graham would be pleased to talk. We provide operating-model design and partnership advisory across defence procurement to European defence primes, scale-ups, and dual-use investors. Contact us.