Desmond Astley-Cooper, a director at Turquoise International, explains how execution, timing and leadership contribute as much to start-up success as a brilliant concept – and how M&A can turn ideas into scale.
In the UK start-up ecosystem, mergers and acquisitions (M&A) are the default exit strategy for venture-backed businesses. This backdrop doesn’t just determine how investors develop their portfolios, it also shapes the strategies that founders pursue, the growth trajectories start-ups undergo, and, ultimately, drives the long-term value these companies go on to create for the economy.
While governments can set industry priorities and favour certain sectors through policy, it is venture capitalists (VCs) who make the investments that bring these ambitions to life. Limited partners (LPs) provide the funds for these early-stage ventures and expect returns that reflect the significant risk they take. Some investments will soar. Others will fail, and spectacularly so, in some cases.
Why execution and timing beat compelling concepts
Many people assume that start-ups succeed because of the originality or genius of their ideas. A compelling concept is undeniably important, but execution and timing often matter far more. Indeed, for every transformative idea, there are numerous competitors. Only a few, however, become true winners.
Management quality and strategic vision often outweigh the brilliance of a single idea. Most start-ups that succeed do so not because they have an inherently revolutionary product, but because they are guided by leaders robust enough to navigate the uncertainties of multiple financing rounds, operational setbacks, and fierce competition. Success is rarely straightforward or linear, and timing, positioning, and execution matter more than we’d perhaps like to admit.
Equally, a significant portion of the VC landscape is defined not by revolutionary, cutting edge products, but instead by companies that are acquired on their way to becoming pieces of larger ecosystems. M&A is often the mechanism through which commercial value is realised.
Lessons from DeepMind
A quintessential example is DeepMind. Founded in London in 2010 by Demis Hassabis and his partners as an AI research lab, DeepMind was acquired by Google in 2014 for roughly $500 million. Nine years later, DeepMind merged with Google’s Brain Division, expanded internationally, and now reports revenues exceeding £1.5 billion.
Critics may argue that DeepMind sold out too early, potentially missing the opportunity to become a consolidator itself. Yet, its investors saw impressive returns, and the company arguably might not have thrived without Google’s resources – its early work on neural networks would have been difficult to commercialise at scale independently.
Google recognised the strategic value of DeepMind early, using it to accelerate its AI capabilities and outpace rivals, a pattern seen repeatedly in the tech sector, from WhatsApp and Facebook to many, smaller UK successes.
The M&A route
From the investor perspective, ab exit via M&A is the primary route through which risk is mitigated, and returns are realised. A company that becomes an acquisition target before it matures into a market consolidator often does so because it has built a piece of the jigsaw that larger players need – or, of course, because it could otherwise pose a competitive threat. For VCs, this creates opportunities to capture outsized returns, while allowing the start-up ecosystem to evolve dynamically.
Increasing capital access
Yet, the broader aspiration for the UK economy is to foster homegrown companies that grow to their full potential and become consolidators themselves, rather than being absorbed into far-flung giants. Achieving this requires significantly greater capital access, both in private venture and public markets – resources that enable companies to scale without the immediate pressure of exit. While government policy can nudge capital markets in the right direction, until that funding ecosystem matures, M&A will remain the de facto exit for most UK start-ups.
Reframing success
In summary, understanding the dominance of M&A as a default exit is crucial for anyone navigating the UK start-up landscape. It shapes founder strategy and drives investor behaviour and the broader economic impact of venture- backed innovation. Recognising it does not diminish ambition; rather, it reframes how success is measured – not just in the ideas conceived, but in the paths companies take to realise value, influence markets, and fuel future growth.