How specialised consultancies can help win new business in defence

With an approximate doubling of market opportunity in defence over the next decade, commercial businesses are flocking to the market, they will have to build resilient and compliant organisations if they are to succeed. Calibre Defence and Cooper Darwin unpack the role of specialised consultancies in standing up new entities, market assessment, and risk management for the defence industry. 

By Calibre Defence in partnership with Cooper Darwin.

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The total money spent by NATO militaries on defence will approximately double in the next ten years with a significant uplift coming from European NATO as countries work to re-equip their armed forces. The Peace Dividend is widely accepted to be over, but many governments are determined to drive as much social value from the coming Defence Dividend as possible. Many companies have already sensed that this opportunity is coming, and many more will likely look to do so in the coming years. This is leading to a flood of new businesses with new ideas, others with existing products in the commercial world have decided to move into defence. And existing manufacturers are facing increased demand, and seeking out new opportunities in new territories. 

Cooper Darwin; building strong foundations

This is all good news for the ministries of defence (MoDs) that are in such dire need of new equipment, but there are challenges facing many of these companies. Notably, it is necessary to meet strict compliance standards to work with many European MoDs. The UK MoD requires entities to comply with three cyber standards; Cyber Essentials, Cyber Essentials Plus, and Def Stan 05-138. Depending on the products produced and sold, entities will have to secure the relevant ISO standards. All of this will require key policies to be in place regarding employees and quality guarantees, and in many cases, security vetting. This comes hand-in-hand with all of the basic needs of setting up a new entity, but the scrutiny is increased and the risks of mishandling this element are potentially significant. 

This is because procurement in defence begins with relationships and a loss of trust resulting from failure to ensure that all policies are in place, and that your organisation is compliant could mean missed contacts. “We specialise in setting up new entities across many different sectors,” Ed Cooper, the director of Cooper Darwin told Calibre Defence. “Our team has a range of experience, and we know how difficult and time consuming it can be to establish a compliant company in a tough sector like defence,” he added. Ed’s team blends experience from Top Tier consulting firms like BCG and EY, with long and distinguished careers in defence to help establish companies that are built for operating in high-risk markets and environments, where compliance and rigorous attention to detail in the set-up face can make or break a business. 

“We typically work very closely with a founding team to help them navigate the policies and standards that are needed in opening a business,” Ed explained. Often, it is the case that a founding team might not be aware of the policies and regulations that they need to meet, he said. This can create unforeseen challenges, as Jonathan, part of the Cooper Darwin team and formerly of the UK armed forces confirmed; “many will underestimate how long it could take to establish themselves, for an existing business moving into this sector it could be adapting their products and processes to align with defence requirements. For a new entity entering the UK market, they need to think about the right formation along with building the underlying systems and functions that enable the leadership to focus on getting their product into the market rather than worrying about the basics like bank accounts, creating high performing back office teams or UK compliant policies.” This is where Cooper Darwin aims to help companies by providing the additional personnel, expertise, and planning, that is needed to get a company up and running, allowing the founders to focus on the important work of product and business development. “We can work with companies at different stages of their journey, and that includes both brand new businesses, and existing businesses looking to set up in the UK or Europe,” Ed added. 

This is not an experience confined to the UK either, “for startups, working with the US Department of Defense (DoD) can feel like stepping into a fortress of bureaucracy — procurement is slow, compliance is daunting, and knowing who actually makes buying decisions is like navigating a maze in the dark. Yet, for those who learn to successfully navigate these hurdles, the rewards can be enormous.” Cooper Darwin works with companies to help them build the right kind of organisation to succeed with the DoD. But this is just one part of the defence ecosystem, what about investment?

Look before you leap

Before some companies make it to pitch to an MoD, they start by seeking venture capital or seed funding, aiming to propel their idea into a prototype. This is something that has been encouraged, with former Prime Minister Rishi Sunak telling funds in 2024 that investing in defence was an ethical decision, the right thing to do. Some £4 billion in private capital was invested into defence companies in Europe in 2024, a jump of 24% over the previous year. Drawn by the projected increase in defence funding, the number of defence-focused VC funds is growing, and more and more specialist funds are looking to add defence to their portfolio. Again, this is ostensibly a good thing for defence; more companies developing more products should lead to better outcomes. “But not every idea is a good one, or necessarily even valid when it comes to defence, for instance, we’ve recently been advising a Ukrainian drone company on how to attract western capital and whether they should set up operations in the UK or the EU. In that case, given the saturation of the UK market our assessment recommended knuckling down on their operations in Ukraine, they are now the preferred supplier to two brigades in eastern Ukraine,” Ed explained. This can be combined with inexperienced founders, who formulate market assessments used to inform their addressable market and potential valuation that might be very wide of the mark, for instance. In addition, a product may have low applicability to defence for a number of reasons. 

“This is why due diligence is so important. Of course all VCs and funds will know this, it is part of investing, but we aim to help them look before they leap,” Diane, a former Lieutenant-Colonel in the UK armed forces and senior member of the Cooper Darwin network said. The Cooper Darwin network and existing team supports this element providing extensive due diligence support VCs before investment, including expert and bespoke market assessments to determine the true size of the addressable market for a given product, as well as checking how solid an organisation’s foundations are. This challenge is not unique to investors; many commercial companies have taken the decision to move into defence, hoping to secure their market share. And, even seasoned defence companies have taken the decision to invest in new markets where the odds of success are stacked against them. Cooper Darwin’s team – which includes former senior members of the European and British armed forces, as well as an extensive network of seasoned business and defence analysts – is well-positioned to consult and advise on the intricacies and movements of the defence market. 

“In all likelihood, some of the new businesses and ventures in defence will fail; 25-30% of startups backed by venture capital fail altogether, according to the Wall Street Journal,” Ed said, recounting the risks associated with general investment in startups. “That means up 3-4 out of 10, the other 3-4 might break even and only a few will make substantial returns,” he added. The defence industry may skew these numbers even further; MoD contracts tend to be infrequent or may not materialise at all, even after over a year of competition. “It’s better to invest in a proper due diligence process supported by a specialist organisation and find out at that stage, rather than find out after making a significant investment along with the time and focus this comes with which could have been better spent elsewhere,” Ed suggested. 

A risky business

Finally, there is the question of risk. Companies in the defence sector operate with a different risk profile to their commercial counter-parts. Some will become the subject of adversary scrutiny, giving rise to cyber-attacks and other attempts to learn more about what they are doing. At the very least, working in the defence industry can raise a company’s profile, leading to protests or negative sentiment towards a company and its founders – especially if they are moving from the commercial world to defence. 

“Risk management is essential to any business and teams are often better at thinking about the more obvious threats that come from cyber and physical attacks,” Ed said, drawing on almost two decades in the sector. “But we help our clients establish systems that identify and manage threats holistically, this can include something simple like properly filling in an RFI or failing to understand the political and government demands that must be met before a contract can be placed,” he added. “Getting those aspects wrong can be as harmful for a business as a cyber-attack, imagine losing a tender because you forget a key piece of paperwork or realising at the last minute that you’re not eligible for a particular tender or even that you have vulnerabilities in your supply chain which impact your ability to deliver your product on time resulting in heavy penalties?” he said. 

Then there is the question of exports, and sanctions. “There are more than 20,000 sanctions in place against Russian entities and people, along with hundreds of Chinese nationals and entities that have been sanctioned. Falling foul of a sanctions designation can be disastrous,” Ed explained. Hass Automation, a producer of computer numerical control machine tools was fined a total of $2.5 million in January 2025, for violating sanctions against Russia and China, for example. “At Cooper Darwin we provide a bespoke research service to help ensure supply chains are sanctions compliant. It’s just another part of our offering to help companies – big and small – manage and reduce their risk.”

Cooper Darwin

Cooper Darwin combines top tier consulting and project management experience with world leading subject specialists to deliver what our clients need. Our delivery model is different. Experts that are totally focused on their clients. No bloated teams, giant overheads or hidden costs resulting in great value and high quality delivery. If you would like to learn more about Cooper Darwin and its defence offering, contact Ed and his team via info@cooperdarwin.com. 

Credit for the lead image is Jack Eckersley/UK MOD © Crown copyright 2023. It shows a worker at BAE as he cuts steel for HMS Birmingham. The UK is investing in many new capabilities providing new opportunities for decades to come. Establishing a stable and capable entity will be key to a successful relationship with the MoD, however.