Defense startups get acquired by primes before reaching scale, removing competitive pressure

The typical defense startup trajectory is: raise VC → win a few SBIR/OTA contracts → get acquired by a prime at Series B/C before reaching $100M ARR. Since 2018, Lockheed, Northrop, L3Harris, and Anduril have acquired 30+ defense tech startups. Each acquisition removes a potential competitor from the market before it can challenge the prime's incumbency on major programs. VCs encourage early acquisition because defense revenue cycles are too slow for typical VC return timelines. This persists because the defense market has structural barriers to independent scaling (clearances, SCIF, FedRAMP, prime subcontracting relationships) that make acquisition the path of least resistance, and no antitrust framework evaluates defense acquisitions through a competitive innovation lens.