California Management Review

Abstract

Once considered rare, unicorn start-ups are now a global phenomenon. This article identifies the key motives for acquisition in unicorns and extends David Teece’s dynamic capabilities framework (CMR, Winter issue 2026) to demonstrate how founders sense, seize, and transform acquisitions to successfully scale in a winner-takes-all platform market. In this context, acquisitions serve a three-pronged purpose: one, to achieve market dominance by growing market share, by diversifying into new markets, and by matching, mitigating, or eliminating rivals; two, to access strategic resources; and three, to resolve complex, idiosyncratic, and temporal trigger points in the scaling process. In terms of organizational scaling, external stakeholders, including rival firms, business partners, and particularly investors, are essential to developing the dynamic capabilities of sensing and seizing acquisitions that drive market expansion. However, it is the founding team that is crucial to transforming the resources acquired through acquisitions to resolve trigger points. They do this by reconfiguring and recombining resources, particularly technology and know-how, and by empowering entrepreneurial teams to create unicorns with unicorns, facilitating autonomous, innovation-driven growth.

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