The Durable Growth Imperative

“Growth at all costs” is over. 

Where high growth rates used to be the end-all and be-all for growth stage companies, what matters more today is capital-efficient growth — balancing expansion with profitability.

We call this durable growth, and it’s the basis on which we argue that growing wisely beats growing fast.

The Durable Growth Framework

We define durable growth as a balance between sustained revenue growth and profitability. In order to identify key characteristics and common behaviors associated with durable growers, we put our portfolio to the test. 

• We benchmarked our analysis on the ‘Rule of’ metric, signifying companies achieving a certain revenue growth rate and EBITDA margin summing to what is traditionally a desired ‘Rule of 40’.  

• We examined historical operating performance over 12 Quarters and 7,000+ data inputs to account for the resilience of performance over time, and in an effort to avoid the often-shortsighted insights that come from analyzing limited and outlier performance within a given year.  

• Lastly, we used our participating portfolio company survey responses to identify current KPIs that lead to actionable insights for 2025 and beyond, insights we will dive into in upcoming blogs. 

After plotting the data, a “line of durability” arose which delineated companies that had a minimum average revenue growth greater than 25% and an average EBITDA greater than 5%. We were then able to split the portfolio into two cohorts: durable growers (those above the line of durability) and non-durable growers (those below the line of durability).

The Durable Growth Spectrum 

What we found is that durable growth, like most things in life, is a spectrum. Above the line of durability emerged both a ‘pocket’ of ideal durable growers and a few outliers who, while meeting the ‘Rule of’ trend line, lived outside of the ideal pocket — what we’ve labeled as having either a growth emphasis or a profit emphasis. 

• Ideal Durability 

Companies who have achieved ideal and sustainable durable growth have found the sweet spot between growth and profitability. As with anything, moderation is key; we see durable businesses that have struck a balance between profits and growth to be poised for the most long-term success. As companies approach the middle of this zone, they are better equipped to manage growth in a healthy, sustainable manner.  

• Growth Emphasis 

Companies with a growth emphasis focus heavily on expansion (evidenced by higher operating expenses), but may not yet have the level of scale or efficiency needed for long-term sustainability. While top-line growth is undeniably important for value creation, it must be balanced with profitability to give the company the runway to navigate challenges like unexpected customer churn or macroeconomic uncertainty. 

• Profit Emphasis 

These are the durable growers who are highly profitable at the expense of their company’s growth. Their operations are perhaps too efficient, with not enough investment in sales and marketing and/or product and engineering. While profitability should be a priority, finding a balance between profitability and growth leads to greater value creation while still affording flexibility. Depending on where a company falls within this zone, it may be more productive to prioritize growth at the expense of profitability to achieve greater scale.  

As one portfolio CEO pointed out after reviewing this data, ideal durability is often only achieved after a period of overextension on either growth or profitability; it is a sort of course correction from burn- or save-first strategies. This raises a key question: What do growth stage companies need to focus on in order to move into the pocket of ideal durability? 

The Metrics that Matter 

It’s all about the (relevant) metrics. 

After a thorough analysis of over 30 key performance indicators (KPIs) from our survey data, we were able to identify a number of outliers specifically for the durable grower cohort: 

• Headcount Growth & Revenue/FTE: Durable growers cut headcount by 14% (compared to an 11% headcount increase for non-durable growers), while generating 1.4x more revenue per operating expense dollar. 

• Department Spend & Efficiency: Durable teams averaged 40% better product & engineering spend and 70% better general & administrative spend, with 2.7x better revenue return on sales & marketing spend. 

• Revenue Acquisition: Durable growers earned $451K more per account executive, thanks to higher quotas and better attainment. 

• Retention: Durable companies averaged 18% higher gross revenue retention and 22% higher net revenue retention — proving retention fuels long-term growth. 

We will discuss each of these metrics in depth in future blogs. 

Durable growth involves moving wisely into the next level, ultimately balancing both ambition and operational discipline. Companies that master this balance are rewarded with higher multiples, stronger resilience, and better outcomes. 

For a full range of insights into the durable growth imperative, download the 2025 Growth Index.