Our focus on durability reflects the fact that today’s market rewards operational efficiency and resilience over reckless growth. The most durable companies are not only managing margins; they are also managing cash. This is why, in addition to durability levers like retention, go to market efficiency, and OpEx, there is one more lever that we’d be remiss not to explore: working capital.
Perhaps the most overlooked ingredient for true durability, strong working capital means more control over your runway, more flexibility in your operating plan, and more capacity to reinvest — all without raising a single extra dollar of external capital.
What is Working Capital, and Why Should You Care?
As a refresher, working capital equals your company’s current assets minus its current liabilities. In practical terms, it reflects how efficiently your business can fund day-to-day operations. For growth-stage B2B companies (especially SaaS companies), working capital boils down to a few key points:
Too often, founders focus on top-line growth while overlooking whether that growth is actually cash-efficient. That tradeoff might have been tolerable during the zero-interest-rate policy (ZIRP) days, but it isn’t anymore. In today’s market, cash-efficient models are often outperforming faster-growing but cash-burning peers. And all of that matters to investors and potential buyers.
The Durability Difference
Our 2025 Growth Index spotlights a critical difference between durable and non-durable companies: cash flow profile. Specifically, durable growers are far more likely to have favorable working capital dynamics, including:
Compare that to non-durable companies, which often operate with:
So what does this all mean?
Durable companies — those with favorable working capital dynamics — have greater flexibility to weather shocks, fund growth bets, and improve their valuation profile. In fact, 75% of Edison’s most durable companies — the ones projected to return 3x+ — also show strong working capital performance. These are the businesses investors want to back and acquirers want to buy.
Four Ways to Improve Your Working Capital Position
If your business is operating with tight cash margins or waiting too long to collect revenue, here are four things you can try to shift the balance:
Driving towards durability can make all the difference for your company, and working capital is one of the most controllable — and overlooked — ways to get there. Ask yourself: What would better working capital unlock for our business this year?
For more insights on durable growth, download the 2025 Growth Index.