Every Startup Falls Into One of These Four Archetypes — Which One Are You?

In every board meeting, investor pitch, and strategic planning session, two forces compete for attention: growth and financial discipline. Founders who chase growth at all costs end up with impressive top-line numbers and empty bank accounts. Those who over-optimize for efficiency often find themselves running a profitable business that nobody wants to acquire.

The most valuable startups master both. But where does your company actually stand?

At Rubric Financial, we have worked with hundreds of startups across stages and sectors. Through that experience, we have developed a framework that categorizes every startup into one of four archetypes based on two dimensions: Offense (growth velocity, market capture, revenue expansion) and Defense (unit economics, cash efficiency, financial controls).

Understanding your archetype is the first step toward improving your position and, ultimately, your valuation.

The Two Dimensions

Offense: Growth and Market Capture

Offense measures how effectively a company is expanding. The key metrics here include:

Annual Recurring Revenue (ARR) growth rate -- the percentage increase in recurring revenue year-over-year
Net Revenue Retention (NRR) -- whether existing customers are spending more or churning away
Customer Acquisition Cost (CAC) efficiency -- how much it costs to acquire each new dollar of revenue
Market share trajectory -- whether the company is gaining or losing ground relative to competitors

A startup scoring high on offense is landing new logos, expanding within existing accounts, and demonstrating clear momentum.

Defense: Financial Discipline and Resilience

Defense measures how well the company manages its resources. Key metrics include:

Burn multiple -- net burn divided by net new ARR (lower is better; under 2x is strong)
CAC payback period -- how many months it takes to recoup the cost of acquiring a customer
Gross margin -- revenue minus cost of goods sold, expressed as a percentage
Unit economics -- whether each customer is individually profitable once fully ramped
Cash runway -- how many months the company can operate at current burn

A startup scoring high on defense has clean books, predictable cash flows, and a clear path to profitability.

The Four Archetypes

1. The Scrappy Startup (High Defense / Low Offense)

Profile: Resourceful, lean, surviving -- but not scaling fast enough.

Scrappy startups are capital-efficient by necessity. They have strong gross margins, low burn multiples, and tight cost controls. The founders know every line item in the P&L. But revenue growth is modest, often below 50% year-over-year, and new customer acquisition has plateaued.

Typical metrics:

Burn multiple below 1.5x
CAC payback under 12 months
ARR growth under 40%
NRR between 95% and 105%

Fundraising impact: Investors respect the discipline but worry about the ceiling. Valuations for Scrappy startups tend to be modest -- often 5-8x ARR -- because the growth story is unclear. The most common investor feedback is, "We love the economics, but show us you can scale."

What to do: Invest selectively in growth. Test new channels, expand the sales team, or move upmarket. The financial foundation is solid -- now it is time to build on it.

2. The Aggressive Startup (High Offense / Low Defense)

Profile: Strong growth, impressive headlines, fragile fundamentals.

Aggressive startups are growing fast -- often 100%+ year-over-year -- but burning cash at alarming rates. They may be acquiring customers below cost, subsidizing usage, or spending heavily on sales and marketing without clear unit economics.

Typical metrics:

ARR growth above 100%
Burn multiple above 3x
CAC payback over 24 months
Gross margin below 50%

Fundraising impact: In bull markets, Aggressive startups command premium valuations -- sometimes 20-40x ARR. In tighter markets, they struggle. Investors have learned (painfully) that growth without a path to profitability is a liability. The 2022-2023 correction punished this archetype severely.

What to do: Focus on unit economics without killing momentum. Identify your most profitable customer segments. Improve gross margins. Reduce CAC by investing in product-led growth or inbound marketing. Show investors that efficiency is improving quarter over quarter.

3. The Durable Startup (High Offense / High Defense)

Profile: The gold standard. Strong growth built on a sound financial foundation.

Durable startups grow revenue at 80%+ while maintaining burn multiples below 2x and CAC payback under 18 months. They have strong NRR (above 120%), healthy gross margins (above 70%), and clear visibility into future cash flows.

Typical metrics:

ARR growth above 80%
Burn multiple below 2x
CAC payback under 18 months
NRR above 120%
Gross margin above 70%

Fundraising impact: Durable startups command the highest valuations in any market. They are the companies that receive term sheets in days, not months. In the current environment, Durable startups are seeing 15-25x ARR multiples with favorable terms. They have options -- and leverage.

What to do: Stay the course but prepare for scale. Invest in infrastructure, hire ahead of demand, and build the financial reporting systems that will support the next stage of growth. This is the archetype every startup should aspire to reach.

4. The Stagnant Startup (Low Offense / Low Defense)

Profile: Flat growth, weak economics, limited options.

Stagnant startups are neither growing nor operating efficiently. Revenue has plateaued, margins are thin, and burn continues without meaningful progress. These companies often have product-market fit issues, competitive pressure, or leadership gaps.

Typical metrics:

ARR growth below 20%
Burn multiple above 4x (or negative if shrinking)
CAC payback over 30 months
NRR below 90%
Gross margin below 40%

Fundraising impact: Stagnant startups face the toughest fundraising environment. Valuations are often flat or down, and investors may push for structured terms (liquidation preferences, ratchets, pay-to-play). Some companies in this quadrant face acqui-hire offers or wind-down discussions.

What to do: This requires honest assessment. Is the core product viable? Is the market large enough? Sometimes the answer is a pivot. Sometimes it is a restructuring. In all cases, the first step is building a realistic financial model that identifies the path forward -- or confirms there is not one.

How to Assess Your Position

To determine your archetype, gather the following data points and score yourself honestly:

| Metric | Strong | Moderate | Weak | |---|---|---|---| | ARR Growth | Above 80% | 40–80% | Under 40% | | Burn Multiple | Under 1.5x | 1.5–3x | Above 3x | | NRR | Above 120% | 100–120% | Under 100% | | CAC Payback | Under 12 mo | 12–24 mo | Above 24 mo | | Gross Margin | Above 70% | 50–70% | Under 50% |

If your offense metrics (ARR growth, NRR) are strong and your defense metrics (burn multiple, CAC payback, gross margin) are also strong, you are Durable. If one dimension is strong and the other weak, you are either Scrappy or Aggressive. If both are weak, you are Stagnant.

The Path Forward

The most important insight from this framework is that your archetype is not permanent. Companies move between quadrants as they mature, raise capital, or shift strategy. The goal is to understand where you are today so you can make deliberate choices about where to go next.

Aggressive startups can become Durable by improving unit economics. Scrappy startups can become Durable by investing in growth. Even Stagnant startups can recover with the right strategic and financial leadership.

At Rubric Financial, we help founders understand their archetype, identify the highest-leverage improvements, and build the financial infrastructure that supports long-term value creation. Whether you need a fractional CFO to own your financial strategy or a ClariFi-powered dashboard to track these metrics in real time, we can help you move toward Durable.

Because in the end, investors are not just buying your revenue. They are buying the system that produces it.