Burn Multiple Calculator
See how much cash you burn for every unit of net new ARR, the capital efficiency metric investors watch.
Burn multiple
What it measures
Burn multiple divides net burn by net new ARR for the same period. It asks a blunt question: what does a unit of growth cost in cash?
Why it matters
In tight markets this is the efficiency metric that decides whether the next round happens. It punishes churn and bloated spend in one number.
A worked example
Burning 300,000 in a quarter to add 200,000 of net new ARR is a 1.5x burn multiple: acceptable for early stage, heavy later.
How to read and improve it
Under 1x is excellent, 1 to 1.5 good, 1.5 to 2 workable early on, and past 3 signals the model is not yet working.
Frequently asked questions
What counts as net burn?
Cash out minus cash in for the period, before financing. Use the real bank movement, not accounting profit.
Why net new ARR?
Because churn should hurt the metric. Gross new ARR would let a leaky business look efficient.
More in SaaS metrics: SaaS CAC Calculator · Customer Lifetime Value Calculator · Churn Rate Calculator
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