Burn Multiple is a venture capital metric: Net Cash Burn / Net New ARR — measuring how efficiently a SaaS startup converts cash burn into new annual recurring revenue. Coined by Craft Ventures' David Sacks. Benchmarks: under 1× is amazing (every $1 burned generates $1+ new ARR), 1-1.5× great, 1.5-2× good, 2-3× suspect, above 3× needs investigation. Calculated quarterly. Burn multiple post-2022 has become the dominant efficiency metric replacing growth-at-all-costs thinking. Drives company-wide focus on efficient growth — sales productivity, marketing ROI, gross retention. Companies with low burn multiples can raise more easily and at higher valuations than peers burning more for similar growth.
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ARR
Annual Recurring Revenue (ARR) is the annualized value of subscription contracts — the standard metric for SaaS businesses.…
Break-Even Point
Break-even point is the level of sales where total revenue equals total costs — zero profit, zero loss.…
Budget vs Actual
Budget vs Actual (BvA) variance analysis compares budgeted financial performance to actual results, identifying gaps and their drivers.…
Burn Rate
Burn rate is the rate at which a startup spends cash beyond what it generates from operations, expressed…
CAC
Customer Acquisition Cost (CAC) is total sales and marketing spend divided by new customers acquired in a period.…
CAGR
Compound Annual Growth Rate (CAGR) is the constant annual growth rate that would take a starting value to…
Burn Multiple
August 22, 2026 · Aditya Gupta
Corporate Finance
Related terms
ARR
Annual Recurring Revenue (ARR) is the annualized value of subscription contracts — the standard metric for SaaS businesses.…
Break-Even Point
Break-even point is the level of sales where total revenue equals total costs — zero profit, zero loss.…
Budget vs Actual
Budget vs Actual (BvA) variance analysis compares budgeted financial performance to actual results, identifying gaps and their drivers.…
Burn Rate
Burn rate is the rate at which a startup spends cash beyond what it generates from operations, expressed…
CAC
Customer Acquisition Cost (CAC) is total sales and marketing spend divided by new customers acquired in a period.…
CAGR
Compound Annual Growth Rate (CAGR) is the constant annual growth rate that would take a starting value to…
