How do I calculate Burn multiple?

Use the formula(s) on this page. Keep inputs consistent by period and basis.

What are good benchmarks?

Benchmarks vary by model and stage. See Benchmarks on this page for ranges.

Inconsistent definitions/time windows; wrong basis (revenue vs gross profit).

Pitchkit

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GLOSSARY

Burn multiple

Net burn divided by net new ARR; efficiency of spend to growth.

Why it matters

Lower is better. Shows how much cash you burn to generate each dollar of new ARR.

Benchmarks

< 1x is excellent (rare); 1-2x is good; 2-3x is acceptable early stage; > 3x needs attention.

Worked example

Net burn $600k; Net new ARR $400k → Burn multiple = 600/400 = 1.5x.

Common pitfalls

Using gross burn instead of net; not annualizing properly; ignoring one-time costs.

How to show in your deck

Back to Glossary

GLOSSARY

Burn multiple

Net burn divided by net new ARR; efficiency of spend to growth.

Why it matters

Lower is better. Shows how much cash you burn to generate each dollar of new ARR.

Benchmarks

< 1x is excellent (rare); 1-2x is good; 2-3x is acceptable early stage; > 3x needs attention.

Worked example

Net burn $600k; Net new ARR $400k → Burn multiple = 600/400 = 1.5x.

Common pitfalls

Using gross burn instead of net; not annualizing properly; ignoring one-time costs.

Burn multiple

Why it matters

Benchmarks

Worked example

Common pitfalls

How to show in your deck

Burn multiple

Why it matters

Benchmarks

Worked example

Common pitfalls

How to show in your deck

Deck snippet

Formulas

FAQs

Related terms

Why it matters

Benchmarks

Worked example

Common pitfalls

How to show in your deck

Why it matters

Benchmarks

Worked example

Common pitfalls

How to show in your deck

Deck snippet

Formulas

FAQs

How do I calculate Burn?

What are good benchmarks?

Common pitfalls?

Related terms