What is Burn multiple?

A burn multiple is a relatively new capital efficiency metric . It can be calculated by taking your net burn and dividing by your net new ARR. A higher multiple indincates the company is less efficient with capital while a lower multiple indicates it is more efficiently utilizing capital to grow. For reference, a multiple >2 is bad and <1 is really good. This metric becomes more relevant as a startup matures but it doesn’t hurt to start monitoring early and tracking progress as you find product/market fit and begin to scale. easures how much money you spend to acquire customers. It’s an important metric for SaaS companies to measure efficiency, and it helps investors get comfortable with the validity of your business.