Metrics
Burn Multiple
Quick definition
Net burn divided by net new ARR — a capital efficiency metric.
Burn Multiple = Net Burn / Net New ARR. Popularized by David Sacks. Under 1x is outstanding; 1–2x is healthy; over 3x is poor capital efficiency.
Related metrics terms
ARR (Annual Recurring Revenue)
Annualized value of your subscription revenue at a point in time.
MRR (Monthly Recurring Revenue)
Monthly equivalent of ARR, useful for month-over-month tracking.
Net Revenue Retention (NRR)
Revenue from your existing customer base 12 months later, including expansion and churn.
Gross Revenue Retention (GRR)
NRR without upsell — what you keep before expansion.
See this in action
Insights and tools where Burn Multiple shows up.
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