Burn Multiple: The Capital Efficiency Metric That Replaced Growth-at-All-Costs Burn multiple = net burn ÷ net new ARR. It measures how many dollars you burn to add one dollar of ARR. Below 1.0 is elite; above 2.0 is trouble. Burn multiple, popularized by David Sacks, measures capital efficiency in a single number: how many dollars of cash you burn to add one dollar of net new ARR. It replaced growth-at-all-costs thinking after the 2022-2023 correction and is now the primary lens investors use to evaluate whether a company deserves more capital. Read the full guide on Startup Fundraising · Find investors · Browse the Library Related guides Burn Multiple Calculator — Free Embeddable Widget for SaaS Founders Burn Rate for Startups Burn Rate vs Runway: What Investors Actually Look At Burn Rate Revenue Multiple 409A Valuations: What They Actually Do, and Why You Should Care About the Number 409A Valuation Explained for Founders 83(b) Election Guide for Founders
