Burn Multiple
Burn Multiple: Net burn divided by net new ARR. Popularized by David Sacks.
Formula
Burn Multiple = Net burn / Net new ARRBenchmarks
- Below 1x: Excellent (top 10% of Series A companies)
- 1.0-1.5x: Strong (top quartile)
- 1.5-2x: Median, acceptable
- 2.0-3x: Concerning, especially above $20M ARR
- Above 3x: Critical, requires immediate attention
What It Tells You
How much cash is being burned to generate each dollar of new ARR.
GASP Standard v1 · Last updated