SaaS Burn Multiple & Capital Efficiency Calculator
Calculate your SaaS Burn Multiple: Net Burn divided by Net New ARR. Evaluate how efficiently your startup turns burned capital into recurring revenue.
Calculated Results
Burn Multiple
0.75x
Efficiency Rating
Amazing (<1.0x)
Burn Multiple = Net Burn / Net New ARRAbout this tool
The Burn Multiple—formulated by venture investor David Sacks of Craft Ventures—measures capital efficiency by comparing the amount of cash a startup burns against the net-new Annual Recurring Revenue (ARR) it generates. Unlike CAC, which only evaluates direct sales and marketing spend, the Burn Multiple is fully inclusive of all company cash outflows: engineering payroll, executive compensation, office rent, infrastructure, and legal overhead. A Burn Multiple under 1.0x means your startup adds more than $1 of new ARR for every $1 burned—an extraordinary standard of capital discipline. Conversely, a Burn Multiple above 2.5x indicates that the company is burning cash ineffectively, likely masking high customer churn or over-hiring. Use this calculator to evaluate your company's capital efficiency.
How It Works
- 1Input your Net Cash Burn during the evaluation period (Gross cash spent minus revenue collected).
- 2Input the Net New ARR added during that same period (New ARR + Expansion ARR - Churned ARR).
- 3Review your calculated Burn Multiple and capital efficiency rating.
Formula & Math
Transparent LogicBurn Multiple = Net Cash Burn / Net New ARR
Worked Practical Example
Over two quarters, a startup burns $60,000 in net cash and adds $75,000 in Net New ARR.
Calculation / Steps
$60,000 / $75,000 = 0.80x
Expected Result
Burn Multiple of 0.80x (Amazing efficiency; generates $1.25 in ARR per dollar burned).
Frequently Asked Questions
What is an acceptable Burn Multiple by startup stage?+
Seed: 1.5x to 2.0x is acceptable. Series A: 1.0x to 1.5x. Series B and beyond: under 1.0x. Above 2.5x is universally considered inefficient.
How does customer churn inflate the Burn Multiple?+
Because the denominator is Net New ARR, every dollar of churned ARR reduces the denominator, rapidly driving your Burn Multiple into dangerous territory.
What is the quickest way to lower a high Burn Multiple?+
Plug customer churn immediately with automated cancellation flows and cut unproductive paid marketing channels.
Automate retention on your cancel button
BoolBul directly suppresses your Burn Multiple by stopping churn from eroding your Net New ARR denominator.
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