Burn multiple
Burn multiple is a cash and runway metric, calculated as Net burn ÷ Net new ARR, over the same period.
- Layer
- Metric
- Defined in
- Metric definitions
- Nearby
- 15
Authority
This definition follows Non-GAAP financial measure — SEC Regulation G — it is not a GAAP measure, so a registrant publishing it has to reconcile it to the nearest GAAP figure.
Every citation in this system, with the text we read and the date we checked it, is in US GAAP and where these rules come from.
Formula
Net burn ÷ Net new ARR, over the same period
Efficiency; lower is better — under 1× is excellent, over 2× is a warning (David Sacks's bands). Undefined when net new ARR is zero or negative.
A metric without its definition is a number people argue about in meetings. Every metric component in this system requires one — see the rules.
Burn multiple, in use
Quoted from the document that use the word — what it does to an interface, in the spec's own sentence.
If the quarter's net burn of $690,000 bought $460,000 of net new ARR, the burn multiple is 690,000 ÷ 460,000 = 1.5×.
For founders
The same idea written for a founder: what it costs a startup that ignores it, and what to do in a real month.
- Burn multipleNet burn divided by net new ARR over the same period. It says how many dollars you burned to add a dollar of recurring revenue. Lower is better. It's a metric, not a GAAP figure.
- Burn rate and runway: how to calculate them correctlyGross burn, net burn and months of runway, done the way an investor checks them: from cash, averaged, and with the hires you’ve already committed to.
Nearby in the catalog
No component names this concept outright. These are the ones in its part of the system, which is a weaker claim — but a component nothing links to is a component nobody finds.
7Dashboard & charts
Family spec- MetricDefinitionEvery metric requires one. Formula with values substituted.
- NonGaapReconciliationEBITDA below net income, every adjustment named.Spec
- MrrBridgeThe movement, not a single number with a percentage.Spec
- BudgetVsActualPolarity-aware, materiality-filtered, versions tracked.
- ForecastTableProjections dashed and labeled everywhere.
- CovenantMonitorThe contractual definition, not the generic one.Spec
- KpiHealthStripProvisional marking for pre-close numbers.Spec
- RevenueTrackerRevenue by stream, with mix, growth and concentration.
- ExpenseTrackerSpend by category on three bases. Polarity derived per row from the sign convention.
- DriverModelThe inputs a forecast is built from, and what they produce.
- ScenarioCompareScenarios side by side, all measured against the base.
- PlByDimensionThe P&L cut by department, entity or product.
Terms this one depends on
Also in Cash & runway
Defined in Metric definitions. This page is generated from that document, so the two cannot disagree.