Measure how efficiently your startup is converting burned capital into new annual recurring revenue.
Net Burn per Month ($)
Net New ARR per Year ($)
Use this calculator to connect monthly cash burn with ARR growth efficiency.
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Add the company’s monthly net burn after revenue and operating expenses. Use a normalized month so one-time expenses do not distort the annualized burn figure.
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Add annual net new ARR after upgrades, downgrades, churn, and new customer ARR. Use the same reporting period your finance team uses for SaaS growth analysis.
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Run the calculator to see annualized burn divided by net new ARR. Review the badge to understand whether growth is efficient, fair, or needs improvement.
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Test lower burn, higher expansion revenue, or better churn outcomes. Use the scenarios to plan budget changes before a board meeting or fundraising process.
Measure whether cash consumption is turning into durable recurring revenue growth.
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Connect burn to net new ARR instead of looking at spending alone. This makes it easier to see whether growth is becoming more or less efficient over time.
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Investors often ask how efficiently a SaaS company converts capital into ARR. A burn multiple gives a concise metric for board decks, investor updates, and runway planning.
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A rising burn multiple can signal poor CAC efficiency, churn, or overbuilt operations. Catching the trend early gives teams more time to correct spend and revenue quality.
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Use the metric to compare hiring plans, marketing budgets, and expansion motions against expected ARR impact before committing scarce cash.
A burn multiple calculator measures how much cash a company burns to generate each dollar of net new ARR. It is commonly used by SaaS founders and investors to judge capital efficiency during growth.
Burn multiple is calculated as annualized net burn divided by net new ARR. If monthly net burn is $100,000 and net new ARR is $500,000, annualized burn is $1.2 million and the burn multiple is 2.4x.
A burn multiple below 1.0x is generally very efficient, 1.0x to 1.5x is often considered good, and higher multiples require closer review. Benchmarks vary by stage, market, growth rate, and fundraising environment.
A high burn multiple means the company is spending a lot of cash for each dollar of net new ARR. The cause may be high CAC, churn, weak expansion revenue, low gross margin, or operating costs that are growing faster than revenue.
Reduce burn multiple by improving sales efficiency, cutting low-return spend, increasing expansion revenue, reducing churn, tightening headcount plans, and improving gross margin. Scenario planning is useful before making major budget changes.
No. Cash burn measures how much cash the business is using. Burn multiple connects that burn to net new ARR, so it shows whether the burn is producing efficient recurring revenue growth.
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