Burn Multiple
How much cash a startup burns to add each unit of new recurring revenue, popularized by David Sacks. Lower is more efficient.
Burn multiple = net burn / net new ARR
Why it matters
The burn multiple is a single number for how efficiently you are buying growth. In a tight funding market, investors weigh it heavily: a burn multiple under 1 is excellent, over 3 is a warning.
For example
A startup burns 4 crore to add 2 crore of new ARR in a year, a burn multiple of 2, which investors read as moderately efficient.
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Also in Starting Up
See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.
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