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.
Worth your time
Related terms
Go deeper
See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.
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