What is Net Burn Multiple?
Cash burned to generate each unit of new ARR.
How to calculate it
Calculate Net Burn Multiple as: Net burn / Net new ARR. Pull the inputs from your connected data and track the trend over time in your dashboard.
Examples
Example 1
$1.5M net burn / $1M net new ARR = 1.5, good capital efficiency (under 2).
Example 2
$1.5M of net burn to add $1M of net new ARR -> a 1.5 burn multiple, efficient enough to make a strong case to investors.
Why it matters
Net burn multiple is the cash burned to generate each unit of new ARR and is a sharp capital-efficiency benchmark for growth-stage startups. It cuts through growth-at-all-costs narratives by asking how expensively that growth was bought. One-time revenue spikes can flatter it, so the ARR figure should be genuinely recurring.
Benchmark context
Under 1.0 is excellent and under 2.0 is good; a multiple climbing above 2-3 signals that growth is becoming inefficient.
Common pitfalls
Ignoring one-time revenue spikes.
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