How the burn multiple calculator works
This free burn multiple calculator measures growth efficiency - how many dollars you burn for every dollar of net new ARR you add. Enter your quarterly net burn plus starting and ending ARR to get your multiple and see where it lands on the standard SaaS benchmark bands. No signup required, and results are shareable via URL.
Burn multiple became the defining efficiency metric of the post-2021 fundraising market. Investors screen on it because it captures everything - churn, gross margin, sales efficiency - in one number.
The formulas
Net new ARR = ARR at end of period - ARR at start
New and expansion ARR minus churn and contraction - use the net figure, not gross bookings.
Burn multiple = net burn / net new ARR
Dollars burned per dollar of durable new revenue. Lower is better.
Benchmarks founders should know
- Under 1x: amazing - you add more ARR than you burn
- 1-1.5x: great
- 1.5-2x: good
- 2-3x: suspect - investors will ask hard questions about where the money goes
- Over 3x: critical for a venture-backed startup
Frequently asked questions
What is a burn multiple?
Burn multiple is net burn divided by net new ARR over a period, usually a quarter. It is the standard capital-efficiency metric for venture-backed startups, popularized by David Sacks: how many dollars you burn for every dollar of durable new revenue you add.
What is a good burn multiple?
Under 1.5x is great, 1.5-2x is good, and over 3x is a red flag for investors. Under 1x means you are adding more ARR than you are burning - exceptional capital efficiency.
Burn multiple vs runway - what is the difference?
Runway measures survival time: how many months until the cash runs out. Burn multiple measures whether the burn is buying growth: dollars burned per dollar of net new ARR. Investors want both - a long runway with a bad burn multiple just means dying slowly. Calculate your runway at accelerator.tools/calculators/runway.
How do I improve my burn multiple?
Grow net new ARR - fix churn and drive expansion revenue - or cut burn that is not producing pipeline. Because the metric nets out churn and contraction, retention improvements often move it faster than new bookings.
Is this burn multiple calculator free?
Yes. The Accelerator.tools burn multiple calculator is completely free, requires no signup, and results can be shared or embedded via URL.
Last updated July 2026 by the Accelerator.tools editorial team. Explore more free tools in the calculator library or browse the community-voted tool directory.