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TG3 SaaS/Tools/Burn multiple
Free SaaS calculator

Burn multiple calculator. How efficiently you really grow.

A free burn multiple calculator that divides your net burn by net new ARR. The cleanest measure of SaaS capital efficiency there is and the one investors now care about more than raw growth.

The calculator

Burn multiple, live.

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Your burn multiple
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This calculator runs entirely in your browser. Nothing you enter is sent anywhere or stored. It is a quick estimate, not financial advice.

Why it matters

Reading your burn multiple right.

The burn multiple is the cleanest measure of SaaS capital efficiency there is. It asks one question. How much cash did you burn to add a dollar of new ARR? A burn multiple of 1 means you burned a dollar to make a dollar of ARR. Lower is better and in this market investors weigh it above raw growth.

Coined by Bessemer, the burn multiple cuts through vanity growth. A company sprinting on a 4x burn multiple is buying revenue it cannot sustain. One growing a little slower at 1x is building a real business. Measure it on net burn and net new ARR for the same period.

How to use it

What to do with your burn multiple.

If your burn multiple is above 2, the fix is almost never more spend. It is efficiency. Find the channel quietly bleeding cash on a blended CAC, fix payback and cut the spend buying logos instead of pipeline.

Track the burn multiple quarter over quarter on the same definition. Trending down while growth holds is the strongest signal you are building something durable. Trending up is a warning the market will eventually price in.

Common questions

What people ask about the burn multiple calculator.

What is a burn multiple calculator?+

A burn multiple calculator divides your net cash burn by your net new ARR for the same period. The result shows how much you spent to add each dollar of recurring revenue, the core measure of SaaS capital efficiency.

What is a good burn multiple?+

Under 1x is best in class, 1 to 1.5x is great, 1.5 to 2x is good, 2 to 3x is suspect and above 3x is hard to defend. The bar has risen as the market has tightened.

How is burn multiple different from CAC?+

CAC measures the cost to acquire one customer. The burn multiple measures total cash burned per dollar of net new ARR, capturing churn and expansion, not just acquisition.

Why do investors care about burn multiple?+

Because it exposes inefficient growth that revenue charts hide. Two companies can grow at the same rate while one burns three times the cash to do it.

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Burn multiple higher than you would like?

If you are burning too much for each dollar of new ARR, that is usually a marketing efficiency problem. Book a 30-minute audit and we will tell you which lever moves first. No sales sequence.

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