Burn multiple
Net cash burned divided by net new ARR added over the same period.
Why it matters
It answers how many dollars you consume to add a dollar of recurring revenue, which is the cleanest single measure of capital efficiency.
A worked example
Burning $2M while adding $1M of net new ARR is a burn multiple of 2.
What is typical
Under 2 is generally regarded as good at early stage. Above 3 invites hard questions about whether growth is being bought rather than earned.
Related terms
Runway
The number of months you can continue operating at your current net burn before running out of cash.
Read more →ARR
Annual recurring revenue: the annualised value of contracted, recurring subscription revenue.
Read more →CAC payback
The number of months of gross profit required to recover the cost of acquiring a customer.
Read more →Run your raise on this
VCTerminal models these terms on your real cap table, so you can see what a term sheet pays you before you sign it.
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