# Burn Multiple Calculator

> Burn Multiple: Burn multiple = net burn ÷ net new ARR (same period). Methodology stated, your own inputs only.

Page: https://freecalculator.tech/tools/burn-multiple-calculator
Last reviewed: 2026-10-15

## Formula

Burn multiple = net burn ÷ net new ARR (same period).

- Methodology: David Sacks' burn multiple (Craft Ventures, 2020) — a common-practice capital-efficiency metric, not a standard.
- Net new ARR = new + expansion − churn − contraction.
- Lower means more efficient growth; no rating bands are applied here.
- Burn multiple = net burn ÷ net new ARR (same period).
- Inputs used: Currency (symbol only, never converted), Net burn in the period (cash out minus cash in), Net new ARR in the same period.

## Inputs

- Currency (symbol only, never converted)
- Net burn in the period (cash out minus cash in)
- Net new ARR in the same period

## Worked example: A quarter

$1,500,000 net burn, $1,000,000 net new ARR.
1. 1,500,000 ÷ 1,000,000 = 1.50×.

## Common questions

### What if the company is profitable?

With no burn the multiple is zero — the metric is meant for cash-burning companies. Check the formula, example, and limitations on this page before using the result for a real saas decision.

### Which period?

Quarterly or annual; use the same period for both inputs. Check the formula, example, and limitations on this page before using the result for a real saas decision.

### What is a good value?

We don't assume a benchmark. Compare against your own plan and history.

### How do I use the Burn Multiple Calculator?

Enter the required values for Currency (symbol only, never converted), Net burn in the period (cash out minus cash in), Net new ARR in the same period. The calculator applies the formula on this page and shows the main result with any supporting breakdown so you can check the arithmetic.

### What formula does the Burn Multiple Calculator use?

Burn multiple = net burn ÷ net new ARR (same period). The visible formula section above lists the calculation path and the edge cases the page handles, so the result can be checked without relying on the form alone.

### Can the Burn Multiple Calculator be used for exact decisions?

Use it as a calculation aid, not as a substitute for checking the underlying rule, contract, policy, or professional advice that applies to your situation. When a result depends on local rules, personal details, prices, or dates, enter those values yourself and confirm them before acting.

## Limitations and assumptions

- Common practice, no standards body.
- Undefined when ARR doesn't grow.
- Results are educational estimates built only from the figures you enter. They are not personalised investment, tax, legal or accounting advice. Rates, growth and discount assumptions are always yours to choose.
- The result depends on the values you enter for this burn multiple calculator; it does not supply missing rates, rules, prices, dates, or assumptions for you.

## Sources

- OpenStax — https://openstax.org/books/principles-marketing/pages/1-unit-introduction

## Cite this page

- APA: Free Calculator. (2026, October 15). Burn Multiple Calculator. https://freecalculator.tech/tools/burn-multiple-calculator
- MLA: "Burn Multiple Calculator." Free Calculator, 15 Oct. 2026, https://freecalculator.tech/tools/burn-multiple-calculator.
- Link: Burn Multiple Calculator — Free Calculator, https://freecalculator.tech/tools/burn-multiple-calculator