Burn Multiple Calculator
Burn Multiple: Burn multiple = net burn ÷ net new ARR (same period). Methodology stated, your own inputs only.
In short
Burn Multiple: Burn multiple = net burn ÷ net new ARR (same period). Methodology stated, your own inputs only.
Formula: Burn multiple = net burn ÷ net new ARR (same period).
What this calculator does
Burn Multiple: Burn multiple = net burn ÷ net new ARR (same period). Methodology stated, your own inputs only. Worked example, questions and limitations included.
Use it to turn Currency (symbol only, never converted), Net burn in the period (cash out minus cash in), Net new ARR in the same period into a checked result you can compare, copy, or rerun with different assumptions.
The page shows the formula, a numeric worked example, and the assumptions that affect this saas calculation.
Inputs and what they mean
- Currency (symbol only, never converted)
- — choice value.
- Net burn in the period (cash out minus cash in)
- — number value.
- Net new ARR in the same period
- — number value.
How to use it
- Enter each value in the unit shown next to the box (use the unit converter first if your numbers are in other units).
- Check the breakdown to see every intermediate step.
- Read the limitations before relying on the result.
Formula
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.
Worked example
A quarter
- 1,500,000 ÷ 1,000,000 = 1.50×.
Reading the result
The headline figure is the main answer. Any breakdown underneath shows the parts that make it up, so you can check the working and see what changes when you adjust an input.
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.
Reference: OpenStax
Last reviewed:
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.
Sources
Method based on OpenStax.
Cite this page
Free Calculator. (2026, October 15). Burn Multiple Calculator. https://freecalculator.tech/tools/burn-multiple-calculator
"Burn Multiple Calculator." Free Calculator, 15 Oct. 2026, https://freecalculator.tech/tools/burn-multiple-calculator.
Burn Multiple Calculator — Free Calculator, https://freecalculator.tech/tools/burn-multiple-calculator
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