Burn Multiple

Definizione

Burn multiple is net cash burned divided by net new ARR over the same period, measuring how efficiently a startup buys growth. Under 2 is considered fundable in 2026; under 1.5 is strong.

Come si presenta nel fundraising

Investors use burn multiple as a first-screen efficiency metric: burning $3M to add $1M of ARR (a 3x multiple) signals an expensive growth engine.

Domande frequenti

Why did burn multiple become important?

After 2022, capital stopped subsidizing inefficient growth; burn multiple compresses growth and efficiency into one number investors can compare across companies.

How do I improve my burn multiple?

Grow revenue faster than spending: better retention, higher-margin channels, and pricing power all move it more than cost cuts alone.

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