The Burn Multiple (popularized by David Sacks) is a measure of how much a startup is burning to generate each dollar of new ARR.
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What is a good Burn Multiple?
Burn Multiple = Net Burn / Net New ARR. A score of 1.0 or less is "amazing" (meaning you spend $1 to get $1 of ARR). A score of 3.0+ is considered "distressing" and indicates high capital inefficiency.
Knowledge Challenge
Mastered The Burn Multiple? Now try to guess the related 6-letter word!
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