What is a good burn multiple for a SaaS startup?

Under 1x is efficient, 1x to 1.5x is acceptable, and above 3x usually signals a problem. Context matters: early-stage companies burn more per ARR rupee than mature ones, so track the trend over quarters rather than one reading.

How is the burn multiple calculated?

It is net cash burn divided by net new ARR over the same period. Net burn is cash expenses minus cash revenue, and net new ARR is ending ARR minus beginning ARR. If net new ARR is zero or negative, the multiple is undefined.

Why does my burn multiple look good but runway looks short?

The multiple measures efficiency, not survival. A 0.4x burn with only 3 months of cash still ends in an out-of-cash event. Fix runway with a raise or cost cuts, and fix the multiple with growth or spend discipline.

Do the numbers I enter stay private?

Yes. The calculation runs locally in your browser and no data is transmitted. Your ARR and cash figures remain on your device.

Burn Multiple Calculator

Compare net cash burn with net new ARR to understand growth efficiency, plus a simple runway estimate at the current burn rate.

Inputs

Beginning ARREnding ARRCash expenses per monthCash revenue per monthCash balance

Result

0.40x

See how efficiently growth is buying runway.

Net burn / month

$20,000

Runway at current burn

3.0 mo

Assumptions. All figures are same-period, nominal figures. This is a planning estimate, not accounting, tax, or investment advice.

What problem does this solve?

Net burn alone says nothing about whether growth is worth the cash. Investors read the burn multiple: net burn divided by net new ARR. Below 1 is efficient, above 3 is a warning. This tool computes the multiple from your ARR and cash figures and shows the runway at current burn.

Built for: SaaS founders preparing board decks and fundraising materials. Investors and operators benchmarking growth efficiency between companies also use it.

Worked example

Enter beginning ARR of 100,000 and ending ARR of 150,000 for the period.
Enter monthly cash expenses of 30,000, monthly cash revenue of 10,000, and a cash balance of 60,000.
The tool computes net burn of 20,000 per month and net new ARR of 50,000.
It returns a burn multiple of 0.4x, which sits in the efficient range, and a runway of about 3 months at current burn.
Read both numbers together: efficient burn with short runway still means you must raise or cut soon.

Common questions

What is a good burn multiple for a SaaS startup?: Under 1x is efficient, 1x to 1.5x is acceptable, and above 3x usually signals a problem. Context matters: early-stage companies burn more per ARR rupee than mature ones, so track the trend over quarters rather than one reading.
How is the burn multiple calculated?: It is net cash burn divided by net new ARR over the same period. Net burn is cash expenses minus cash revenue, and net new ARR is ending ARR minus beginning ARR. If net new ARR is zero or negative, the multiple is undefined.
Why does my burn multiple look good but runway looks short?: The multiple measures efficiency, not survival. A 0.4x burn with only 3 months of cash still ends in an out-of-cash event. Fix runway with a raise or cost cuts, and fix the multiple with growth or spend discipline.
Do the numbers I enter stay private?: Yes. The calculation runs locally in your browser and no data is transmitted. Your ARR and cash figures remain on your device.

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