Burn Multiple — Burn Multiple
Definition: Net cash burn divided by net new ARR. Less than 1 is elite efficiency, 1–2 is healthy, above 3 means you're lighting money on fire to grow.
Example
In board meetings, you'll often hear something like: "Let's pull the latest Burn Multiple numbers before we make a call" — shorthand for burn multiple.
When you'll hear it
Burn Multiple shows up most often in board meetings, quarterly business reviews, and strategy off-sites. When someone uses it, they're usually referring to burn multiple — and they expect the room to already know what that means.
FAQs
What does Burn Multiple stand for?
Burn Multiple stands for Burn Multiple.
What does Burn Multiple mean in business and finance?
Net cash burn divided by net new ARR. Less than 1 is elite efficiency, 1–2 is healthy, above 3 means you're lighting money on fire to grow.
Where will I hear Burn Multiple used at work?
Burn Multiple comes up most often in board meetings, quarterly business reviews, and strategy off-sites. It's used as shorthand for burn multiple, so people assume you already know the term.