Burn multiple calculator
Enter net burn and the ARR at the start and end of a quarter. See the burn multiple and its level on the David Sacks scale.
Calculator
Burn multiple: cash burned for each new dollar of ARR
Set the net burn for one quarter and the ARR at the start and at the end of the same quarter.
- Net new ARR
- $1M
- End − start
- Burn multiple
- 2x
- $2M ÷ $1M
- Level
- Good
David Sacks's levels (2020)
- AmazingLess than 1x
- Great1x to 1.5x
- Good1.5x to 2x
- Suspect2x to 3x
- BadMore than 3x
The company burned $2M to add $1M of net new ARR: $2.00 of cash for each new dollar of ARR. Sacks calls this level good.
To get to 1.5x at this burn, the company must add $1.33M of net new ARR in the quarter. At this growth, the burn must be $1.5M or less.