Burn Multiple Calculator

How to use it

1. Enter your net burn for the month and the net new ARR you added in that same month. Net burn is cash out minus cash in, not gross spend, so subtract revenue before you type the number. Net new ARR is the change in annualised recurring revenue this period, not bookings or one-time deals. Both numbers must cover the same window or the ratio is meaningless. The tool annualises each one (×12) under the hood, so a single clean month is enough to get a directional read, but a three-month average smooths out lumpy enterprise deals.
2. Read the burn multiple, which is simply net burn divided by net new ARR. The verdict band tells you where you sit: below 1.0 is amazing and extremely capital-efficient, 1.0 to 1.5 is great, 1.5 to 2.0 is good, 2.0 to 3.0 is concerning, and above 3.0 is unsustainable. This metric, popularised by David Sacks, answers one question that growth rate alone hides: how many dollars are you setting on fire to buy each new dollar of recurring revenue?
3. Use the verdict to separate efficient growth from bought growth. A company growing 100% year over year looks healthy until the burn multiple shows it is spending three dollars to add one. Two startups with identical ARR growth can have completely different survival odds, and the burn multiple is what exposes the difference before the cash-out date does.
4. Run a downside case by holding net burn flat and cutting net new ARR by 30%, the kind of slowdown a single lost quarter produces. If that pushes you from good into concerning or unsustainable, your efficiency depends on growth you have not yet proven is durable. Then test the opposite lever: how much would you need to trim burn to hold the same multiple if growth stalls?
5. Re-run every month or quarter and track the multiple as a trend, not a snapshot. A rising burn multiple over two or three quarters is an early warning that acquisition is getting more expensive or revenue is decelerating, usually visible here before it shows up in the runway calculator. Pair this with the startup runway tool to convert an efficiency problem into a concrete number of months.

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Use it from code

The same calculation as a JavaScript module you can import. It runs where you import it, with no request, key or rate limit.

import { compute } from "https://aibizhub.io/engines/burn-multiple-calculator.js";

Input and output contract, TypeScript types and the guide for agents.