Burn Multiple measures how much a startup is burning in order to generate each incremental dollar of ARR. It is a capital efficiency metric that reveals a lot about the overall health of the startup, providing insight into how much revenue you're generating per dollar burned. It goes beyond the net burn rate to show how efficiently your company can generate revenue by deploying capital raised from funding rounds. The higher the Burn Multiple, the more the startup is burning to achieve each unit of growth. The lower the Burn Multiple, the less a startup has to spend to grow, meaning the growth is more efficient.
Burn Multiple measures how much a startup is burning in order to generate each incremental dollar of ARR. It is a capital efficiency metric that reveals a lot about the overall health of the startup, providing insight into how much revenue you're generating per dollar burned. It goes beyond the net burn rate to show how efficiently your company can generate revenue by deploying capital raised from funding rounds. The higher the Burn Multiple, the more the startup is burning to achieve each unit of growth. The lower the Burn Multiple, the less a startup has to spend to grow, meaning the growth is more efficient.