Burn Multiple is a metric used to measure the ratio of a startup's generated revenue to the cash spent (burn) on generating that revenue.

This metric is often used by investors to evaluate the financial health of a startup and its potential for future growth.

It is calculated by dividing the revenue generated by the amount of cash burned during the same period.

How to calculate Burn Multiple

Net Burn / Net New ARR = Burn Multiple

• A high burn multiple indicates that the startup generates more revenue for each dollar spent.

• A low burn multiple suggests that the startup may not be using its cash resources as efficiently.