Burn Multiple
Net burn divided by net new ARR — how much cash is consumed per unit of growth.
Burn multiple divides net cash burned by net new ARR added in the same period. Burning $2M to add $1M of ARR gives a multiple of 2.
It captures capital efficiency in one number. Under 1.5 is efficient, 1.5–2 is reasonable at early stage, and above 3 suggests growth is being bought rather than earned.
The metric became widely used after 2022, when capital tightened and efficiency began to matter as much as growth rate. Expect it to be asked about at Series A.