How does Burn Multiple differ from CAC Payback?

CAC payback isolates sales and marketing spend, whereas Burn Multiple captures all company burn including engineering, rent, and general overhead.

Updated: August 2026 • Verified v1.2

SaaS Burn Multiple & Capital Efficiency Runway Calculator

Finance & MathNew

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Burn Multiple = Net Cash Burn / Net New ARR; Runway Months = Cash on Hand / (Net Burn / Months)

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Understanding Your Results

Calculates Burn Multiple ratio (<1.0x Amazing, 1.0x-1.5x Good, 1.5x-2.0x Suspect, >2.0x High Burn), monthly burn velocity, runway months, and ARR generated per $1M burned.

Practical Guidance & Next Steps

In early-stage startups, a Burn Multiple of 1.0x to 1.5x is healthy. At scale ($10M+ ARR), top-quartile companies maintain a Burn Multiple under 1.0x.

What is this?

A SaaS venture finance tool that measures startup capital efficiency using David Sacks' Burn Multiple metric.

How does it work?

1. Enter Net Cash Burn and Net New ARR generated over a given period. 2. Input current Cash on Hand to determine monthly burn rate and runway. 3. Evaluate your Burn Multiple against venture capital industry benchmarks.

Why use it?

Provides an all-in measure of how efficiently a startup converts cash burn into top-line recurring revenue.

Technical Scope & Calculation Limitations

Burn Multiple isolates Net Burn relative to Net New ARR over the selected period. Does not replace comprehensive multi-year GAAP financial projections.