Burn Multiple

Burn multiple is net burn divided by net new ARR for a period: how much cash a company spends to generate each incremental dollar of recurring revenue. A burn multiple under 1 is exceptional; under 2 is generally healthy for an early-stage company.

It’s a different question from burn rate, which just measures how fast cash goes out the door. Burn multiple ties that spend to the revenue it produced, which means both the cash figure and the new-ARR figure need to reconcile to the same source data or the ratio tells you nothing real.