Burn Multiple Explained: The Capital Efficiency Metric Every SaaS Investor Uses
Category: SaaS Metrics · Published: 2026-04-17
Burn Multiple measures how much net cash a company burns for every dollar of new ARR generated. Introduced by David Sacks of Craft Ventures, it has become the go-to capital efficiency benchmark for growth-stage SaaS investors. A burn multiple below 1.5x is considered good; above 2x signals inefficient growth. Learn the formula, benchmarks, and how to improve it.
Topics covered
- burn multiple
- burn multiple saas
- capital efficiency
- net burn
- saas efficiency metrics