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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