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The Internet Compass

Metrics

Burn Multiple

Burn multiple is net cash burn divided by net new ARR over the same period. A burn multiple of 1.5 means the company burned $1.50 for every $1 of new recurring revenue.

Below 1 is exceptional, 1–1.5 is strong, 1.5–2 is acceptable at early stage, and above 3 signals a growth model that is not working.

The metric is popular with investors because it captures efficiency in one number without depending on cohort definitions.