Burn Multiple Benchmarks by Stage & ARR Band

Calculate your Burn Multiple

Net Cash Burn ÷ Net New ARR added in the same period.

Net cash burn (period, $)

Net new ARR (same period, $)

Your Burn Multiple

Burn Multiple — all stages and ARR bands

Stage	ARR Band	Median	Top Quartile (efficient)	Bottom Quartile (inefficient)	Rating
Seed — high burn multiples expected while finding PMF
Seed	Under $1M	3.2×	1.4×	6.5×	Acceptable
Seed	$1M–$5M	2.8×	1.2×	5.5×	Acceptable
Series A — burn should trend toward 2×
Series A	$1M–$5M	2.4×	1.0×	4.8×	Watch
Series A	$5M–$20M	2.0×	0.8×	4.0×	Target: <2×
Series A	$20M–$50M	1.8×	0.7×	3.6×	Improving
Series B — operating leverage should appear
Series B	$5M–$20M	1.8×	0.7×	3.5×	Target: <1.5×
Series B	$20M–$50M	1.5×	0.6×	3.0×	Healthy
Series B	$50M–$100M	1.2×	0.5×	2.5×	Healthy
Series C+ — strong leverage expected
Series C+	$20M–$50M	1.2×	0.5×	2.5×	Healthy
Series C+	$50M–$100M	1.0×	0.4×	2.0×	Strong
Series C+	$100M+	0.8×	0.3×	1.6×	Strong
Growth / Pre-IPO — approaching FCF breakeven
Growth / Pre-IPO	$50M–$100M	0.8×	0.3×	1.8×	Strong
Growth / Pre-IPO	$100M+	0.6×	0.2×	1.4×	Best-in-class

Sources: David Sacks / Craft Ventures Burn Multiple framework, Bessemer State of the Cloud 2024, Redpoint SaaS Metrics 2024. Burn Multiple = Net Cash Burn / Net New ARR. Lower is better.

Burn Multiple thresholds (David Sacks framework)

Amazing <1×. Great 1–1.5×. Good 1.5–2×. Concerning 2–3×. Bad >3×. These apply to growth-stage companies ($10M–$100M ARR). Seed-stage companies commonly run 3–5× while finding PMF — acceptable if declining each quarter. Above $100M ARR, top-quartile companies approach 0.2–0.4×, as existing ARR creates structural leverage that compresses the ratio without management intervention.

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