Burn Multiple Benchmarks by Stage & ARR Band

Calculate your Burn Multiple

Net Burn ÷ Net New ARR. See where you land against stage benchmarks.

Net cash burn (period, $)

Net new ARR added (same period, $)

Stage

Your Burn Multiple

Burn multiple benchmarks by stage and ARR band

Stage	ARR Band	Median Burn Multiple	Top Quartile (efficient)	Bottom Quartile (inefficient)	Rating
Seed	Under $1M	3.2×	1.4×	6.5×	Acceptable
Seed	$1M–$5M	2.8×	1.2×	5.5×	Acceptable
Series A	$1M–$5M	2.4×	1.0×	4.8×	Watch
Series A	$5M–$20M	2.0×	0.8×	4.0×	Target: <2×
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 C+	$20M–$50M	1.2×	0.5×	2.5×	Healthy
Series C+	$50M–$100M	1.0×	0.4×	2.0×	Strong
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 more capital-efficient.

Burn Multiple thresholds that matter

David Sacks' original framework: Amazing <1×, Great 1–1.5×, Good 1.5–2×, Concerning 2–3×, Bad >3×. These thresholds apply best to growth-stage companies ($10M–$100M ARR). Seed-stage companies often run 3–5× burn multiples while finding product-market fit — this is normal if declining over time. Above $100M ARR, top-quartile companies approach 0.2–0.4×, as operating leverage from existing ARR compresses the ratio structurally.

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