Canonical formula calculator
BURN MULTIPLE
How many dollars you burn for every dollar of new ARR you add — the cleanest measure of capital efficiency.
Total cash burned in the period (expenses minus revenue). Use the same period for both fields.
New annual recurring revenue added in the period, after subtracting churn. Can be negative if you lost more ARR than you added.
Anonymous runs are not saved. Sign in to track your margin over time.
Add context for case suggestions
Optional — helps us match this calculation against relevant case studies (coming soon).
What this tells you
Burn multiple is one of the cleanest signals of capital efficiency. It tells you how many dollars you burn for every dollar of new annual recurring revenue you add. Under 1.0 is excellent. Between 1.0 and 1.5 is good. Between 1.5 and 2.0 is suspect. Above 2.0 is a warning sign that you are spending too much to grow.
When to use it
Track burn multiple quarterly. Use it to compare your capital efficiency across periods, against industry benchmarks, or against the unit economics implied by your fundraising plan. If your burn multiple is climbing, you are getting less efficient at growth — fix it before raising more money.
What it doesn’t tell you
Burn multiple is a snapshot of efficiency, not direction. A 1.5 burn multiple that is trending down is a different reality than a 1.2 burn multiple that is trending up. It also does not account for the natural inefficiency of early-stage growth — a brand new business will have a high burn multiple by definition, and that is fine until it is not.
Coming soon
Cases, plays, and benchmarks for this metric will appear here as the Moonshot knowledge libraries grow. For now: log in to track your number over time and Moonshot will surface trend warnings when the substrate fills in.