SaaS 2028 Burn Multiple
Burn Multiple = Net burn ÷ Net new ARR. <1 = efficient growth. 1-2 = acceptable. >3 = burn problem. 2028 SaaS reality: <1.5 expected for next round.
| Net cash burn | — |
| Net new ARR | — |
| Burn multiple 2028 | — |
| Tier | — |
Burn Multiple (David Sacks, 2020): Net cash burn ÷ Net new ARR added. Shows capital efficiency of growth. <1.0: amazing (top 10%). 1-1.5: great (fundable). 1.5-2: suspect. 2-3: bad. >3: crisis. 2028 reality: investors expect <1.5 for Series B+; lifestyle business if >3 sustained.
Why Burn Multiple Beats Other Metrics
CAC payback assumes static cohort. LTV/CAC depends on retention assumptions. Burn multiple is direct: real cash burned for real ARR added. No assumptions. Boards + investors now use it as primary efficiency metric post-2023 reset.
How to Improve
Reduce burn: cut sales hires, reduce paid acquisition, automate customer success. Increase ARR/burn: focus on existing accounts (NRR), product-led-growth (PLG) reduces sales cost, partnerships generate ARR with no incremental burn.
Net Burn Definition
Net cash burn = operating expenses - cash from operations. NOT just operating cash flow. Include all financing operations. Standard practice: exclude one-time costs (legal settlement, M&A) for normalization.
Last updated May 2026. Sources: Craft Ventures.