SaaS Burn vs Growth Calculator
Calculate your burn multiple, YoY ARR growth rate, and efficiency verdict — the two metrics VCs use to judge pre-profitability SaaS health in 2026.
What Is SaaS Burn Multiple?
Burn multiple = monthly net cash burned / monthly net new ARR. It was coined by David Sacks (former PayPal COO, Yammer CEO) and is now a standard VC due diligence metric alongside the Rule of 40. Burn multiple tells you the efficiency of growth: how many dollars does the company spend to generate each dollar of new recurring revenue? A burn multiple below 1x means the company generates more ARR per month than it burns in cash — approaching capital efficiency. A multiple above 3x signals that growth is being bought with unsustainable cash spend and a fundraising cliff may be approaching. Bessemer Venture Partners published burn multiple benchmarks in their 2024 State of the Cloud report. Last updated: May 2026.
Why Burn Multiple and Growth Rate Must Be Analyzed Together
Burn multiple without growth rate context is incomplete. A 3x burn multiple at 200% YoY ARR growth is very different from 3x burn at 30% growth. The first is aggressive land-grab in a winner-take-most market; the second is a company declining toward insolvency. This calculator computes both simultaneously. The YoY growth rate here is an annualized projection based on your current monthly net new ARR pace versus current ARR — a leading indicator. Actual YoY requires comparing to exactly 12 months prior. The Rule of 40 provides a complementary check: growth rate % + profit margin % should exceed 40. Companies below Rule of 40 at Series B face valuation compression of 30–50% versus peers above 40.
How to Use This Calculator
Enter your monthly net burn — this is cash out (payroll, AWS, rent, marketing, etc.) minus cash in from operations (not VC raises, not one-time proceeds). Enter net new ARR for the same month: new logo ARR + expansion ARR − churned ARR − contraction ARR. Enter current ARR as of the start of the month. The calculator outputs burn multiple, annualized growth rate, projected ARR in 12 months at current pace, and a VC-grade verdict. Aim for burn multiple under 1.5x before your next funding round. If you are above 2x, identify the largest single cash consumer (usually payroll — headcount efficiency is the fastest lever) and model the impact of freezing or reducing that spend.
Frequently Asked Questions
What is SaaS burn multiple?
Burn multiple = net cash burned / net new ARR generated in the same period. It measures how many dollars a company burns to generate each dollar of new recurring revenue. Below 1x is excellent; 1–1.5x is good; 1.5–2x is acceptable; above 2x is concerning. Popularized by Bessemer Venture Partners.
How is burn multiple different from the burn rate?
Burn rate is an absolute dollar figure (e.g., $500K/month). Burn multiple is a ratio relating burn to growth output. A company burning $500K with $1M net new ARR has a 0.5x multiple (excellent). The same burn with $200K net new ARR is 2.5x (concerning). Burn rate alone cannot tell you if burning is justified.
What is a healthy burn multiple benchmark for Series B SaaS?
Bessemer Venture Partners' 2024 benchmarks: <1x = exceptional; 1–1.5x = strong; 1.5–2x = acceptable; 2–3x = needs attention; >3x = unsustainable. Most Series B companies run at 1.5–2.5x. Top-quartile companies target sub-1.5x before IPO filing.
What is YoY ARR growth rate and what is a good benchmark?
YoY ARR growth rate = (net new ARR annualized / current ARR) × 100. Most VCs expect 80–100%+ YoY ARR growth at Series A/B. The T2D3 rule suggests tripling ARR in years 1–2 and doubling in years 3–5 toward scale.
How do I use burn multiple and growth rate together?
Plot both: high growth + low burn = best outcome; high growth + high burn = needs efficiency; low growth + low burn = stagnant but alive; low growth + high burn = fundraising crisis. The Rule of 40 combines both (growth % + profit margin %) and checks if the sum exceeds 40.