What is burn multiple?
Burn multiple compares how much cash a startup burns to how much net new ARR it adds over the same period.
Should burn multiple use ARR or MRR?
It is commonly expressed with ARR. If you use MRR, keep the numerator and denominator consistent and label the result clearly.
What if net new ARR is negative?
The calculator marks the result unavailable because burn multiple is not meaningful when ARR did not increase.
Is a lower burn multiple always better?
Lower burn multiple usually signals better cash efficiency, but it should be read with ARR growth rate, stage, runway, gross margin, and the quality of revenue added.
Can this replace accounting or legal advice?
No. Business tools are scenario planners. Contracts, taxes, payment timing, accounting treatment, refunds, and legal requirements can change decisions.
What should I do after using a business tool?
Save the assumptions, compare a conservative scenario, and review the result with actual books, contracts, or an advisor before making a high-stakes decision.