#953 · Startup Tool

Series A Burn Calculator

Measure Series A burn efficiency by combining operating spend, payroll, sales and marketing, revenue, and net new ARR. The result helps judge whether growth is capital efficient.

Calculator

Burn efficiency inputs
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How to use this calculator

  • Enter monthly operating expenses excluding payroll if tracked separately.
  • Add monthly payroll expense.
  • Enter current monthly revenue.
  • Enter net new ARR generated during the period to estimate burn multiple.

What the result means

Burn multiple measures how much cash the company burns to create each dollar of net new ARR. Lower multiples suggest more efficient growth.

Gross Burn = Operating Expenses + Payroll. Net Burn = Gross Burn − Monthly Revenue. Burn Multiple = Net Burn ÷ Net New ARR.

Use the same period for burn and net new ARR. Annual and monthly mismatches can distort burn multiple.

Example calculation

If monthly expenses are $250,000, payroll is $300,000, revenue is $350,000, and net new ARR is $450,000, net burn is $200,000 and burn multiple is 0.44.

Tips for better results

  • Cut low-return spending before reducing growth-critical roles.
  • Compare burn multiple by quarter.
  • Improve net new ARR rather than only cutting costs.
  • Track burn alongside runway and Rule of 40.

FAQ

What is a good burn multiple for a Series A SaaS company?

A burn multiple below 1 is generally efficient, 1 to 1.5 is solid, and above 2 suggests the company may be spending too much for its growth.

How do I calculate burn multiple from net burn and ARR growth?

Divide net burn for the period by net new ARR created in the same period.

Why does burn multiple matter for Series A startups?

It shows how efficiently the company converts cash into recurring revenue growth, which is central to investor evaluation.

Should burn multiple use gross burn or net burn?

Burn multiple usually uses net burn because it measures cash consumed after revenue contribution.

How can a startup reduce burn multiple?

The company can reduce inefficient spend, improve sales conversion, increase expansion revenue, or generate more net new ARR with the same spend.

Decision metrics

MetricMeaning
Gross BurnTotal monthly cash operating spend.
Net BurnGross burn minus monthly revenue.
Burn MultipleNet burn divided by net new ARR.
Efficiency StatusCapital efficiency rating.

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