Burn Multiple Calculator 2026 Capital Efficiency for SaaS

Calculate your burn multiple and Bessemer Efficiency Score with 2026-era benchmarks. Sub-1.5x is the new baseline for Series A, not the aspiration. Includes burn rate and runway calculator.

Burn Multiple

Burn Multiple
1.25x
Efficient
Bessemer Efficiency Score
0.80
Net New ARR / Net Burn (inverse of burn multiple)

Burn Rate & Runway

Net Burn Rate
$100.0K/mo
Cash negative
Runway
20.0 months

2026 Burn Multiple Benchmarks

Since David Sacks introduced the burn multiple in 2022, expectations have tightened significantly. Sub-1.5x is now the baseline for Series A fundraising, not the aspiration.

Burn MultipleEfficiency ScoreRating2026 Context
< 1.0x> 1.0ExcellentTop decile. Highly capital efficient.
1.0-1.5x0.67-1.0EfficientSeries A minimum expectation in 2026.
1.5-2.0x0.5-0.67AcceptableOK at 100%+ growth. Needs path to sub-1.5x.
2.0-3.0x0.33-0.5ConcerningMost VCs will push back. Fix before fundraise.
> 3.0x< 0.33AlarmingSpending far more than you are growing. Red flag.

The David Sacks Origin Story

David Sacks (Craft Ventures) introduced the burn multiple in early 2022 as the SaaS market corrected. The prior era rewarded growth at any cost. Companies burning $3 for every $1 of new ARR were celebrated if the growth rate was high enough. Sacks argued this was unsustainable and proposed a simple metric to evaluate capital efficiency: how much cash do you burn per dollar of growth?

The metric caught on rapidly because it is intuitive, hard to game, and directly tied to the question every investor asks: will this company survive long enough to become profitable? By 2026, the burn multiple sits alongside NRR, Rule of 40, and LTV:CAC as one of the four metrics investors evaluate first.

Burn Multiple vs Bessemer Efficiency Score

They are inverses. Burn Multiple = Net Burn / Net New ARR. Bessemer Efficiency Score = Net New ARR / Net Burn. A burn multiple of 0.5x equals an efficiency score of 2.0. Some investors prefer one framing, some prefer the other. The information is identical. If someone asks for your "efficiency score," they mean the Bessemer formulation. If they ask for "burn multiple," they mean the Sacks formulation. Know both.

Related Calculators

Rule of 40ARR CalculatorGross MarginBudget Overrun Calc ↗

Frequently Asked Questions

What is a good burn multiple?
In 2026, below 1.0x is excellent (top decile capital efficiency). 1.0-1.5x is efficient and the minimum target for Series A fundraising. 1.5-2.0x is acceptable only at high growth rates (100%+ YoY). Above 2.0x is concerning for most stages. Above 3.0x is alarming. These benchmarks have tightened significantly from the 2022-2023 era when 2x was considered acceptable. The market now expects companies to grow efficiently, not just grow fast.
What is the burn multiple formula?
Burn Multiple = Net Burn / Net New ARR. Net burn is total cash spent minus total revenue (the amount of cash you consume each period). Net new ARR is the new annual recurring revenue added in that period (new + expansion - churn - contraction). A burn multiple of 1.5x means you burn $1.50 for every $1 of net new ARR added. Lower is better.
What is the Bessemer Efficiency Score?
The Bessemer Efficiency Score is the inverse of burn multiple: Net New ARR / Net Burn. A burn multiple of 0.5x equals an efficiency score of 2.0. A burn multiple of 2.0x equals an efficiency score of 0.5. Some investors prefer this formulation because higher numbers mean better efficiency, which feels more intuitive. The information content is identical.
How did the burn multiple become the standard efficiency metric?
David Sacks introduced the burn multiple in 2022 during the SaaS market correction. As growth-at-all-costs fell out of favour, investors needed a simple metric to evaluate capital efficiency. The burn multiple caught on because it is easy to calculate, hard to manipulate, and directly answers the question: how much cash are you burning per unit of growth? By 2026, it is one of the first metrics VCs ask about in pitch meetings.
What is the relationship between burn rate and runway?
Net burn rate is your monthly cash consumption (total expenses minus total revenue). Runway = cash balance / monthly net burn rate. If you have $3M in the bank and burn $200K per month, your runway is 15 months. Best practice is to raise funding when you have 9-12 months of runway remaining. Below 6 months of runway is the danger zone. Reaching cash-flow positive (zero net burn) gives infinite runway.