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← GlossaryCRM 101 · Metrics
// Metrics

Burn Multiple

Net burn ÷ net new ARR. How many dollars burned to add one dollar of ARR. Coined by David Sacks.

In depth

Post-ZIRP benchmark: <1 great, 1–1.5 good, 1.5–2 acceptable, >2 investigate. Replaced growth-at-all-costs as the default efficiency metric for private SaaS boards.

Related terms

Magic Number
Net new ARR in a quarter divided by S&M spend in the prior quarter. A payback proxy.
CAC Payback
Months of gross profit required to recover the CAC of a new customer.
Rule of 40
Growth rate + free cash flow margin should sum to at least 40 for a healthy SaaS business.
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