SaaS Burn Multiple & Capital Efficiency Calculator (Craft Ventures

Venture Capital Metrics: The Burn Multiple

Popularized by David Sacks of Craft Ventures, the Burn Multiple is the ultimate metric of startup capital efficiency:

• Why It Beats CAC Payback: While CAC only looks at sales and marketing, the Burn Multiple is fully-loaded across engineering, product development, executive salaries, and office leases.

• The Rule of Capital Conservation: An early-stage startup with a Burn Multiple of 1.0x or lower will survive macroeconomic downturns and easily raise venture rounds at top-quartile valuations.

How to Use This Calculator

Enter your Net Cash Burn ( during measurement period) (e.g. 1200000 (Cash Inflows minus Cash Outflows)), Net New ARR Added ( during same period) (e.g. 1000000 (Net New ARR generated)), Current Cash Bank Balance ( in Reserves) (e.g. 4500000 (Available cash runway)), Measurement Period Duration — choose from Annual (Trailing 12 Months - Standard), Quarterly (Trailing 3 Months), and Venture Capital Funding Stage — choose from Seed Stage (< 1M ARR - Target Burn Multiple < 1.5x - 2.0x), Series A (1M - 5M ARR - Target Burn Multiple < 1.0x - 1.5x), Series B+ (5M - 25M+ ARR - Target Burn Multiple < 0.8x - 1.0x). Results update instantly as you type — adjust any value to compare scenarios.

The Formula

Craft Ventures SaaS Burn Multiple & Runway equations: Burn Multiple = (Net Cash Burn in Period (\)) / (Net New ARR Added in Period (\)) Net Cash Burn = (Net Cash Burn in Period) / (Period Duration in Months)-Cash Runway (Months) = (Current Cash Reserves Balance (\)) / (Monthly Net Cash Burn) Sacks Rating Matrix: cases < 1.0x & Amazing Capital Efficiency \\ 1.0x - 1.5x & Good / Venture Standard \\ 1.5x - 2.0x & Questionable Efficiency \\ > 2.0x & Red Alert Capital Destruction cases

Worked Example

For example, evaluating a Series A startup that burned 1,200,000 in net cash over the last 12 months while adding 1,000,000 in Net New ARR with 4,500,000 in bank cash reserves: . The company burns 1.20 for every 1.00 of ARR created. At a 100,000/month net burn, the business has 45.0 Months (3.75 Years) of runway.

Understanding Your Result

Benchmark monthly churn rates for SaaS: Best-in-class below 0.5%, good 0.5–1%, average 1–2%, above 2% requires urgent attention. Annual churn above 24% (2% monthly) means the business replaces its entire customer base every 4–5 years — growth becomes a treadmill. Net Revenue Retention (NRR) above 100% means existing customers expand faster than they churn — the most powerful growth lever available. Top-quartile SaaS companies have NRR above 120%. Monthly churn of 1% compounding annually equals 11.4% annual customer loss.