What it is
Burn multiple = net burn ÷ net new ARR for a period — a rough efficiency of how much cash you burned to add recurring base.
How it’s calculated
Use a clear net burn (operating vs total cash) and the same net new ARR definition as the waterfall. One-time cash items need callouts.
Where it breaks
Burn multiple breaks when ARR is CRM-inflated, when burn excludes known one-timers inconsistently, or when compared across companies with different ARR policies.
In the board pack
Pair burn multiple with runway and gross margin. Efficiency without liquidity context misleads.
Keep the written definition stable across close, the board pack, and diligence so the same word never means two math models.
When this metric moves, point to the source schedule and the bridge components — not a screenshot from a private workbook.