Burn multiple is net burn divided by net new recurring revenue added in the same period, a measure of how much cash a company is spending to generate each new dollar of revenue growth.
A burn multiple under 1 means a company is generating more than a dollar of new revenue for every dollar it burns, generally considered efficient. A multiple of 2 or higher is often read as a warning sign, especially at a later stage, since it means growth is coming at an increasingly expensive cash cost.
The metric matters more as a company matures. Very early-stage companies often run high burn multiples by design, since a small revenue base makes the ratio noisy, and investing ahead of revenue is expected at that stage. It becomes a much more serious signal once a company has meaningful recurring revenue and is still burning heavily to grow it.
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