Burn Rate

Category
Series B Team’s org
Market Practices

🟠: 1x-2x 🟡: 0,5x-1x 🟢: <0,5

Critical
You are asking the question : how much revenue is generated for every dollar spent?
NetBurn/NetNewARRNet Burn / Net New ARRNetNewARR=NewARRfromnewcustomers+ExpansionARRfromexistingcustomersChurnedARRNet New ARR = New ARR from new customers + Expansion ARR from existing customers – Churned ARR

From XAnge’s Runway Extension Playbook:

🔴  DANGER ZONE

>2x (danger zone)

🟠  TO BE IMPROVED

1x-2x (to be improved)

🟡  BETTER

0,5x-1x

🟢  BEST

<0,5

From David Sacks’ The burn multiple:

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From Serena’s 2021 European SaaS Benchmark:

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From Scale Venture’s Benchmarking SaaS Growth and Burn:

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From A16z’s A Framework for Navigating Down Markets:

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Additional resources