In a capital-disciplined market, growth that costs too much is a liability, not a trophy. The burn multiple — net cash burned divided by net new ARR — is the single cleanest read on capital efficiency.

Using it

  • Lower is better. Burning less than a dollar to add a dollar of ARR is excellent; burning several is a warning.
  • Track the trend. A burn multiple rising over time means growth is getting more expensive — diagnose before it compounds.
  • Segment it. Different channels and segments have very different efficiency. Averages hide where you're winning and bleeding.
  • Pair it with NRR. Efficient acquisition plus strong retention is the durable combination investors and operators both want.

Bottom line: track the burn multiple and its trend — in 2026, capital efficiency is the metric that separates durable companies from expensive ones.