What is a good burn multiple? What the published numbers say
Updated 2026-11-07
There is no single good burn multiple. David Sacks's 2020 rules of thumb call under 1x Amazing and over 3x Bad. L40's medians fall from about 3.4x under $1M of ARR to 0.4x to 0.7x at $50M and over. Grid's customers read lower than L40 and Capchase at every stage Grid compared. Every source below is dated.
Sources side by side
| Source | Published | What it measures | Sample | Checked |
|---|---|---|---|---|
| Sacks's post | 2020-04-23 | Bands for venture-stage startups, offered as rules of thumb | None stated | 2026-11-07 |
| L40 | 2025-11-25, last modified 2026-10-28 | Median burn multiple by ARR band | A compilation of named sources, with undated inputs | 2026-11-07 |
| Grid | 2026-08-25, from page metadata | Median burn multiple of Grid's own customers, trailing 12 months | 113 of 131 customers, those with positive net new ARR | 2026-11-07 |
| Capchase 2022, through MetricHQ | 2022 report. MetricHQ's page: updated 2026-07-03 | Median burn multiple by ARR stage | 439 SaaS companies | 2026-11-07, MetricHQ's page |
Sacks's rules of thumb
Sacks wrote the table below in his post of 2020-04-23 and offers it as "rules of thumb" for venture-stage startups. He states no sample. Checked 2026-11-07.
| Burn multiple | Band |
|---|---|
| Under 1x | Amazing |
| 1 to 1.5x | Great |
| 1.5 to 2x | Good |
| 2 to 3x | Suspect |
| Over 3x | Bad |
On stage, he writes that a seed-stage company might have a burn multiple of 3 and that it might drop to 2 after a Series A. After a Series B he expects efficiency to rise further and gives no number. What it means has his worked examples.
L40's medians by ARR band
L40 published its table on 2025-11-25 and last modified the page on 2026-10-28. Checked 2026-11-07. It is a compilation: its source list names ScaleVP, SaaSCan and CapChase, and its text names Scale Venture Partners, Capchase and CFO Advisors. It does not date the inputs. Only the medians are shown here, because L40's top-quartile column overlaps them.
| ARR band | Median burn multiple |
|---|---|
| Under $1M | about 3.4x |
| $1M to $5M | about 2.0x to 2.4x |
| $5M to $20M | about 1.2x to 1.6x |
| $20M to $50M | about 0.9x to 1.4x |
| $50M and over | 0.4x to 0.7x |
L40 reprints Sacks's bands and labels 2.0 to 3.0x "Poor". The word in Sacks's own post is Suspect, which is what this site uses.
Grid's own customers
Grid calculated a burn multiple for 113 of 131 of its customers, the ones with positive net new ARR over the trailing 12 months. Its page shows no date in the body. Its page metadata gives 2026-08-25, so that date is shown here as "from page metadata". Checked 2026-11-07.
Grid names the selection effect itself: its customer base likely skews toward finance and RevOps-led teams who already pay close attention to this number. It makes two comparisons, kept in separate tables here.
| ARR stage | Grid median | Capchase 2022 median |
|---|---|---|
| $1M to $3M | 1.26x | 1.7x |
| $3M to $5M | 0.63x | 1.0x |
| $5M to $10M | 0.13x | 0.65x |
| $10M to $15M | 0.50x | 0.85x |
| ARR stage | Grid median | L40 median |
|---|---|---|
| Under $1M | 0.76x | about 3.4x |
Grid's page lists more rows than these. Open it for the rest.
Capchase 2022, through MetricHQ
MetricHQ prints Capchase's 2022 medians for 439 SaaS companies. Its page shows "Updated Jul 03, 2026", and Grid repeats the same figures. We have not located the original Capchase report, so these figures are secondhand. Checked 2026-11-07.
| ARR stage | Median burn multiple |
|---|---|
| $1M to $3M | 1.7x |
| $3M to $5M | 1.0x |
| $5M to $10M | 0.65x |
| $10M to $15M | 0.85x |
Where the sources disagree
For companies with $1M to $3M of ARR, Grid's customers read 1.26x and Capchase 2022 reads 1.7x. L40's wider $1M to $5M band gives a median of about 2.0x to 2.4x.
| Source | ARR stage | Median burn multiple |
|---|---|---|
| Grid | $1M to $3M | 1.26x |
| Capchase 2022, through MetricHQ | $1M to $3M | 1.7x |
| L40 | $1M to $5M | about 2.0x to 2.4x |
Grid gives two reasons for its own gap from the older studies: its customers skew toward teams that watch this number, and capital efficiency has become a bigger priority across the industry since 2022. The pages of L40 and MetricHQ do not discuss the difference. This page explains no cause beyond what each author states, and it never blends the numbers into one.
How these figures were chosen
Each source above was fetched again on 2026-11-07, and every figure on this page was compared with it. Figures seen only on secondary blogs, such as one attributed to Carta, are left out because they could not be traced to an original. That is no finding about those firms.