Burn Multiple
Net cash burned divided by net new ARR added — how much cash is consumed to produce a unit of recurring revenue.
Why it is unusually hard to game
It uses cash burn, which includes everything: product, general and administrative, and all the costs a sales-efficiency metric excludes. A company can look efficient on CAC and still burn heavily elsewhere; burn multiple catches that.
Lower is better
RELATED TERMS
CAC Payback Period
How long it takes for a customer's gross profit to repay the cost of acquiring them. The bridge between sales efficiency and cash flow.
Rule of 40
A heuristic that revenue growth rate plus profit margin should sum to at least forty, used to judge whether growth and profitability are in a defensible balance.
Magic Number
A sales efficiency measure comparing new recurring revenue produced to the sales and marketing spend that produced it.
Gross Margin
Revenue minus cost of goods sold, as a percentage of revenue. Whether the business model scales.
Learn how to apply this: RevOps 101: Revenue Operations Foundations
Definitions are the vocabulary. The courses are where you learn to operate it, with the interactive audit tools.
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