Burn multiple and Rule of 40
Net burn and new recurring revenue for the same period, plus growth and margin. See your burn multiple, your Rule of 40 score, and how investors are likely to read them.
- Board and investor updates
- Before a fundraise
- Deciding how fast to hire
Your numbers (same period)
Efficiency
General information, not legal or tax advice. Rules change and differ by state; check with your CA or labour consultant before you act. Everything you type stays in your browser.
Made for people like you
How to use it
- Enter net burn and net new ARR for the same period.
- Enter year-on-year growth and profit margin.
- See the burn multiple, its rating and your Rule of 40 score.
Good to know
Burn multiple
Net burn ÷ net new ARR. It shows how many rupees you burn to add one rupee of yearly recurring revenue. Lower is better.
A common scale
Under 1 is amazing, 1 to 1.5 great, 1.5 to 2 good, 2 to 3 needs a look, above 3 is a warning. Early start-ups often run higher.
Rule of 40
Growth % + profit margin % should be 40 or more for a healthy software company. A fast-growing company can lose money and still pass.
Use real numbers
Use the same period for burn and new ARR, usually a quarter, from your books and billing.
Questions people ask
Is it free? Do I need to sign up?
Yes, it is free and you do not need to sign up. Open it and use it as often as you like.
Is my data safe?
The numbers are worked out in your browser. Nothing you type is sent to USR unless you choose to email yourself the result.
How accurate is the result?
It is an estimate based on the rules shown on this page as of November 2026, not legal or tax advice. Rules and rates change, so check with your CA before you act.
What is ARR?
Annual recurring revenue: the yearly value of subscriptions and contracts that repeat.
Does this apply to non-software start-ups?
Use it with care. The scale was built for subscription businesses.
Know your numbers every month
USR Books, USR Billing and USR Insights give founders burn, ARR and growth on one screen, ready for the board.
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