David Sacks coined the metric after watching portfolio companies burn cash for mediocre growth. A seed company with $500,000 ARR can post a 3x or 4x multiple and still raise; a $20 million ARR company at the same multiple is burning $60 million to add $20 million in revenue.
This story is only covered by news sources that have yet to be evaluated by the independent media monitoring agencies we use to assess the quality and reliability of news outlets on our platform. Learn more here.