Bessemer Efficiency Score is a measure of capital efficiency that tracks net new ARR against net burn for a given period. This metric showcases the incremental ARR dollars added for every dollar of burn, effectively measuring a company’s spending habits.
A company records $1 million in net new ARR and $600K net burn in a given year, resulting in a Bessemer Efficiency Score of 1.7x. This indicates that the company’s capital efficiency has reached the “best” range of scores.
According to Bessemer Venture Partners, the best Bessemer Efficiency Score is greater than 1.5x, with “better” companies falling in the range of 0.5-1.5.
The best way to visualize your Bessemer Efficiency Score is with a summary chart. This capital efficiency metric is usually displayed as a single number. It may help to compare it to a previous time period to view changes in value.
Bessemer Efficiency Score, also known as BVP Efficiency Score, is a measure of capital efficiency that was devised by Bessemer Venture Partners. Track this metric to have an objective way of looking at your capital efficiency.
While it’s great to generate revenue, it’s important to look at revenue as a return on capital expenditure. Bessemer Efficiency Score enables you to do this by looking at your Net New ARR as a multiple of Net Burn. You can then track this number against the benchmark to determine if you need to improve your capital efficiency.
