Before the next raise pretends it already paid off
Cash Conversion Score for Startups: ARR per Net Dollar Raised as a Pre-Written Capital Tripwire
A unicorn raise headline that never mentions how much ARR each net invested dollar produced is not validation. Cash Conversion Score asks a smaller, honester question: how many dollars of current recurring revenue did each net dollar of equity and debt actually leave behind? Write that capital tripwire before you look at the round numbers. Matching or missing it is a decision signal — not a forecast that you will succeed, and not a substitute for naming the weakest demand or GTM assumption first.
Last updated: October 23, 2026
Direct answer
What is Cash Conversion Score — and why write the tripwire first?
Cash Conversion Score (CCS) is current ARR divided by total equity plus debt raised to date, minus cash still on the balance sheet. It answers how many dollars of recurring revenue each net invested dollar produced — not whether you will succeed. Write the tripwire before you look: before we raise or spend the next tranche, CCS must stay ≥X, or we stop raising, cut burn, and fix CAC payback or churn first. Hitting or missing that line is a decision signal, not a prediction of success.
Key takeaways
What to remember
- CCS = current ARR ÷ (equity + debt raised to date − cash on hand). Bessemer Atlas (Jeff Epstein & Mary D’Onofrio, 27 November 2019) nets unused cash so the denominator is capital consumed, not capital parked.
- A CCS of 1.0x means one dollar of investment has yielded one dollar of topline recurring revenue. Bessemer’s portfolio signal: financings with CCS >1.0x averaged about 120% IRR — about 2× the average IRR for CCS <1.0x. Their Good / Better / Best bands for Bessemer-funded businesses: 0.25–0.5x → ~40% IRR; 0.5–1.0x → ~80% IRR; 1.0x+ → ~120% IRR. Those bands are labeled portfolio history, not a law that 1.0x proves you will succeed.
- Burn multiple is this period’s net burn ÷ this period’s net new ARR. CCS is the stock of ARR ÷ the stock of net capital ever consumed. A company can look fine on one and ugly on the other. Magic Number and CAC payback judge sales spend. CCS judges equity-and-debt efficiency. Bessemer notes you cannot have a high CCS without healthy CAC payback and low churn.
- Bessemer’s 2019 public-cloud snapshot: median CCS 1.3x at ~$100MM revenue; of about 50 public cloud companies, fewer than five sat below 0.5x at that scale. Median public cloud company raised $160MM to reach ~$100MM revenue; some raised up to $750MM. The takeaway is not “never raise.” It is raise when capital catalyzes growth.
- Write as-of date + ARR (or CARR — say which) + equity + debt + cash + CCS threshold + named action before you measure. Pre-ARR, CCS is near zero by construction — do not starve discovery to “optimize CCS.” Bootstrapped books with a denominator ≤0 make CCS undefined or “infinite”; use burn multiple, CAC payback, and retention tripwires instead. A Yibud score is not CCS and not a success prediction.
Why it matters
Why CCS is a tripwire — not a trophy
Founders treat the raise announcement as the whole story. Capital in the bank is not ARR. Two sittings from Bessemer are useful here as instruments, not as personal odds: the 2019 CCS essay on how net invested dollars map to recurring revenue, and the 2021 Scaling-to-$100-Million CCS sentences on how the average rises with maturity.
A raise can look like progress while net capital is still idle — or already wasted
If you forget to subtract cash, a just-closed round makes CCS look terrible even though most of the money is still parked. If you already spent the round and ARR did not show up, CCS looks terrible for a different reason. Both sittings need the four inputs, not a headline multiple. Write the bar before the close, or the close will rewrite the bar.
Period efficiency can hide lifetime capital consumption
A quarter can print a polite burn multiple while the company has already consumed far more equity and debt than its current ARR can justify. CCS is the cumulative sitting. It does not replace naming the weakest demand assumption. It tells you whether the next tranche is buying growth or buying a story about growth.
The four terms
CCS formula, 1.0x, burn multiple, and sales-efficiency neighbors
These four fields are the instrument. If any one is fuzzy, the number is a slide, not a tripwire. This page does not invent extra grade tables beyond Bessemer’s labeled Good / Better / Best bands.
The formula — ARR ÷ (equity + debt − cash)
Bessemer’s Cash Conversion Score equals current ARR divided by total equity and debt capital raised to date, net of current cash. Subtract unused cash so the denominator is capital consumed, not capital parked. State whether the numerator is ARR or CARR (committed ARR). Do not swap in GAAP revenue and still call the result CCS.
What 1.0x means — and Bessemer’s illustrative 10x math
At 1.0x, one dollar of investment into the business has yielded one dollar of topline recurring revenue. Bessemer’s own illustrative assumption in the 2019 piece: if cloud multiples were 10x revenue, $1 of ARR would imply $10 of enterprise value, so a 1.0x CCS would look like a 10x return on invested capital, and a 0.1x CCS would only return the capital invested. That 10x is Bessemer’s illustrative assumption in that essay — not a live market quote and not a forecast.
Versus burn multiple — stock versus flow
Burn multiple is net burn in a period divided by net new ARR in that same period. CCS is the stock of ARR divided by the stock of net capital raised. A company can look fine on one and ugly on the other. Period cash discipline does not erase a decade of oversized raises. A high CCS does not tell you this quarter’s burn is under control.
Versus Magic Number and CAC payback — sales spend, not equity
Magic Number asks how efficiently last period’s sales-and-marketing spend turned into incremental subscription revenue. CAC payback asks how many months of contribution recover fully-loaded acquisition cost for a cohort or channel. CCS asks how much current ARR each net dollar of equity and debt produced. Bessemer is explicit: you cannot have a high CCS without a healthy CAC payback, which also requires low churn. Keep the instruments on separate pages.
Worked example
One SaaS close you can copy (illustrative — fictional)
The close below is illustrative. Names, product, and counts are invented so you can see the setup. It is not a study, not an industry benchmark, and not a Yibud report. Copy the method, not the numbers.
The promise, written before the books close
Illustrative names: founder Priya Shah at Ledgerlane, a shared invoicing tool for boutique agencies. ARR exists. A large round already closed. The tempting trophy is a Q3 slide that shows ARR up and never mentions net capital consumed. The tripwire is written first, on 1 July 2026: before we raise or spend the next tranche, CCS must stay at least 0.25x — Bessemer’s labeled Good floor, used here as Yibud’s suggested template, not a proof of success.
The four inputs, kept honest
As of 30 September 2026: ARR = $1,200,000. Equity raised to date = $8,000,000. Debt raised = $0. Cash on hand = $1,500,000. Net capital consumed = $8,000,000 − $1,500,000 = $6,500,000. CCS = $1,200,000 ÷ $6,500,000 = 0.18x. Same quarter, Net Burn was $600,000 and Net New ARR was $400,000 — a 1.5x burn multiple that looks polite. The stock sitting does not.
The tripwire, written 1 July
Signal: CCS = ARR ÷ (equity + debt − cash), and whether it stays ≥0.25x. Threshold: honor a miss if CCS is below 0.25x before the next raise or spend tranche. Window: books close 30 September; written before the first report. Action if miss: do not raise; cut burn; fix CAC payback and logo churn before the next tranche. A Yibud score does not fire this line. The 0.25x bar is Bessemer’s Good floor used as a template, not Best (1.0x+) pasted onto a twelve-person company.
What a miss looks like — and the reverse sitting
Illustrative close: 0.18x misses 0.25x. Headline ARR still rose. Honor the action you wrote — or admit you wrote a bar you will not keep. Reverse sitting, also fictional: same $1,200,000 ARR, only $2,000,000 raised, $800,000 still in cash → CCS = $1,200,000 ÷ $1,200,000 = 1.0x. Moderate growth can print an excellent CCS. Do not celebrate either number until the four inputs and the dated action sit on the same page.
What must not happen
Do not drop cash from the denominator so $8,000,000 prints 0.15x and you call that “even more honest.” Do not add cash back after a miss to manufacture 0.24x. Do not swap GAAP revenue for ARR. Do not invent next year’s ARR so the spreadsheet prints 0.5x. Do not treat Bessemer’s 1.0x Best band as proof Ledgerlane will succeed.
Write the tripwire before the first report. If the window closes and CCS misses the bar you wrote, honor the action. If it cleared the bar, continue to the next cheapest test — usually the next as-of date on the same definition, or a kill/pivot contract that now has a number to read. The method is the dated page, not the raise headline.
Published bands
Bessemer Good / Better / Best — labeled, not a seed law
Bessemer published these as approximate IRRs for Bessemer-funded businesses, not as a law you must hit next quarter. Use them as a vocabulary for “how serious is capital efficiency in this portfolio history,” then write your own tripwire for the as-of date you can actually measure.
| Band (Bessemer) | CCS they name | Approximate IRR they report |
|---|---|---|
| Good | 0.25–0.5x | ~40% IRR. Source: Bessemer Atlas, Epstein & D’Onofrio, 27 November 2019. |
| Better | 0.5–1.0x | ~80% IRR. Source: Bessemer Atlas, Epstein & D’Onofrio, 27 November 2019. |
| Best | 1.0x+ | ~120% IRR. Source: Bessemer Atlas, Epstein & D’Onofrio, 27 November 2019. |
Portfolio signal from the same piece: financings with CCS >1.0x yielded an average IRR of about 120%, about 2× the average IRR for CCS <1.0x. That is Bessemer’s portfolio history. It is not a forecast that your 1.1x will return 120%.
Public-cloud snapshot in that 2019 piece: median CCS 1.3x at ~$100MM of revenue. Of approximately 50 public cloud companies, fewer than five had CCS below 0.5x at that scale.
Fundraising reality check, same piece: the median public cloud company raised $160MM to reach ~$100MM revenue scale; some companies raised up to $750MM. Bessemer’s takeaway is not “never raise.” Great companies used capital to catalyze growth — they did not starve themselves of it.
Bessemer says these Good / Better / Best bands hold across stage from $5MM ARR to $1B+. That is their claim about their framework’s range, not a license to paste 1.0x onto a pre-revenue idea and call it research.
How the average moves
Scaling-to-$100-Million CCS sentences — averages, not a second grade table
Bessemer’s 21 September 2021 Scaling piece has a short CCS section. This page uses only those CCS sentences. It does not copy that report’s ARR-growth, NRR, or gross-margin band tables — those live on their own Yibud pages.
Average CCS rises with maturity
Bessemer: the average Cash Conversion Score for cloud companies tends to increase as the company matures, from an average of almost 0.5x at $1–10MM ARR to almost 1x at $100MM+. Revenue generation tends to lag spending. Only the strongest companies scale to the $100MM+ mark where they see the most leverage from the operating model.
Best-in-class target they look for
They do not hold every company to Zapier-like extremes. They look for companies with best-in-class CCS of 1x+.
Zapier — extreme capital efficiency, not a computed CCS on this page
Bessemer names Zapier as one of the strongest companies on this metric from the start: raised only $1.3MM lifetime; announced in March 2021 that it exceeded $140MM ARR. This page does not divide those two numbers and call the result Zapier’s CCS. Bessemer presents the pair as extreme capital efficiency, not as a calculated CCS multiple.
Portfolio snapshots
Twilio, Shopify, PagerDuty — Bessemer’s dated numbers only
These vignettes use only the figures Bessemer stated in the 2019 CCS essay. Valuations in that piece are historical snapshots. This page does not update or invent today’s market caps.
Twilio into the April 2015 Series E
Bessemer: Twilio ended 2014 with ~$90MM of revenue on ~$110MM of capital raised, with ~$30MM cash — CCS 1.1x. Series E priced at $1B post-money. About a year later, first-day IPO market cap $2.4B. Those are the dated snapshots in the piece.
Shopify Series C, 2013
Bessemer: Shopify had a 1.3x Cash Conversion Score in its 2013 Series C, at a $1B valuation. The piece does not publish Shopify’s ARR / capital / cash split on this page’s allowed-source list, so this page does not invent one.
PagerDuty end-2016 — when growth and efficiency score were not enough
Bessemer: PagerDuty ended 2016 with ~$60MM ARR, ~65% YoY growth, and a 40% efficiency score — strong, not best-in-class at that scale. It had raised only ~$45MM, with ~$10MM cash — CCS 1.7x. 2017 Series C at $750MM. IPO about two years later, first-day $2.8B. Bessemer notes about 90% IRR at IPO close for that round. Neither revenue growth nor efficiency score, they write, would have shown that sitting on its own.
Bessemer’s founder conclusions, paraphrased tightly: (1) before product-market fit and a scalable sales-and-marketing organization, raise and spend as little as needed to tune product and GTM — early CCS will be low, and raising then is highly dilutive capital not yet proven to return; (2) after both, raise and use as much as the organization can absorb to grow — they note, from their 10 Laws framing in the piece, that market leaders often command 50%+ of market enterprise value; (3) celebrate growing into the ARR that justifies the valuation, not the unicorn raise headline.
How to run it
How to measure CCS without faking scale
This is Yibud’s suggested sequence, not a Bessemer checklist. Honor the tripwire you wrote before the first report. If you cannot name the decision the number would change, you are building a slide.
- 1
Write the tripwire before you look
As-of date + ARR or CARR (state which) + equity raised + debt raised + cash on hand + CCS threshold + named action (do not raise / raise to accelerate / cut burn until CAC payback and churn improve / keep experimenting on demand assumptions). Do not rewrite the bar after the report.
- 2
Show the four inputs and the ratio — not only the multiple
ARR (or CARR). Equity. Debt. Cash. Then CCS. A 1.1x with no inputs is a vanity number wearing an efficiency costume. If cash is most of what you just raised, say so.
- 3
Net cash. Keep ARR honest.
Unused cash comes out of the denominator. GAAP revenue is not ARR. Do not mix a trailing-twelve-month GAAP number with “CCS” in the title. If you use CARR, label it CARR.
- 4
Do not invent a denominator — and do not starve discovery to print a high CCS
Pre-ARR or tiny ARR, CCS is near zero by construction. That is not a license to refuse interviews, smoke tests, or willingness-to-pay work. Bootstrapped or almost-no-raise books can make the denominator ≤0. Then CCS is undefined or looks “infinite.” Switch to burn multiple, CAC payback, and retention tripwires.
- 5
Read CCS next to payback, churn, and the assumption you named first
Bessemer: you cannot have a high CCS without healthy CAC payback and low churn. A pretty CCS with leaking logos is a story. If the window closes and you missed the bar, do the thing you named. A Yibud score does not fire this line.
What you leave with
The CCS tripwire (copy this)
If the sitting produced a multiple and no dated action, you did not finish. Fill the brackets. Leave nothing as “capital efficiency is fine,” “soon,” or “we’ll know it when the raise closes.”
The fill-in contract
Product: [name]. As-of date: [YYYY-MM-DD]. Hypothesis this number can falsify: [the next tranche will produce ARR, not just a larger cash pile]. ARR or CARR (circle one): [$]. Equity raised to date: [$]. Debt raised to date: [$]. Cash on hand: [$]. Signal: CCS = ARR ÷ (equity + debt − cash). Threshold: [e.g. stay ≥0.25x — Yibud template using Bessemer’s Good floor, not Best 1.0x+ pasted onto seed]. Action if miss: [do not raise / cut burn until CAC payback and churn improve / keep experimenting on the named demand assumption]. Written before the first report. A Yibud score does not fire this line.
The 0.25x line is Yibud’s suggested early-ARR template so you have a number to honor, taken from Bessemer’s Good band — not Best 1.0x+ treated as a seed law. Rewrite the threshold before you measure if you have a reason. Do not rewrite it after.
Example tripwire (Yibud’s suggested template, not a law)
If, as of 30 September, CCS = ARR ÷ (equity + debt − cash) is below 0.25x → we do not raise the next tranche, we cut paid acquisition the same week, and we fix CAC payback and logo churn before spending the remaining cash on growth. Do not invent next year’s ARR. Do not forget to net cash. Do not call GAAP revenue ARR.
A 1.0x CCS on a single lucky as-of date is still one date. A Yibud report score does not fire this tripwire.
The fork
When to use a CCS tripwire — and when not to
CCS is the wrong first instrument when there is no meaningful ARR yet, or when you still do not know if anyone will pay. It is the right instrument when you have raised (or are about to) and you are deciding whether the next dollar of capital should be taken or spent.
Use it when you have meaningful ARR and a raise or spend decision
You can name ARR (or CARR), equity, debt, and cash as of one date. You are about to raise, spend a tranche, hire a sales team, or tell yourself “the last round covers it.” That is when a dated capital-efficiency line earns its keep. Prefer two as-of dates so you can see direction, not one trophy close.
Do not start here when you are pre-revenue — or still need discovery
No ARR yet? CCS is near zero by construction. Do not “optimize CCS” by refusing to spend on interviews, smoke tests, or willingness-to-pay work. Still writing Stop / Pivot / Continue? Those are the decision contracts. This page supplies one cumulative capital-efficiency number those contracts can later read. Bootstrapped with denominator ≤0? Use burn multiple, CAC payback, and retention instead.
Not the same page
CCS vs burn multiple, Magic Number, CAC payback, Rule of 40, LTV:CAC, retention, vanity, and decision contracts
Several Yibud pages sit next to this one. Mixing them up turns a period burn ratio, a sales-efficiency multiple, or a mid-band engine number into “capital efficiency works.”
Burn multiple — this period’s cash vs this period’s net new ARR
That page asks how much company cash you burned, in a period, per dollar of net new ARR. This page asks how much current ARR the net stock of equity and debt has produced. A polite 1.5x burn multiple can sit next to a 0.18x CCS after an oversized raise. Keep the instruments on separate pages.
Burn multiple for startups →Magic Number and CAC payback — sales spend, not equity
Magic Number is lagged S&M → incremental subscription revenue. CAC payback is months of contribution to recover fully-loaded CAC for a cohort or channel. CCS is ARR per net invested dollar. Bessemer: no high CCS without healthy CAC payback and low churn. A 12-month payback does not tell you CCS is 1.0x.
Rule of 40 — growth plus profit, not ARR per net dollar raised
That page adds a growth rate to a profit margin for scaled software companies. CCS does not add those two percentages. A company can clear 40 and still have consumed far more capital than its ARR can justify.
SaaS Rule of 40 →LTV:CAC — unit economics that feed whether CCS can stay high
That page is lifetime value divided by acquisition cost for a cohort. CCS is company-level ARR versus net capital consumed. A 3× LTV:CAC on one channel does not make an oversized raise efficient.
LTV:CAC for startups →NRR and logo churn — retention health CCS depends on
NRR is dollar retention of a starting ARR base. Logo churn is accounts lost ÷ accounts at start. Bessemer ties high CCS to low churn. This page does not copy NRR or logo-churn band tables. Read those instruments there; use CCS here for the cumulative capital sitting.
Vanity metrics — hygiene class, not this capital tripwire
That page is the sorting hat: hits, cumulative signups, and waitlist size feel like progress and do not tell you what to do next. A pretty CCS chart with no inputs and no tripwire can still be vanity. A raise headline is not CCS.
Vanity metrics for startups →Kill and pivot — contracts that can read this number
Those pages write Stop, or rewrite one dimension, before hope edits the bar. This page can supply the capital-efficiency instrument those contracts later read: a dated CCS against a bar you wrote first. A unicorn raise with no denominator cannot fire a kill line honestly.
Discovery first — when CCS is the wrong first instrument
Pre-ARR, use a smoke test, a willingness-to-pay sitting, a per-segment interview stopping rule, or an Ellis survey among people with real usage. CCS becomes a raise/spend tripwire after meaningful ARR and a raise exist. Do not skip those pages to print a 0.0x CCS.
Where Yibud fits
Neither CCS nor a Yibud score predicts success
Yibud is a free, no-signup startup idea validator. Scores come from a deterministic rule engine, not from a language model guessing success. Optional AI text, when it is used, only polishes prose. It does not invent the number. A Startup MRI report can name a weak monetization or distribution assumption, then a Day-7 Continue / Refine / Re-test / Stop signal. The score is a flashlight on the weakest assumption to test next — not CCS, not burn multiple, not a forecast. CCS work sits next to that assumption: write the tripwire, do not hope a raise headline means each net dollar already produced ARR. If you already have a report, start with the named assumption, not the overall score. Then run the four inputs yourself. The method on this page stands alone if you never open the analyzer.
Analyze my idea →Common mistakes
What usually wastes an early CCS week
Forgetting to net cash
Bessemer subtracts cash on the balance sheet so the denominator is capital consumed. Leave cash in and a just-closed round prints a fake crisis. Take cash out after a miss and you manufacture a pass. Show the four inputs.
Using GAAP revenue instead of ARR
CCS is an ARR sitting. GAAP revenue lags ARR and can include non-recurring items. If you use CARR, say CARR. Do not title a GAAP ratio “Cash Conversion Score.”
Celebrating a raise that tanks CCS
Bessemer’s founder note: the milestone to celebrate is growing into the ARR that justifies the valuation — not the unicorn raise headline. A larger pile of unspent or already-wasted capital is not validation.
Optimizing CCS by starving GTM before product-market fit
Early CCS will be low. Bessemer’s first conclusion: raise and spend as little as needed to tune product and GTM — not nothing. Refusing interviews, smoke tests, or a first sales hire so the spreadsheet stays pretty is not capital efficiency. It is hiding from the demand assumption.
Treating 1.0x as proof you will succeed
A 1.0x CCS means one net invested dollar has produced one dollar of ARR as of that date. Bessemer’s Best band and ~120% IRR are portfolio history. They are not a forecast. Neither CCS nor a Yibud report score predicts success.
Inventing live market caps for Twilio, Shopify, or PagerDuty
This page uses only Bessemer’s dated snapshots: Twilio Series E $1B post and first-day IPO $2.4B; Shopify Series C $1B; PagerDuty Series C $750MM and first-day IPO $2.8B. Do not paste today’s ticker into the vignette and call it research.
Sources
Where these ideas come from
- Bessemer Venture Partners Atlas, Jeff Epstein & Mary D’Onofrio, “Cash Conversion Score for cloud companies,” 27 November 2019 — Used for the formula ARR ÷ (equity + debt − cash); 1.0x = $1 investment → $1 ARR; illustrative 10x-multiple / 0.1x “only returns capital” math (labeled illustrative); portfolio signal CCS >1.0x → ~120% average IRR, about 2× CCS <1.0x; Good 0.25–0.5x ~40% IRR / Better 0.5–1.0x ~80% / Best 1.0x+ ~120%; bands from $5MM ARR to $1B+; public median 1.3x at ~$100MM; fewer than five of ~50 below 0.5x; median raise $160MM / some $750MM; Twilio ~$90MM / ~$110MM / ~$30MM → 1.1x, Series E $1B, first-day $2.4B; Shopify 1.3x at $1B Series C; PagerDuty ~$60MM ARR, ~65% YoY, 40% efficiency, ~$45MM raised, ~$10MM cash → 1.7x, 2017 Series C $750MM, first-day $2.8B, ~90% IRR; cannot have high CCS without healthy CAC payback and low churn; founder conclusions on raise-little then raise-to-absorb, and 50%+ market enterprise value from the 10 Laws framing in the piece.
- Bessemer Venture Partners Atlas, Mary D’Onofrio, Ethan Ding & Atlas Editors, “Scaling to $100 Million,” 21 September 2021 — CCS section only — Used only for: average CCS almost 0.5x at $1–10MM ARR → almost 1x at $100MM+; best-in-class target 1x+; Zapier raised only $1.3MM lifetime and announced March 2021 that it exceeded $140MM ARR (presented as extreme capital efficiency — this page does not compute an implied CCS). This page does not reproduce that report’s ARR-growth, NRR, or gross-margin band tables.
In one paragraph
Summary you can quote
Cash Conversion Score is current ARR ÷ (equity + debt raised to date − cash on hand): how many dollars of recurring revenue each net invested dollar produced. Write as-of date + four inputs + threshold + action before you look. Bessemer Atlas (27 November 2019): 1.0x means $1 investment → $1 ARR; >1.0x financings averaged ~120% IRR, about 2× CCS <1.0x; Good 0.25–0.5x ~40% / Better 0.5–1.0x ~80% / Best 1.0x+ ~120%; bands from $5MM ARR to $1B+; public median 1.3x at ~$100MM; fewer than five of ~50 below 0.5x; median raise $160MM, some $750MM; Twilio 1.1x, Shopify 1.3x, PagerDuty 1.7x — dated snapshots only. Scaling (21 September 2021): average CCS almost 0.5x at $1–10MM ARR → almost 1x at $100MM+; best-in-class 1x+; Zapier $1.3MM raised / $140MM ARR announcement, no implied CCS computed here. Distinct from burn multiple (period flow), Magic Number and CAC payback (sales spend), and a Yibud score. Matching the gate is a decision signal. Neither CCS nor a Yibud score predicts success.
FAQ
Questions founders actually ask
What is Cash Conversion Score for a startup?
Current ARR divided by total equity plus debt raised to date, minus cash still on the balance sheet. It answers how many dollars of recurring revenue each net invested dollar produced. Bessemer Atlas (Epstein & D’Onofrio, 27 November 2019) nets unused cash so the denominator is capital consumed. It is a capital-efficiency number, not a success score.
What is a good Cash Conversion Score?
This page does not publish a universal seed law. Bessemer’s labeled bands for Bessemer-funded businesses: Good 0.25–0.5x (~40% IRR), Better 0.5–1.0x (~80%), Best 1.0x+ (~120%). Financings with CCS >1.0x averaged about 120% IRR, about 2× CCS <1.0x. Public-cloud snapshot in that 2019 piece: median 1.3x at ~$100MM revenue. Scaling (21 September 2021): average almost 0.5x at $1–10MM ARR → almost 1x at $100MM+; they look for 1x+. Write your own tripwire before you measure. 1.0x is not proof you will succeed.
How is CCS different from burn multiple, Magic Number, and CAC payback?
Burn multiple is this period’s net burn ÷ this period’s net new ARR. Magic Number is lagged S&M → incremental subscription revenue. CAC payback is months to recover a cohort’s acquisition cost. CCS is current ARR ÷ net capital consumed. A company can look fine on a period multiple and ugly on CCS after an oversized raise. Bessemer: you cannot have a high CCS without healthy CAC payback and low churn.
Can I compute CCS before I have ARR — or if I never raised?
Pre-ARR, CCS is near zero by construction. Do not starve discovery to print a prettier number. If you never raised, or cash still exceeds equity-plus-debt, the denominator is ≤0 and CCS is undefined or looks “infinite.” Use burn multiple, CAC payback, and retention tripwires instead. Do not invent a forecast ARR so a spreadsheet prints a multiple.
Is a Yibud score the same as CCS? Does 1.0x predict success?
No and no. Yibud scores come from a deterministic rule engine on your idea inputs. They point at the weakest assumption to test next. They are not CCS, not burn multiple, and not a forecast. Neither a 1.0x CCS nor a Yibud report score predicts success. You do not need an account to use this page.
Write the capital tripwire before the next raise
Yibud scores weak assumptions with a deterministic engine. You write as-of date, four inputs, threshold, and action while you are still honest — then CCS is a tripwire, not a raise slide.
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