Cash Conversion Score (CCS)
ARR created per dollar burned - Bessemer's read on how efficiently a SaaS company turns capital into recurring revenue.
- Term
- Cash Conversion Score (CCS)
- Is
- ARR created ÷ net cash burned to create it
- From
- Bessemer Venture Partners
- Higher is
- More capital-efficient
Forms & parts of speech
Definition in plain terms
The cash conversion score (CCS), from Bessemer Venture Partners, measures how efficiently a SaaS company turns burned capital into recurring revenue - the ratio of its ARR (or net new ARR over a period) to the total net cash it has burned to build that ARR.
A CCS of 1 means the company has generated a dollar of ARR for every dollar of cash it consumed; above 1 means it built more ARR than it burned (capital-efficient); below 1 means it burned more than the ARR it created.
It is one of the headline capital-efficiency metrics, alongside the burn multiple and magic number.
How to read it
The cash conversion score answers a clean question - how much recurring revenue did each dollar of burned capital buy? - and that makes it a strong summary of capital efficiency over a company's life, complementing the period-focused burn multiple and magic number.
A higher CCS signals a more capital-efficient business that has built durable recurring revenue without consuming excessive cash, which translates to less dilution and more independence.
But it should be read with context: it varies by stage (very early companies burn ahead of ARR), it uses ARR (so it inherits ARR's caveats about retention and quality
ARR that churns isn't worth the cash that built it), and it is one lens among several. The discipline is using CCS as a life-to-date capital-efficiency read, alongside the burn multiple (recent efficiency) and the magic number (sales efficiency)
while remembering that the quality and retention of the ARR matter as much as the ratio.
CCS - its ARR divided by the total net cash it had burned to create that ARR - told it how many dollars of recurring revenue each dollar of burned capital had bought.
Above 1 would mean it had built more ARR than the cash it consumed (capital-efficient); below 1 would mean it had burned more than the ARR it produced. The company reads CCS as the life-to-date efficiency summary it is, but with the right context and company.
It pairs CCS with the burn multiple (which captures recent, period efficiency) and the magic number (sales efficiency), rather than relying on any one metric. It accounts for stage (knowing very early companies burn ahead of ARR).
And crucially, it remembers that CCS inherits ARR's caveats - ARR that churns isn't worth the cash that built it - so it weighs the quality and retention of the recurring revenue alongside the ratio.
With CCS as one disciplined lens among several, the company gets an honest read on how efficiently it has converted capital into durable recurring revenue.
and treating a single capital-efficiency ratio as the whole picture.
Formula
Benchmarks
CCS varies by stage and inherits ARR's quality caveats; read it alongside the burn multiple and magic number.
Ranges are illustrative; every published figure is cited from a named public source or labelled “RGM analysis.”
Synonyms & antonyms
Synonyms
Antonyms
Origin & history
The cash conversion score was popularized by Bessemer Venture Partners as a SaaS capital-efficiency benchmark - ARR built per dollar of net cash burned - one of a family of efficiency metrics (with the burn multiple and magic number) that gained prominence as the 2022 shift to efficient growth made capital discipline central to SaaS valuation.
Etymology: source.
Usage trends
Search interest for this term over the last five years:
Common questions
- What is the cash conversion score?
- Bessemer's SaaS capital-efficiency metric — ARR (or net new ARR) divided by the total net cash burned to create it — showing how many dollars of recurring revenue each dollar of burned capital produced.
- What's a good cash conversion score?
- Above 1 means the company built more ARR than the cash it burned (capital-efficient); below 1 means it burned more than the ARR it created — but read it with stage and ARR-quality context.
- How does CCS relate to the burn multiple?
- CCS is a life-to-date capital-efficiency read; the burn multiple captures recent (period) efficiency, and the magic number captures sales efficiency — use them together.
Related tools & calculators
Resources & people to follow
- referenceBessemer — State of the Cloud (cash conversion score)
- referenceSaaS capital-efficiency practice
- referenceRGM analysis — a life-to-date efficiency read; pair with burn multiple and magic number, and weigh ARR quality
Curated, non-competitor resources verified per term.
Related training
Disciplines
Areas of marketing where cash conversion score (ccs) is a core concern: