Default Alive
A startup that will become profitable before running out of cash at its current growth rate and expense level, without needing additional funding.
What is Default Alive?
"Default alive" is a concept coined by Paul Graham. A startup is default alive if, on its current trajectory — same growth rate, same expenses — it will reach profitability before cash runs out.
The opposite is "default dead" — a company that will run out of money before becoming profitable unless something changes (raising more money, cutting costs, or accelerating growth).
The distinction matters because it determines your negotiating position with investors and the urgency of every financial decision.
Why it matters
Knowing whether you're default alive or default dead changes everything. A default alive startup can negotiate funding from a position of strength — investors need you more than you need them. A default dead startup is on a countdown timer.
Many founders don't know which camp they're in because the calculation requires projecting both revenue growth and expense growth forward. It's not just a snapshot — it's a trajectory question.
Example
You burn $50,000/month with $500,000 in cash (10 months runway). Revenue is $15,000/month growing 12% monthly. In 10 months, projected revenue = ~$46,600/month. Since $46,600 < $50,000, you're default dead — expenses still exceed revenue when cash runs out.
How RunwayCal helps
RunwayCal's revenue model combined with scenario analysis lets you project whether your revenue growth will outpace your burn. The Startup Endgame Calculator on runwaycal.com/calculator gives you a quick default-alive check.
Common mistakes
- 1Assuming current growth rate will continue without checking if it's sustainable
- 2Ignoring that expenses also grow as you hire to support growth
- 3Thinking "default alive" means you don't need to watch burn rate
Are you default alive? Find out in 30 seconds.
The Startup Endgame Calculator shows whether your trajectory leads to profitability or cash-out — based on 3 simple inputs.
Check now → Endgame Calculator