Default alive

Definition

A company that will reach profitability with its current cash and revenue trajectory, without needing to raise more money. Paul Graham made the question popular, and it is a useful check against the comfort of an optimistic forecast.

Example Usage

We are default alive at current growth, so the raise is about speed rather than survival.

Origin

Popularized by Paul Graham's essay on the question.

Fun Fact

The opposite, default dead, is a much less pleasant phrase to hear from a founder who has just run the numbers at midnight.

Source: Paul Graham essays, Y Combinator community usage

Related Terms

Intermediate

churn

The startup world's euphemism for customers abandoning ship, measured as the rate at which subscribers cancel or stop using your service. It's the metric that keeps SaaS founders up at night, because acquiring new customers is expensive but losing existing ones is devastating. High churn is basically your business slowly bleeding out, but with spreadsheets.

🚀 Startup / VC

Intermediate

SAFE

Simple Agreement for Future Equity—a Y Combinator innovation that lets startups take money now and figure out the valuation later. 'Simple' is debatable; some lawyers call them 'complex convertible debt without the debt.'

🚀 Startup / VC

Advanced

zombie VC

A venture capital firm that's functionally dead but still managing old funds, unable to raise new capital but too undead to fully shut down. They're not investing in new companies but still collecting management fees from their limited partners.

🚀 Startup / VC

Beginner

lead investor

The VC firm that sets the terms and does the heavy lifting in a funding round, while other investors gratefully follow along. Someone has to negotiate while everyone else free-rides.

🚀 Startup / VC

Intermediate

valuing

The process of slapping a number on something that probably doesn't have a real value. In venture capital, it's educated guessing dressed up as financial analysis—your startup is worth $100M because we feel like it is, and also because everyone else paid way too much for similar companies.

🚀 Startup / VC

Intermediate

founder's dilemma

The impossible choice between maintaining control of your company and maximizing its financial value, first articulated by Harvard's Noam Wasserman. You can be rich or you can be king, but probably not both.

🚀 Startup / VC

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