Default Alive

Default alive describes a startup that, at its current growth rate and burn rate, would become profitable before exhausting its cash — i.e., it would survive even if it couldn't raise another round. The concept was articulated by Paul Graham (Y Combinator). The opposite is 'default dead' — a company that must raise capital to survive. Default alive companies have enormous fundraising leverage: they can negotiate from strength because they don't desperately need the money. Default dead companies negotiate from weakness. In the post-2021 era of tighter capital markets, the question 'are you default alive?' became a primary filter for investors. Becoming default alive often requires cutting costs significantly — a difficult but often necessary pivot.