Article · 10 min read

Default Alive or Default Dead?

Paul Graham · paulgraham.com Free Intermediate

The single most useful mental model for whether you actually need to raise. Graham's 'default alive vs default dead' framing forces the financial clarity most founders avoid until it's too late.

• At constant expenses and current growth, will you reach profitability before the money runs out? Answer that first
• Founders systematically ask this question too late, often after over-hiring
• Being default alive gives you leverage; being default dead means you're fundraising from weakness