Default Dead
A startup that will run out of cash before reaching profitability unless it raises more money, cuts costs, or accelerates revenue growth.
What is Default Dead?
Default dead is the uncomfortable truth for many startups: at your current trajectory, you will run out of money before your revenue covers your expenses. Something has to change — more funding, less spending, or faster growth.
Being default dead isn't a death sentence. Most venture-backed startups are default dead at some point. The danger is not knowing it, because that means you're not making the decisions needed to change the trajectory.
The calculation requires projecting your revenue growth forward and comparing it to your expense trajectory. If expenses still exceed revenue when your cash hits zero, you're default dead.
Why it matters
If you're default dead, you're fundraising from a position of weakness — you need the money, and investors know it. This affects your terms, your valuation, and your leverage.
More practically, knowing you're default dead forces you to make a plan: cut burn to extend runway, accelerate sales, or start fundraising immediately. The worst outcome is discovering you're default dead with only 3 months of runway left.
Example
You have $300,000 in cash, burn $60,000/month (5 months runway), and earn $10,000/month growing at 8% monthly. In 5 months, projected revenue = ~$14,700. Since $14,700 << $60,000, you're deeply default dead. You need to either raise capital or cut burn significantly.
How RunwayCal helps
RunwayCal shows your current trajectory and lets you model the changes needed to flip from default dead to default alive. The Endgame Calculator provides an instant default-alive/dead assessment.
Common mistakes
- 1Not realizing you're default dead because you haven't modeled revenue growth against burn
- 2Assuming a fundraise will close before you run out of cash without building in buffer time
- 3Panicking instead of using the information to make a concrete plan
Find out if you're default dead — and what to do about it
The Endgame Calculator shows your trajectory in seconds. If you're default dead, RunwayCal helps you model the path back.
Check your trajectory → Calculator