{"id":28757,"date":"2022-12-28T13:06:26","date_gmt":"2022-12-28T13:06:26","guid":{"rendered":"https:\/\/www.growthmentor.com\/location\/athens\/default-alive-copy\/"},"modified":"2023-01-17T16:25:19","modified_gmt":"2023-01-17T16:25:19","slug":"default-alive","status":"publish","type":"glossary","link":"https:\/\/www.growthmentor.com\/glossary\/default-alive\/","title":{"rendered":"Default Alive"},"content":{"rendered":"\n

Definition of Default Alive<\/strong><\/h3>\n\n\n\n

A company that\u2019s default alive is one that\u2019s predicted to make a profit with the assets that they currently have access to without any further investment or future changes. In other words, it\u2019s a marker of whether the company is going to turn a profit before it runs out of money. <\/p>\n\n\n\n

To fully understand what default alive means, it can also help to take a look at default dead. <\/p>\n\n\n\n

Definition of Default Dead<\/h3>\n\n\n\n

A start-up that\u2019s default dead is burning through its cash and showing no signs of recovering it. It\u2019s not going to turn a profit before it runs out of money. <\/p>\n\n\n\n

The terms default alive and default dead were created by entrepreneur and investor Paul Graham<\/a>, and they were designed to be used specifically to talk about start-ups. <\/p>\n\n\n\n

Figuring out if you’re alive or dead<\/h3>\n\n\n\n

Most start-ups think of themselves as default alive, but it\u2019s important to be realistic. Entrepreneurs need to remember that they\u2019re looking at their business through rose-tinted glasses, and that potential employees, investors and partners will all be able to take a much more realistic, unbiased look at the company. <\/p>\n\n\n\n

Surprisingly, a lot of founders don\u2019t even know whether they\u2019re default alive or default dead. It\u2019s vital for them to know this if their start-up is going to be a success, and it will also have a big impact on the way that investors deal with them.<\/p>\n\n\n\n

The main reason why entrepreneurs don\u2019t know whether their company is default alive or default dead is that it doesn\u2019t make sense to ask the question at all when they\u2019re first starting out. It\u2019s only as they start to mature that it becomes important to take a look at their finances. Unfortunately, by this point, many entrepreneurs are set in their ways and don\u2019t think to start measuring their long-term prospects for survival.<\/p>\n\n\n\n

Another reason why founders don\u2019t ask themselves whether they\u2019re default alive is that they incorrectly assume that it will be easy for them to raise more money. This ends up leading to them relying on additional investment that might not come for them to be able to remain in business. <\/p>\n\n\n\n

Remember, these are only estimates<\/h3>\n\n\n\n

It\u2019s important to remember that default alive and default dead are only estimates, and so they\u2019re no guarantee of future performance. On top of that, most industries are getting more and more competitive as time goes on, and this means that just because a company is default alive today, it doesn\u2019t mean that it will be tomorrow. <\/p>\n\n\n\n

The concepts of being default alive and default dead are related to another concept called the fatal pinch<\/a>. This is when a company that\u2019s default dead is coupled with relatively slow growth and a lack of time to fix it. This leaves them in a situation in which they\u2019re stuck being default dead and won\u2019t be able to fix it before the company goes under.<\/p>\n","protected":false},"excerpt":{"rendered":"

Definition of Default Alive A company that\u2019s default alive is one that\u2019s predicted to make a profit with the assets that they currently have access to without any further investment or future changes. In other words, it\u2019s a marker of whether the company is going to turn a profit before it runs out of money.  […]<\/p>\n","protected":false},"author":54,"featured_media":0,"parent":0,"template":"","glossary-term":[],"acf":[],"yoast_head":"\nAre You Default Alive or Default Dead? 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