Default Alive for B2B Founders: How I Actually Think About Runway

Default Alive for B2B Founders: How I Actually Think About Runway

Most founders obsess over valuation. I care more about one thing: are we default alive or default dead? This is how I think about cash, pipeline, and sleep.

1. What “default alive” really means for a founder

For me, “default alive” is simple:

If we stop raising and just run the business, do we survive and grow?

Not “can we survive if we slash everything and lay off half the team.”

I define it as:

• Cash in bank ≥ 12 months of realistic burn

• Pipeline + retention curves that are trending up, not flat

• No “one customer” that can kill us if they churn

Everything else (press, vanity metrics) is noise on top of this.

2. My back‑of‑the‑envelope runway math

I don’t start with a spreadsheet. I start with three numbers:

• Monthly burn

• Realistic new MRR / revenue per month

• Churn / contraction expectations

Then I ask:

• If all new growth stopped, how long do we live?

• If growth slows by 50%, how long do we live?

• What happens if our biggest customer leaves?

If those answers scare me, we don’t need a bigger round. We need different decisions.

3. Designing revenue so I can sleep

For B2B, I like “minimum reliable revenue” (MRR, but mentally):

• Recurring contracts (12+ months where possible)

• Diversified by customer size and segment

• No single logo > 10% of total revenue

Practically, that means:

• Fewer discounts in exchange for longer terms

• More focus on expansion and upsell to existing customers

• Less excitement about “whale” deals that distort the picture

The goal: smoothness beats peaks.

4. What I cut first (and what I refuse to cut)

If we’re not default alive, I cut:

• Fancy tools the team isn’t deeply using

• “Brand” experiments nobody can connect to pipeline

• Internal projects that feel nice but don’t move core metrics

I don’t cut:

• The people closest to revenue and product quality

• Core infra that protects our reputation (deliverability, data quality)

• My own visibility into numbers (reporting, finance help)

I’d rather take my own comp hit than starve the parts of the business that keep us alive.

5. Cadence: the anti‑panic system

I like a simple cadence:

• Weekly: cash and pipeline snapshot

• Monthly: full P&L review and “default alive / dead” status

• Quarterly: reset plans based on reality, not wishful thinking

I share a version of this thinking every so often in my newsletter (vladsnewsletter dot com) so I can pressure‑test it with other founders.

6. A checklist for your next finance conversation

Before your next board or investor call, ask yourself:

• How many months of runway do we have at current burn?

• At 50% of our projected growth?

• What % of our revenue comes from top 3 customers?

• What spend can we kill without hurting product or pipeline?

• What would it take to be default alive in 12 months?

If you can’t answer these without opening a 40‑tab spreadsheet, you don’t know your business yet. But you can.