Break-Even & Default Alive Calculator
Find out what you need to earn to stop burning cash — and whether you'll get there before the money runs out.
1. Your Numbers
2. What You Need
Extra Customers Needed
Default Alive or Default Dead?
The question behind the numbers
The phrase comes from Paul Graham, and it's a blunt way of asking something most founders avoid: if you carry on exactly as you are, growing at the rate you're actually growing, do you reach profitability before the money runs out?
If yes, you're default alive. You might still raise, but you're choosing to, not because you have to. If no, you're default dead, and everything depends on something changing — a raise, faster growth, or lower costs.
It's an uncomfortable calculation, which is exactly why it's worth doing early. Founders tend to run it for the first time when they're already six months from zero, and by then the options have narrowed considerably.
Reading the result honestly
Use your real growth rate, not the one in your pitch deck. Take the last three or four months, work out the average month-on-month increase, and use that. Compound growth is unforgiving in both directions — the difference between 5% and 10% a month looks small on a spreadsheet and enormous eighteen months out.
Be aware of what this deliberately leaves out. It assumes your costs stay flat, which they rarely do if you're growing, and it ignores churn eating into the revenue you already have. Both push the real break-even point further away than the number here suggests.
The runway figure works the other way. It's calculated from today's burn, but as revenue grows your burn shrinks each month, so in practice the cash lasts a little longer than shown. That's deliberate — on a survival calculation it's better to be pessimistic than optimistic.
So treat a marginal result as a bad result. If the model says you break even one month before you run out of cash, you don't have a plan — you have a coin flip.
What compound growth actually does
The gap between growth rates is the thing spreadsheets consistently make look smaller than it is. Take a company with £8,000 of MRR and £20,000 of monthly costs, so it needs to add £12,000 of revenue to break even. Here's how long that takes at three different growth rates:
| Monthly growth | Months to break even | Cash needed to get there |
|---|---|---|
| 5% | 19 months | ~£136,000 |
| 10% | 10 months | ~£73,000 |
| 15% | 7 months | ~£51,000 |
Doubling the growth rate from 5% to 10% roughly halves both the time and the money required. That third column is the number that decides things: at 5% growth this company needs about £136,000 in the bank to survive to profitability, and at 15% it needs well under half that. Same product, same costs, entirely different funding conversation.
Cash figures assume costs stay flat and no churn, so treat them as a floor rather than a forecast. Real numbers will be higher on both counts.
Questions people ask
What growth rate should I put in?
The one you actually achieved over the last three or four months, averaged. Not the target, not the best month. If your growth has been lumpy or you've had a month or two of decline, use the average including the bad months — that's the honest picture, and this calculation is only useful if it's honest.
Why does the result ignore churn?
To keep the input simple. It's a real limitation: if you're losing 3% of revenue a month while growing 8%, your effective growth is closer to 5% and break-even is meaningfully further out. The safest approach is to enter your net growth rate — new revenue minus churned revenue — rather than gross new sales. Churn and your runway explains why the difference compounds.
My costs will rise as I grow. Doesn't that break the model?
It makes the model optimistic, yes. Break-even is a moving target: hire someone and it moves further away. If you know a specific cost increase is coming, add it to your monthly expenses now and see what happens to the answer. That's usually a more useful exercise than the baseline calculation.
Is being default dead necessarily bad?
Not automatically — plenty of well-funded companies are deliberately default dead while investing in growth. The problem is being default dead without knowing it, or without a concrete plan for what changes. The distinction that matters is whether it's a choice.
Are my figures sent anywhere?
No. Everything is calculated in your browser and nothing is transmitted or stored. See the privacy policy.
Next: work out how long your cash lasts with the runway calculator, read about buying yourself more time, or see what investors ask for before a seed round.