You Can't Rely on the Fundraising Market

The comforting assumption that keeps default dead companies calm is 'we'll just raise more.' PG's warning: raising money gets harder the more you visibly depend on it. Investors can smell need, and the fundraising market as a whole can turn cold with no warning and no regard for your runway.

So separate facts from hopes. It's fine to operate default dead if you say the true sentence out loud: 'We're default dead, and we're counting on investors to save us.' Most founders in that position never phrase it that starkly, because phrased that starkly it sounds as risky as it is.

What earns a rescue round? Roughly, steep revenue growth, say over 5x a year. Below that, more money is possible but never something to count on.