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Shira Ovide

Cash Wildfire Spreads Among Young Tech Companies

The burn rate jeopardizes their future and hurts investors.

Burn, baby, burn.

Burn, baby, burn.

Photographer: Christopher Furlong/Getty Images

It’s time to get real about the financial fragility of young technology companies. Far too many are living beyond their means, flirting with disaster and putting their investors at risk. 

Bloomberg Opinion examined 150 U.S. technology companies that had gone public since the beginning of 2010 and were still operating independently as of Aug. 10. About 37 percent had negative cash from operations in the prior 12 months, meaning their cash costs exceeded the cash their businesses had generated.