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Cash-burning dotcoms are on road to crashing

Many internet companies could run out of cash within the next 15 months and one in four may crash within six months.

Companies are being warned they will find difficulties funding the second and third phases of business if they have not met high expectations.

Research by consultants PricewaterhouseCoopers reveals that 25 of the 28 companies examined were spending cash faster than money was coming in. The average burn rate to nil cash was 15 months, with 10 of the companies having a burn rate of less than 12 months.

PricewaterhouseCoopers forecasts the UK will see a significant number of dotcom mergers over the next year, driven by short burn rates and the potential to generateefficiency savings and revenue enhancement.

This consolidation may see some dotcom businesses merge with bricks and mortar businesses which have established brands.


Independent View

What fun it can be to look back at the blunders and own goals we all endure.The most recent clanger involved one of the top mutual life offices. It concerned an executive pension plan we have been looking after for several years. One member decided to increase his contributions following a big pay rise.As is […]

&#39Myners report conflicts with stakeholder goals&#39

The Government is being accused of sending contradictory messages to the pen- sion industry through the Myners report and the bench- marking of stakeholder fund performance.Providers claim the criteria set out by Paul Myners for his report into institutional investment conflicts with Government objectives in the stakeholder market.Gartmore chairman Myners was commissioned by Chancellor Gordon […]

Share exchange is no robbery

Last week, I continued my evaluation of the Budget changes to taper relief for business assets by working through an example which addressed two important issues: Where the period of ownership spans both the new and the older, more restrictive ownership rules. Where the assets satisfy the business assets test for some of the period […]

Clerical joins commission fray with revamp of GPP

Clerical Medical is the latest pension provider to enter the pre-stakeholder commission war following a revamp of its Staff Link group pension plan.The move sees the life office flexing the financial muscle of owner the Halifax, to offer IFAs commission of up to 60 per cent of Lautro rates on a stakeholder-style charging structure.It follows […]


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