What does it mean when a company “burns through money”? Where does the money go?


I read [this article](https://kotaku.com/facebook-metaverse-vr-2022-billions-13-billion-quest-2-1850062517) this morning about how ~~Facebook~~ Meta’s VR division “Lost $13.72 Billion In 2022”. The article later says that Meta is burning through money. But if they’re spending money to generate a product, doesn’t that money go somewhere? If Meta doesn’t have the $14 billion, who does?

In: 0

The money goes to payroll (salaries of the people doing the research, HR, managers, etc.), facilities (buildings they work in), taxes, prototyping technology, among other places.

It costs a lot of money to run a business, especially one as bloated as Meta

Employees don’t work for free.

The lights don’t stay on for free.

The software licenses aren’t free.

The rent in the building isn’t free.

The hardware they’re prototyping isn’t free.

These things add up, and in Facebook’s case the R&D cash burn on whatever the Metaverse is supposed to be appears to be massive.

It’s going to people they’re paying to advertise. It’s going to the people they’re paying who build and maintain the servers. It’s going to any past debts they’ve made. R&d for VR isn’t cheap either, and that’s currently a huge money-sink

If you produce a good or service that is sold you have revenue coming in to balance out expenditures.

Meta spent a lot of money on VR related stuff, probably mostly paying wages of staff, but they did not generate substantial revenue. Meta needs their vr stuff to be widely adopted by the public so they can sell ads there. No users, no advertising revenue, all your investments paying staff to create the digital product is ‘burnt’. Money spent advertising your vr world has probably also been wasted, along with paying for buildings for your staff to work in, etc.

Wages, heating, electricity, renting office space and office equipment including computers.