I found this kind of funny.  I laughed and laughed.

http://business.bostonherald.com/technologyNews/view.bg?articleid=122847

"Ambient’s market capitalization — now at $33.9 million"

Here is the kicker...

"Chief Executive John Joyce remains upbeat that the 31-employee company — which has accumulated $84 million in losses since its inception as a public company in 1998 — will pull through"

"Ambient’s chief financial officer resigned this month after less than a year on the job. But Ambient’s revenue to date has been limited to $343,595."

Those are real figures.  300,000 revenue...84 million in debt.

Woa, some funky characters.

From:

http://www.fuckedcompany.com/

Oh, sure, it's fairly common for 'startups' that venture capitalists are interested in to run at negative revenue for a while.  That's what it takes to develop a technology that could have a huge payoff in the end -- large losses in the beginning.

To make this work, you have to have enough credibility to be able to get people to loan you money in the beginning, to sustain your burn rate.  As long as you have a 3 to 5 year business plan that says that's what you're expecting, it's no problem.

Now, if there never IS a pay-off, then you get the scenario that happened often during the dot-bomb years.  I hope the company you referenced isn't there yet -- they haven't even finished their first pilot project yet.