It is quite believable once you stop treating people as rational beings.

There is this bias towards investments that don't exist, or their 'results' don't exist - whereas the interpretation of either is left to imagination. Now investors can imagine how awesome this tech X will be, and how it will disrupt Facebook and generate X amount of value...this being a classical investing trap.

This is why so many startups want to stay 'pre-revenue' for as long as possible, because they know, as soon as the actual revenue metrics materialize, investors will disappear.