I think that Maciej Cegłowski got it right in his talk [0] with the concept of investor storytime.

To quote:

"Recall that advertising is when someone pays you to tell your users they'll be happy if they buy a product or service.

Yahoo is an example of a company that runs on advertising. Gawker is a company that runs on advertising.

Investor storytime is when someone pays you to tell them how rich they'll get when you finally put ads on your site.

Pinterest is a site that runs on investor storytime. Most startups run on investor storytime.

Investor storytime is not exactly advertising, but it is related to advertising. Think of it as an advertising future, or perhaps the world's most targeted ad.

Both business models involve persuasion. In one of them, you're asking millions of listeners to hand over a little bit of money. In the other, you're persuading one or two listeners to hand over millions of money."

Most startups indeed do run on investor-storytime.

[0] - http://idlewords.com/bt14.htm

I've re-read that a few times (and created my own local copy with some simplified and fixed HTML -- it's missing a section heading and has a slew of un-closed anchors). My opinion of it continues to climb. It's well up my list as one of the ten best recently written essays I've read this year. Maciej posts here as "idlewords".

"Investor storytime" is a pretty good insight as well.