This is what people said about Theranos and uBeam.

When the upside is high enough, it makes sense to just throw money on it. The risk is almost infinitely high, but the reward is almost infinitely high. Or, at least in the cases of Theranos and uBeam, that was true.

Just because investors throw money at something doesn't mean that it's legit. They're gambling, they like the odds, and they have nothing to lose because they get paid either way (and this is only a tiny fraction of what they need to invest anyway).