Alot of startups arent profitable because they are ran by people that have prestigious pedigrees, but dont know what theyre doing/have no experience. So they blow all kinds of money on bad ideas/poor execution, but are still able to raise more funding.

Eventually for some of these companies something clicks, and they do get to something of a valuable company.

This is what ZIRP was.

Alot of people dont know that investors are okay with this, they have 20 Million to push into a company, and figure that something might pop out.