It's definitely worth remembering that what sounds idiotic in specific cases is often either gambling or a principal-agent problem on a systemic level.

Growth potential and demand elasticity are both hard to predict, so VCs are betting on high growth and trusting that one high-demand win can pay off 100 or 1,000 losses. (The people chasing proven revenue with unknown growth potential are banks, investing in things like expanding existing stores.) Did MoviePass show a <1% chance of succeeding? Probably. <0.1%? I'm not so sure.

As for founders... Often, they're gamblers or extremely self-confident. Less generously, the field attracts a lot of people who are happy to burn someone else's money on a ridiculous narrative, while their actual focus is on getting acquired or elevating their personal reputation. (And heck, there are VCs doing this too. Consistently returning 25% on your fund is nice, but funding Snapchat will get you a job at a fancy Sandhill office, and funding Facebook will get you treated as a rainmaker and even a political player.)