R&D always costs more than production, so wouldn't backers in theory pay more than market value to be first and part of the creation cycle?
Designing the production flow, jigs and fixtures, quality control, training up people, all requires money and engineering time. The business and sales side of things requires time and money.
I've seen numbers of products stall out because the developers fail to get enough funding to go into production. Also in a lot of cases markets move slowly. You can introduce a product and the buyers will just nibble for the first year or two if you're not an established name. Your company has to be able to keep the lights on during that time.
Both wildly naive it seems, but I suspect that's how people imagine it. The demo videos usually show a "done-ish" product and downplay how much more needs to be done to actually ship it. And they always talk about how strong their team is and how it's totally doable even though it's not done yet.
The wifi lightbulb people come to mind. Total smoke and mirrors demo video and it took a major multinational getting involved to actually ship the product. That's the Belkin WeMo.
It's the "trust us" attitude and the generally soft spoken videos and collateral doing exactly what marketing is supposed to do. In other words it all seems so genuine, possible and down to earth in tone and builds up a trust factor. Even though the people behind the product are complete unknowns. Take away those videos and there would be a drastic drop in funding and not just because the videos explain features or benefits either or can go viral.