For example, a VC may invest $10 million in a company, in exchange for 10% of the stock in the company. At the time of investment, is the company worth $100 million? Not at all! But the VC hopes they'll be worth $200-$400 million in a few years, and they can double their money or more.
This is not true. It is actually the opposite of this. VC is generally able to command a discount from the expected value of a business because of the lack of potential fundraising options, and the other options that are available would cause the company to incur significant, permanent additional costs.
Shares in a new startup are usually vastly overpriced for a good reason: they need the money in order to make a business. And bitcoin exchanges and developers need money, too. Someone has to pay the lawyers in Mt. Gox's court case against the French bank later this month, and I'm glad to have contributed towards their expenses. And some early adopters are paying to develop FPGA miners, web site plug-ins, ATMs, and many other infrastructure tasks that take money and time, and I have, indirectly, contributed to their development costs, too. It's a zero sum game between the buyers, sellers, exchanges, and miners: no cash is being destroyed, it's just getting redistributed. And most importantly, none of it is going to Wall Street.
I'm holding, and will even likely buy more coins next month, at whatever the price it is then. And yes, a rant makes me feel better about having a lower face value on my held bitcoins. Having my money in the bitcoin economy instead of in a big bank feels good, even if the face value is currently less than I put in.
I do agree with the overall theory of your post that bitcoin will likely rise over time by a lot and that buying/holding bitcoin is very risky and is far from a certain investment, very similar to buying stock in a startup
