There's a comment here from an earlier note that asks "...at what point does an innovative idea or product become worthy of an investment?"
I would ask you to consider another question: "What's the alternative to a third-party (i.e., not friends and family) investment for my startup?
I asked an entrepreneur this question the other day. He was looking for several hundred thousand dollars essentially to go and try an internet idea. After a short discussion, I think he generated some great insights about ways to get to the same place on little or no outside investment.
There's always another way.
In my case, in the first company, it was early customer selling that provided the startup cash.
Most companies start without investors and never have them. That's not because there isn't enough money; it is because the companies don't need or are not appropriate for funding by high-expectation, high-risk investors.
These companies find capital primarily by finding customers and understanding trade-offs. They get a purchase order, open for business, begin working on projects to generate cash, or in a thousand other ways.
Their alternative is not to keep looking for investment for years, but rather to find ways to create a real alternative.
Sometimes that early growth capital is precedent to a big investment. (Not often, but sometimes.) An example of that is pre-revenue science start-ups with grant funding. Other times, early success and acceptance allows a company to look for growth capital on much more favorable terms had they not had the early success. (Remember Vermeer? Look it up.)
Other times, early success means keeping the equity "in the family" of entrepreneur and colleagues.
For those who don't figure it out some people just keep looking. After some period of time, absent any change in the company's results, those in the know have heard the story so often that they ignore it.