Pinterest is a kind of Internet message board where people post their favorite images of clothes or furniture. It’s a three-year-old company and though it has an estimated 50 million unique monthly users, it doesn’t have any revenue yet.  Still, the investors behind a $225 million round of financing that was announced last week estimated the company’s value at $3.8 billion.  To put that in perspective, the estimated value of Pinterest, based in San Francisco, is about a third of Twitter’s. The micro-messaging service could have $600 million in revenue this year (though it isn’t profitable) and is set to go public in a few weeks.  Even in Silicon Valley, where financiers don’t often let pesky business measures like revenue and profits dampen their enthusiasm for a start-up, Pinterest’s new financing seemed like a reach.  So why the eye-popping numbers? A pessimist would say more big money finding its way to tech start-ups is a sure sign of an investment bubble, because Pinterest is hardly the only young company landing huge investments.  This year, Fab, the designer e-commerce site that hasn’t made a profit, increased its valuation to $1 billion by taking a $150 million investment from the Chinese Internet conglomerate Tencent Holdings. This month, Alibaba Group Holding, a Chinese e-commerce company, led a $206 million investment in ShopRunner, which offers unlimited two-day shipping from retailers, that valued the company at $600 million.  On Friday, AllThingsD reported that Snapchat, the messaging app based in Los Angeles, which also lacks revenue, is weighing a “huge” investment round that would value it at $3.5 billion.  At the very least, that’s a frothy list that argues enthusiasm is once again getting ahead of reality in the tech industry.  The Pinterest investment is also an opportunity to see how big, outside money is added to the mix in Silicon Valley. While the latest Pinterest round included Valley heavyweights like the venture capital firm Andreessen Horowitz, the bulk of the money came from Fidelity Investments, the mutual fund giant in Boston.  And Fidelity plays by different rules than the typical tech investor.  Cash-rich financial outfits like Fidelity, which has more than $1.7 trillion in managed assets, are not as worried about hitting the home run ball as typical tech investors. Double your money when you invest $200 million? That’s fine for Fidelity. And if the investment doesn’t work out, it’s still minimal for a company that large.  That would never do for venture capitalist firms. First, they can’t throw around that kind of money. Second, those firms typically promise their own backers a return 10 times or more on the money they’ve put into a company. They have to. Many of the companies they put money into never pan out, and they’re always looking for the next Facebook or Google to make up for the numerous bad bets.  Venture capital is a high-risk business. As risky as throwing $200 million at a company with no revenue? It’ll be a while before we know the answer to that one.  Likewise, when foreign financiers put money into start-ups, they’ also don’t look for huge returns. Following the lead of Yuri Milner’s investment company, which put money into companies like Facebook and Twitter, they also have more modest goals: turn a profit, improve their cachet among the start-up community and — as is often the case — learn from the companies in which they are investing.  “It depends on the glasses you’re wearing whether these investments are too high,” said Mark Leslie, a managing partner at his own venture firm, Leslie Ventures, and a lecturer at the Stanford Graduate School of Business.  Fidelity declined to comment on its investment. Pinterest said it was using the money to invest in the core of the company and international expansion, but would not discuss the valuation.  Now the idea of Silicon Valley’s investment community — which brought you Pets.com and other Web wonders — wagging fingers and noting that others are driving irrational valuations might strike some people as, well, funny. Or sour grapes.  But start-ups court risk when they lure investments at such generous valuations. As I’ve written before, once a start-up reaches a $1 billion valuation, they limit the number of big companies capable of acquiring them.  Of course, it can be difficult to say for certain how much a young company should or should not be worth. Private investors may gamble that a fast-growing start-up with no obvious revenue may figure out, as Google did, how to pair a smart business model with millions of users.  That said, it can be hard to figure how these valuations add up.  Take Square, the mobile payments start-up best known for its slick credit card reader. Last year, it raised a reported $200 million from investors that valued the company at $3.25 billion.  Square is expected to process $15 billion in transactions in 2013. Compare that with MasterCard, which processes more than $3.6 trillion in credit card transactions annually. MasterCard is valued at $90 billion on the public market. If the market were applying valuations based on transaction volume alone, MasterCard would be valued at almost $800 billion.  Not surprisingly, “unlike Square’s previous financing rounds, which prominently featured big venture capital names like Sequoia Capital and Kleiner Perkins Caufield & Byers,” its most recent round was not led by a traditional Silicon Valley backer, The New York Times reported at the time.  Instead, the majority of the financing came from Suhail Rizvi, the head of Rizvi Traverse Management, a private equity group. Rizvi Traverse and Square both declined to comment about the company’s financing.  Does Mr. Rizvi, who is also among Twitter’s biggest investors, have a greater appetite for risk than tech’s usual financiers? Perhaps.  Or maybe, as Mr. Leslie put it, he’s looking at his investment with a different set of glasses.
A sign that enthusiasm might be getting ahead of reality: the number of Internet companies valued at more than $1 billion even though they have no profits.