That is true, but with the caveat that there are often terms to what investors pay. If I invest $1,000 for 0.000000000001% of your company, but with a requirement that I am repaid $2,000 in the event of a liquidity event (plus some participation), it's not really much of a risk for me: I'm "guaranteed" a 100% return. The valuation is somewhat meaningless in this situation, except maybe in terms of marketing.
Aka "Preferrence shares", for those unfamiliar with the practice. In the example above, it makes the valuation virtually 100 trillions, except, like all valuations, it's virtual.
