Sunken cost fallacy

"Sunken Cost" is something easy to hear but hard to parse.

I have recently been in some discussions with people saying: if an investor already invested so much money into a company, they will keep investing until it's successful.

This is a fallacy that extends beyond Venture Capital investment in startups.

Keep pouring money into something may just lead to higher loses (for instance see Net present value).

The fallacy is easy to fall into in daily life, but investors a quite aware of it. That's why they hedge investments, and cover the downsides (for instance, how to liquidate assets to cover the investment, what are the collaterals, etc.)