They’ve got billions of dollars of capitalization they can use for public relations and lobbying to bulldoze regulatory oversight.
They’re privately held, so they’re not required to report finance and operations details.
The business model encourages “fake it until you make it” operations. Early investors, who often provide oversight for privately held startups, have every incentive to go along. After all, if the companies fail, investors lose out.
The whole thing is structured for disaster. At least one of these companies is going to turn out to be a fraud of Enronesque or Madoffian proportions. And that’s the best-case scenario — with Enron and Bernie Madoff, the only thing victims risked was money.