Last week, an entrepreneur lamented to me that he’s met with half a dozen venture firms recently, half of which told him that they’re “looking for the next Pinterest,” the pinboard for online photos that’s among the fastest-growing social media sites in history.

“Anything that utilizes the social graph or that has low cost of customer acquisition has the potential to get big fast because distribution happens so quickly,” says Charles Hudson, a venture partner at the early-stage venture firm SoftTech VC. But the “Pinterests of the world…they just look different,” he notes.

Hudson thinks his colleagues’ fascination with all things Pinterest makes good business sense. “There’s an argument to be made that it’s a very sane strategy to wait for things to break out, then pile in money at what appears to be an aggressive valuation,” he says. Hudson points to Facebook, Zynga, and DropBox, all of which have received hefty financings that may have shocked the industry at the time they were made but have grown exponentially more valuable over time.

Certainly, funding the Next Big Thing has paid off for Andreessen Horowitz, which has managed to raise $2.7 billion in its less than three-year history by jumping into high-priced rounds for Groupon, Facebook, Twitter, and Zynga. Greylock Partners and Sequoia Partners have also seen big wins by aggressively investing in market leaders. For example, both were part of the syndicate that invested $53 million in LinkedIn in 2008 at what seemed at the time to be a very rich $1 billion valuation. (Today, the publicly traded company enjoys a market cap $8.7 billion.)

Still, when greater numbers of venture firms begin waiting on the same small number of winners to emerge, you just know it’s bad news for their limited partners. Indeed, economist Paul Kedrosky wishes more venture firms would forget trying to “find the next Pinterest” and start focusing their attention on companies before they’re obviously creating and defining their categories.

“Two strategies work in venture to a degree,” says Kedrosky. “’There’s ‘original’ venture, where you get in early and put in small amounts of money and as a company succeeds you add more money or you otherwise walk away.” The most enviable example is Accel’s early investment of $12.2 million in Facebook, poised to return more to its investors than any investment in the history of the venture industry (roughly $10 billion, by Bloomberg’s estimate).

The second model that VCs have adopted in recent years, is “where you get in at different price points – including via secondary exchanges,” notes Kedrosky. Venky Ganesan, a managing director at Globepan Capital Partners, calls it “logo” investing. “The fact that you have no board seat or inside information aren’t details that a lot of people understand,” Ganesan says.

Both approaches are legitimate, says Kedrosky. But the latter won’t work much longer, in his view. “It’s momentum investing and momentum investing is predicated on something transient, that there’s a greater fool willing to pay more than you.” While putting “big slugs of capital into companies in bigger rounds or through secondary shares is working right now, we know from the public markets that [the model] works until it doesn’t. And then you abruptly lose half your money.”

Watching it play out is “oodles of fun,” says Kedrosky. “But it will end really badly.”

Ganesan isn’t quite so fatalistic. Though he agrees that investors who continue chasing “hot deals,”  will ultimately end up with lousy returns, he doesn’t necessarily dismiss runaway companies as over-hyped.

“When something is getting the kind of engagement that Pinterest is, you know there’s something there,” says Ganesan, adding that the “good investors think about the essence of why.”

Pinterest, for example, tells Ganesan that “there’s a strong interest in people being able to put together collages.” Going to the next level, Ganesan sees “women wanting to put together something beautiful and artsy without building it from scratch.” But the deeper-seated trend into which Pinterest is really playing? Says Ganesan: “It’s that people like self-expression — while doing very little work.”