I can agree that many investors will assume that because other firms invested, that is a "signal" that they use to invest themselves, and in that sense raising

I can agree that many investors will assume that because other firms invested, that is a "signal" that they use to invest themselves, and in that sense raising money can give you momentum. But I disagree that that is the same thing as the sunk cost fallacy. What I am claiming is that investors are not likely to reinvest once they realize the company is not performing as expected. It's only if they've spent their own money, and then put more money in a subsequent round that they are prey to the sunk cost fallacy.