In my experience this just encourages the team to build an application that's a glorified power point presentation, because the set of things that's useful for demoing stuff is a pretty small subset of what's actually needed for usable software. This approach only works if your team has the discipline to not output bullshit that just improves the demo, and if the team does not have incentives/pressure from those abov…
That's why it's always advisable to have an actual release of the features at demo day, or in the case of exceptions, the next demo day. And if you don't have internal or external customers, at least released to a QA team that's user testing or building prototypes with it (if it's dev oriented).
There should always be something early on demonstrating evidence that it's ok in production.