"Second, because your skin in the game probably doesn't change, instead the total amount of skin in the game gets larger."

But the dimensions of the game grow as well, and that is where mistakes can be made.

Some founders are probably better bosses/managers in a collective of five than in a collective of fifty. If the company grows slowly, they may improve their skills/catch up. If it grows in a sudden leap, which is well possible with a large injection of cash, the space for making bad decisions from ignorance or lack of experience grows as well.