You can only do that if you can afford it: I'm pretty sure reddit never made money and was bleeding it quite profusely. At some point you have to start making money, but reddit (and most other internet/digital companies) valued growth at all cost. Now they are probably billions in the hole and they have to look for outside investment.

You also make the strong assumption that executive staff/founders actually care about the survival of the company or the product: If they cash out at some point, they still win in the transaction.

The cycle is always predictably the same:

1. Found the company

2. Get an initial round of investment

3. make it seem valuable (i.e. growth at all cost)

4. Second investment round (people now have FOMO "this could be the next Facebook!")

5. Continue growing (by now initial investors and founders have cashed out with profit)

6. Another investment round/sell/go public.

7. After going public, people notice that you don't make any money and have no way of ever making money (think WeWork)

8. Company's stock tanks/Company goes bankrupt.

At no point in that process has the product or the company ever mattered: As long as you can make it seem like it works, you can make a profit.

This is why venture capital is almost always a red flag: The investors make money not through quality product, but through growth. They can sell a great product that nobody knows about or they can sell well marketed crap that grows fast and makes them billions. By chance one or two of these companies will survive despite this and have a lasting impact, which breeds even more hype for the next round.