I wonder if Patreon ran into a similar problem trying to stay afloat without handing more control over to VCs.
I have no inside knowledge, but Patreon seems to be straining to meet the needs of its creators while also reaching the scale its investors expect.
1) The founder makes the case that if they reach a critical mass of "X users," or "Y Transaction volume," or another relevant metric there will be a windfall to be shared.
2) The investor evaluates the viability of the plan based on macro factors and the track record of the founders.
Every startup pitch has a certain amount of uncertainty. In this case, the market for a Patreon-like service was well-understood. The risk in this deal was whether or not the team could actually execute. There's no definitive way to tell if a team will be able to execute or not until you invest.
It turns out that this team has a strong pedigree in community-building, but perhaps less in the day-to-day operation of a market place in a market with an entrenched competitor. They also seemed to be focused as much on achieving ideological milestones as financial ones (which is fine!).
The outcome is unfortunate, but that doesn't mean the bet was bad when it was made.
Anyway, Facebook, Twitter and etc started and grown a lot only with the promise that they would be viable someday. It worked out in a big way for Facebook at least.