The reason is too much cash takes the focus off product and turns it inward and creates a zero sum competition internally among managers to loot the excess money instead of focusing on growth from real revenue. Economically, at least the fire would be deflationary. Cash is literally fuel, and unless you can put it into something that grows, it's a volatile nuissance whose fumes impair judgment. If you want to destroy a product and a company, get them indexed on unlocking a covenant or raising another round where the execs get bonused out of it.
Cash is what you have when you don't have product market fit and (I think) it creates a culture that repels customer desire. Why make anything someone wants when you have enough runway to tinker with what you want for yourself, maybe some follie that you can speak at conferences about, or the best devops and ci/cd pipeline to nowhere?
I'm harsh about this because investors buy a ticket for a growth ride, and the best ones are diversified enough that they really do just buy the ticket and take the ride. But watching engineers iterate on refining the exeuction of solved problems, managers focus on "getting resources," and sales acting like the abused secret side partner to some flagship account they're fronting to attract investor/acquirer interest - are all just spinning wheels, imo.
There are lots of legit complaints about VCs, particularly around financial engineering, and some negative culture issues from the teams they can parachute in, but even as an admitted serial IC technologist, the article embarasses me.