Which is to say: it really is rational for investors to pursue a course with a high probability of killing the goose, as the alternative is still little or no return.
The post-IPO Reddit would still be on its own, though it might be able to capitalise somewhat on the IPO itself for a time. That it will eventually have to make it on its own as a business does seem clear. And frankly, increasingly unlikely.
But investors don't have to work for someone else's book, just for their own and if they see an IPO as a way out that's an excellent reason not to want in.
The relevant question is what market sentiment is on the IPO valuation, and how much that's shifted over the past month.
History shows that financial bubbles can and do occur. The market is not inherently rational. Who puts what value on the issue and why is a question that's hard to answer. History has also shown that those assisting in IPOs (e.g., investment banks) may commit to making purchases at specific price points in an attempt to bid up prices. Which is to say that the market is neither transparent nor entirely free or fair.
Again: the broader point is that VC manage a portfolio of investments, Reddit is one asset in that portfolio, and that calculus may well consider a 2x return as little different from a 1x or even a loss, relative to the possibility of a 10x+ exit.
Or to use the sportsball metaphor: this appears to be a Hail Mary pass.
And quarterback is about to get sacked.
That we agree on, and it's one reason I'm not sure if the mods that revolted realize how thin the ice under Reddit is.