I was an early hire at a data protection startup which inexplicably began behaving like a much larger and profitable company when product was still very flawed and barely usable. ~$100M of funding and many years later, that company has yet to become profitable and rather than shudder the doors, merged with a competitor. All common stock rendered completely worthless in the process, not that there was any hope left after all the dilution anyways.

What I saw was a whole lot of empire building. Things seem to snowball very quickly once managers start getting hired and they're all aspiring for greater head count.