Please tell me how it really is.

Reddit is built on venture capital. It has raised over 1.3 billion dollars this way. You can find out how Reddit is financed over here.

Reddit is absolutely a startup, and that’s their problem. They never managed to turn their startup into a real business.

IMO this loss-leader venture capital bullshit undercutting real businesses should he illegal. Sadly for most internet users, banning that shit would make most internet services more expensive.