It does happen. However, as the article you linked notes, they hold the reins a lot tighter when it does. I speak from personal experience, since I ran a startup located in Florida which was funded by DFJ. I can say that it was a different experience than the typical Valley startup; we didn't benefit as much from networking as much as we possibly could have. After the first year, we would have a new funding round every few months, and we had to meet benchmarks to show progress. Even though Tim is a really nice guy and was great to work with, it was very stressful to operate with such a short but continually lengthened (until it wasn't) runway. I wouldn't recommend it to the weak of constitution. However, I can understand why they did it - without eyes on the scene on a frequent basis, they were putting much more trust in us than they were in other startups which they could more easily monitor and guide.