There are many varied reasons, and many will never openly disclose theirs :-) but a few common traits can be safely used as examples.
Being (ex) entrepreneur themselves, they get over-enthusiastic too easily and ignore the mountain of challenges and risks awaiting.
They lack the time (and / or interest) to run through an in-depth DD process, trusting their guts instead.
They lack investment banking skills. Understandably so: they used to have laywers and advisors, who no longer work for them nor owe them favours. Yet, this is critical to determine the company's true market valuation range; or they can't structure an investment Term Sheet properly (critical for later rounds, ensuring VCs can engage but cannot wipe out previous small investors), or determine what exit valuation institutional investors need to see before they can invest.
Lack of good deal flow. Many simply 'run out' of quality deal flow within their immediate industry network, so they widen their search and end up investing in sectors they know little or nothing about, with no senior industry contacts to help them...
No longer in charge. One can no longer pick up the proverbial baton and 'do it myself'. The role evolves into subtle persuasion and active support, not execution.
There are many others, but this should give you an overview of some of the symptoms.