You don't need to imply that SVB is unstable to say that the VCs should have been diversified away from it or cause a run on the bank. It's simply a pretty basi

You don't need to imply that SVB is unstable to say that the VCs should have been diversified away from it or cause a run on the bank. It's simply a pretty basic business practice to identify risks and try to mitigate them, and big businesses do this all the time. A massive part of Intel's sales organization with big customers are constantly trying to play this cat and mouse game where Intel will try and sell you stuff that locks you into Intel, and the customer will constantly be making moves to avoid getting locked in to a single vendor. You say the incentive for co-ordination isn't there, but quite clearly this demonstrates a massive incentive for VCs to be looking at the common dependencies of their companies and mitigating them. They actually do this really frequently with start ups and cloud providers - it's a very strategic decision whether as a small company you go with Amazon vs Google vs Microsoft for your cloud, why? Because you're handing over bargaining power in what is likely to be a potential acquisition. I agree that VCs haven't been thinking about things like that, but they absolutely should. It was always crazy that founders were getting mortgages from the same guys that were doing their business banking.