However it was not the rational decision for a fund to do so. You have a) substantially larger voice and also ability to coordinate for better outcomes, for a fund it is no longer a gamer theory 101 standard prisoner's dilemma.

The larger funds could have

- Banded together and made a joint statement ( like they were able to organize and do after the run) reassuring every startup of their confidence in the bank

- Participated in the equity infusion into the bank

- Organized and bought debt in the bank to give it liquidity

- Simply moved their own money as new deposits into the bank.

Just doing a joint statement - which wouldn't have costed them a single penny would have gone long way to reassure the markets and also gained the key guys a lot of clout and established their influence J P Morgan style.