Why should economically rational depositors leave more money than they need for short-term working capital at the SVB at ~0% when a Treasury bill pays ~5% and carries less risk? Back when rates for everything were ~0%, a startup might lazily just put everything in the bank; but when interest rates increased, the reward for moving and the risk of staying both increased. I agree (and already noted above) that depositors are often irrationally sticky in practice; but nothing obligates them to be, and these ones weren't.

Of course most of the money left in a self-sustaining bank run, not directly for the reason above. There's a quite rational reason for someone to start that run, though. That reason wouldn't exist if the bank were well-capitalized on a MTM or NPV basis.

The SVB's expectation in that 10-K is a model of depositor behavior, predicting that depositors will leave their funds at a MTM-insolvent bank earning below-market interest for long enough for the SVB to earn its way out of the hole. That prediction obviously didn't come true. So doesn't that just mean their model was wrong, and shouldn't be relied upon elsewhere either?