(Bloomberg) -- Silicon Valley Bank’s collapse laid bare divisions in the usually clubby venture capital community, with some investors blaming their counterparts for igniting a panic that brought down a beloved startup business partner. 

In the chaotic early hours of the bank run on SVB, many VCs advised their companies to yank their deposits from the troubled lender. In the aftermath Friday, other investors publicly lambasted their industry for its role fueling the flames. “I’d like to formally thank my peers in the venture community whose stellar leadership over the past 48 hours triggered a run on deposits at Silicon Valley Bank, ultimately toppling one of the most important institutions in our ecosystem,” tweeted seed investor Brad Svrluga. 

There's no clear consensus on whether to celebrate or blame VCs who told founders to pull out their money. “It was a tightrope,” said Benedikt von Thüngen, founder of healthcare startup Sanome, who believes that companies had a fiduciary duty to pull their funds even if they were broadly supportive of the bank. 

On Thursday, as SVB began to collapse, some investors visibly struggled over what action to take. Hustle Fund investor Eric Bahn urged companies move their funds out of SVB in a tweet, then deleted it, and on Friday joked that Twitter owner Elon Musk should shut down the platform altogether. “Would be kind of nice for @Elon Musk go shut off twitter until we get a handle on this banking crisis,” he wrote “So much FUD here!” 

VCs tend to flock together. They like to invest in the same companies, follow the same industry trends, and even wear the same performance vests. So the level of open disagreement in the industry in the days following the bank run has been particularly notable. “Panic wasn’t the way to handle it,” General Catalyst Chief Executive Officer Hemant Taneja said over the weekend. In a statement co-signed by more than 600 VC firms, investors broadly described the events leading to the bank’s downfall as “deeply disappointing.”

The VCs did come together on one thing though: asking for intervention to safeguard vulnerable startups’ deposits. The group of investors’ statement said that they would continue doing business with SVB, calling for it to be saved. Y Combinator circulated a petition signed by more than 5,000 founders urging US regulators to step in. And in the UK, dozens of of leading venture capital firms signed a pledge of solidarity with SVB.

Perhaps aware that calls for help from moneyed investors might not be broadly palatable in Washington, firms including the famed Y Combinator encouraged their founders to tell their own story on Twitter. Indeed, direct cries for help from VCs didn’t always land well. “I’m not asking for a bailout. I’m asking for banking regulators to ensure the integrity of the system,” tweeted Craft Ventures’ David Sacks, who also appeared on video over the weekend in his podcast. Others echoed the thinking: “It’s entirely rational to have libertarian views and still want a functioning system,” said Hussein Kanji, a partner at London-based Hoxton Ventures. “If the system breaks apart, capitalism falls apart.”

But the sentiment was widely critiqued: Sacks is famously libertarian and frequently takes issue with the Biden Administration on his show. On Tuesday, Sacks tweeted that his politics were not “pure libertarian” and that “even libertarians understand the need for government to prevent bank runs.” Other pleas for US intervention were also mocked, including within the startup world.

Michael Arrington, founder of TechCrunch and Arrington Capital, weighed in: “One thing I learned this last weekend is — most capitalists become fast socialists when they think they lost all their money.” Investor Keval Desai wrote: “Oh the irony of today’s VCs who are calling for a govt bailout who yesterday asked their cos to pull out & caused the run in the first place.” Opinions diverge over what exactly constitutes a bailout. Going by the traditional view of saving the institution and its shareholders, the government’s action didn’t meet the bar; if a bailout means saving the depositors, it did.

VCs weren’t the only ones disappointed with VCs. In an unusual turn for the business world, the sentiment spilled over into the mainstream. Politicians from both sides of the aisle came together to agree on their distaste for tech millionaires. Politics and culture magazine Slate published a well-trafficked anti-VC essay. Nassim Nicholas Taleb, who coined the term “black-swan event,” complained about tech investors even as some referenced his work while describing the crisis. And The Office star Rainn Wilson tweeted, “Silicon Valley Bank last week: CAPITALISM RULES!!! Silicon Valley Bank this week: SOCIALISM PLEASE!!!” 

One UK-based entrepreneur, who asked to remain anonymous, said he was angry that the same VC investors who encouraged founders to use Silicon Valley Bank, leading to dangerous concentration, were the ones urging startups to pull their funds when it looked like the bank was in trouble. Two days later they were publicly pledging to support SVB again. It looked like “self-serving hypocrisy,” he said. 

Some investors defended their decision to warn their companies. On Sunday in a Twitter Spaces chat, investor Jason Calacanis, who had been sending all-caps missives about the stakes of the bank failure all weekend, said that warning startups about SVB was like pulling a fire alarm after seeing a fire — a responsibility in times of crisis. “I had a little panic, in honesty,” he said. “I was a little panicked.” 

--With assistance from Mark Bergen and Lizette Chapman.

(Updates with David Sacks tweet in the eighth paragraph.)

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