VCs are greedy and dumb. They don't care about your product. They care about the potential return. It's dumb money. They were dumb enough to cause a bank run at a bank that catered to them. If that's not a sign of collective stupidity, I don't know what else it is.
They all have lines to communicate with each other to prevent this scenario, but they cried to the government in the end. A bunch of babies.