The VCs who advised them to behave this way, if you ask me. In my ideal resolution, the government does their own valuation of the startups, rescues in excess of insurance the ones that seem promising, and proportionally takes the VC equity in these companies that got special rescue consideration. If the investment is getting bailed out, the VCs who started this mess shouldn’t get their equity returns. They can invest again in the next round if they really believe their convictions.

Practically, the VCs should have made some bridge loans to solve the short term problems while we wait to see what comes out of receivership. Some did, and good on them for sticking with it in the hard times.