Venture investors and tech founders are in “sheer panic” after Silicon Valley Bank, a prolific lender and important banking institution for the sector, said that it was taking steps, including a share sale, to cover large losses on its balance sheet. 

Now, one billionaire hedge fund investor is resurrecting a policy idea from 2008—a government bank bailout—to stave off the threat of a new financial crisis. 

“The failure of [Silicon Valley Bank] could destroy a long-term driver of the economy as VC-backed companies rely on SVB for loans and holding their operating cash,” tweeted Bill Ackman, founder of Pershing Square Capital Management, on Thursday evening. 

The failure of @SVB_Financial could destroy an important long-term driver of the economy as VC-backed companies rely on SVB for loans and holding their operating cash. If private capital can’t provide a solution, a highly dilutive gov’t preferred bailout should be considered.

— Bill Ackman (@BillAckman) March 10, 2023

“If private capital can’t provide a solution, a highly dilutive gov’t preferred bailout should be considered,” he continued.

Venture investors interviewed by Fortune are also grasping for 2008 references. “SVB is not going to go down,” one venture investor told Fortune. “It’s, like, too big to fail.”

Shares in SVB Financial Group, the parent company of Silicon Valley Bank, fell 60% on Thursday, one day after the bank said it lost $1.8 billion selling its investments, and would sell shares to raise $2.2 billion. The plunge dragged down banking stocks across the U.S. markets.

If Silicon Valley Bank collapses, its customers would not be able to either access their funds or borrow more money, which could freeze their whole operations. That fear is driving startups and venture capital firms to consider pulling their money from Silicon Valley Bank to protect their money—and potentially sparking a bank run. 

On Thursday, Garry Tan, president of startup incubator Y Combinator, suggested that any startup worried about bank solvency issues should lower their exposure to just $250,000, the maximum amount protected by federal deposit insurance. 

“Your startup dies when you run out of money for whatever reason,” Tan said in an internal message seen by the Wall Street Journal. 

SVB leadership is now trying to reassure customers that the bank is not in danger, and asked for their trust. “I would ask everyone to stay calm and to support us just like we supported you during the challenging times,” CEO Greg Becker told venture capital firms on a call, reports The Information. 

Silicon Valley Bank did not immediately respond to a request for comment.

What is ‘too big to fail’?

The idea of a bank being “too big to fail” gained prominence during the 2008 financial crisis. Some financial institutions were considered too important to be allowed to fail, as central bankers argued that letting them go under could topple even more banks, creating a complete collapse of the financial sector. 

In 2008, the U.S. government both took over troubled financial institutions like American International Group (AIG) and purchased $700 billion in toxic assets from major banks like Citigroup, Bank of America, JPMorgan, and Wells Fargo. 

Ackman on Thursday dismissed the idea that another bank would save SVB, citing an example from 2008: the takeover of investment bank Bear Stearns by JPMorgan. “After what the Feds did to [JPMorgan] after it bailed out Bear Stearns, I don’t see another bank stepping in to help [Silicon Valley Bank]” he tweeted.

After what the Feds did to @jpmorgan after it bailed out Bear Stearns, I don’t see another bank stepping in to help @SVB_Financial.

— Bill Ackman (@BillAckman) March 10, 2023

In March 2008, JPMorgan stepped in to acquire the failing decades-old investment bank and prevent its collapse. The Federal Reserve helped back the deal with $30 billion in support for Bear Stearns’s mortgage-backed securities. But the deal also meant that JPMorgan was on the hook for the legal troubles of Bear Stearns and the other troubled institutions it acquired. The investment bank eventually spent $19 billion in fines and settlements with customers and regulators. 

JPMorgan CEO Jamie Dimon now considers saving Bear Stearns a bad idea, writing in 2015 that “we would not do something like Bear Stearns again.”