Ok, I see a lot of points here but reading them I do not get the sense that you really understood what I wrote, and they don't seem to be connected to what you wrote before. So I guess the best option forward is to just go back to what you actually said so that you can try again:

> the question is if FF had done nothing, would they have been better off?

Yes. We know that FF did not get their portcos fully out in time, including the only company they need to return the fund. Their portfolio downside might be partially mitigated—they totally lose, let's say, 40% of seed-B portcos instead of 70%—but it doesn't really matter because a non-backstopped run kills 80% of seed-B startups immediately.

The rational move for companies is to pull out but for VC firms the rational move is to encourage people to stay.