That process takes a long time. Most startups would be out of business by then.

Just about everyone in the US who has a business bank account faces that same issue. There have been hundreds of bank failures before this. SVB account holders are not unique and probably won't get special treatment.

Then they should have only kept the minimum funds necessary for transacting business in that bank account and kept the rest in short dated treasury bills at another institution(s). Part of being a company is having a treasury department to manage the cash flow needs, whether that is one person or ten.