Even Benchmark thinks AI is eroding the venture pact against backing rivals
Venture capital firm Benchmark acknowledges that the traditional rule against backing competing startups is becoming obsolete due to the rapid evolution of AI companies. The firm notes that conflicts of interest are increasingly unavoidable as portfolio companies pivot into each other's markets.
Why it matters
This shift signals a fundamental change in venture capital ethics and strategy, potentially leading to more complex board dynamics and conflicts of interest in the high-stakes AI sector.
For decades, the unwritten rule of venture capital was that a firm doesn’t back two companies that compete head-on. But speaking at TechCrunch Disrupt earlier this week, the partners of Benchmark readily acknowledged that the AI boom is straining that rule.
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