Leer en español: Benchmark: la IA debilita la regla VC de no invertir en rivales

Venture capital’s old unwritten rule, that a firm does not back two companies competing head-on, is under strain from the AI boom, and even Benchmark now says so. Its partners said it on stage at TechCrunch Disrupt this week, as reported by TechCrunch on 15 October 2026 (TechCrunch).

What happened

Asked whether the pact still holds as portfolio companies move into each other’s markets, Benchmark partner Eric Vishria said: “The harsh reality of this world is every company is evolving very quickly.” Companies pivot, he said, and “you are going to get conflicts.” He said Benchmark stays committed to each founder and keeps what it learns confidential, adding: “We are not product or technology experts.” Exclusivity is still “really important” at the earliest stage, he said.

Partner Chetan Puttagunta said AI speeds this up: as the cost of building software “effectively goes to zero,” founders try to claim more ground and run into each other. He separated a direct rival at the start, which he called “an easy answer,” from a company that drifts into another’s turf later. Peter Fenton called the issue “kryptonite” and said transparency is the rule: “There shouldn’t be the surprise after the fact.”

Why people are arguing about it

The comments land two weeks after a public fight we covered on 7 October. Factory’s CEO alleged that a board observer and adviser, Chris Degnan, discussed a job at rival Cognition while privy to Factory’s board talks; Degnan denied sharing anything confidential and then joined Cognition. Vinod Khosla, whose firm backs both companies, sided with Degnan and called Factory “a struggling second tier competitor” (TechCrunch, 30 Sep). TechCrunch also notes that the biggest AI labs now share dozens of the same investors. Investors say overlaps are a fact of fast-moving markets and confidentiality protects founders. Critics ask how a founder can trust a board member who also sits with the competition.

What it means if you’re building a startup

Do not assume your investor will never fund a rival. Before you sign, ask three questions: which portfolio companies could compete with you today or in two years, what the firm does when a conflict appears, and who sees your board materials and data. If your investor gets a board or observer seat, put confidentiality and conflict rules in writing. And run reference calls with founders whose companies ended up competing with another of the firm’s bets. Our investor red flags guide has a 15-minute check you can run on any investor.

Sources

• TechCrunch, “Even Benchmark thinks AI is eroding the venture pact against backing rivals” by Connie Loizos, 15 Oct 2026: techcrunch.com
• TechCrunch, on the Factory CEO’s allegations against his board adviser, 30 Sep 2026: techcrunch.com

Written by Fabian Cisneros. Educational only — not investment, legal or tax advice. See the full disclaimer.