Benchmark Says AI Growth Is Straining Venture Firms' Exclusivity Rules

Benchmark partners said AI-driven changes to startup plans are making it harder for venture firms to avoid backing companies that eventually compete, testing an unwritten expectation of exclusivity. At a conference this week, Benchmark partner Eric Vishria described portfolio conflicts as a consequence of fast-moving companies. Startups can change direction and enter markets served by another company backed by the same investor, he said. Vishria said Benchmark remains committed to its founders and keeps information learned through those relationships confidential. Vishria said exclusivity matters most at the earliest stage, when Benchmark typically invests. But that boundary can become harder to maintain as a company changes its product or strategy. Benchmark has built 10- to 15-year relationships with founders, beginning at an early stage.

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