Even Benchmark thinks AI is eroding the venture pact against backing rivals

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For decades, the unwritten rule of venture capital was that a firm doesn’t back two companies that compete head-on. Factory’s CEO alleged Degnan had discussed a job at Cognition while privy to Factory’s board-level discussions. Powerhouse investor Vinod Khosla sided with Degnan on X, blasting Factory’s CEO and calling the company “a struggling second tier competitor. ” Khosla Ventures backs both companies.

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