It comes out of the culture of co-funding. If you claim to VC Tom that you have other interest from VC Bob, Tom is going to call Bob and believe his word over y

It comes out of the culture of co-funding. If you claim to VC Tom that you have other interest from VC Bob, Tom is going to call Bob and believe his word over yours, which is morally wrong. It means that they're colluding rather than competing, which means they fund (or decline to fund) as a group. That gives VCs lasting power over founders' reputations and their companies. They're no longer passive investors, but actively able to turn off interest in other firms that ought to be competitors. Which means that VCs are no longer competing for deals, but colluding as a group and competing against founders. Obviously, the extortion is rarely explicitly spelled out, but it's implied in the ability to "pick up a phone" and blackball a founder.