Every startup seeking financing from VCs faces two kinds of competition: known and unknown.
Known: Every startup pitch should have a "Competition" slide, in which it lists and (briefly) describes the bases of competition and the companies with whom it competes in the market it's trying to exploit. There are two main variations on how to present this: (1) a "magic quadrant" with two dimensions of competition that result in the startup being alone (or a good distance away from the other listed competitors) in the upper right quadrant, or (2) a matrix with competitor's names down/across one axis, and features/attributes across the other, with all the good features/attributes for the startup filled in or checked, and the features/attributes for the competitors mostly not. VCs, occasionally, chuckle at particularly creative competition slides, but do pay attention to them as a part of the IQ test they implicitly administer to entrepreneurs throughout the due diligence process.
So, Entrepreneurs, you should absolutely have a competition slide, and you should be honest in the depiction of your competitors. VCs, because they see so many deals, usually have a good sense of the competitive landscape, so overly creative attempts to downplay competition can work against you.
Unknown: Equally importantly, however, there is an invisible set of competitors that you may never come to know. These are all the other startups on your VC's desk competing for the VC's attention. All, or certainly most, may never compete with you in the market (or even other areas of invisible competition, such as for talent, PR/press coverage, rental space, etc.), but you need to out-compete them, nevertheless, or you won't get financing.
VCs spend a lot of their time getting pitched. Because VCs are human, even the best, kindest hearted, ones get jaded, or, at least, inured to the process over time.
This means that you need to grab their attention early in the process of engaging with them, from the minute you are introduced (as noted here, you will always need a warm introduction to the VC to be considered at all), through the first presentation you make to them. Elsewhere, I have called this "Create the Aha Moment Early", and urged entrepreneurs to be active in their descriptions of their businesses.
So, be aware of the two different fields of competition. They both require careful thought and preparation.