Chris Degnan’s move from serving as an adviser to Factory’s board of directors to becoming chief revenue officer at its rival Cognition has turned into a public dispute over confidentiality and conflicts of interest in the artificial-intelligence-powered coding-agent sector.
Matan Grinberg, Factory’s co-founder and CEO, said in a post on X on Wednesday that he had ended Degnan’s role as a board adviser, accusing him of sharing confidential information with Cognition, which Grinberg described as Factory’s largest competitor. About two hours later, Degnan announced his joining Cognition on X and LinkedIn, denying the firing account and saying that he resigned when he informed Grinberg that he would accept the new job.
Two Conflicting Accounts
According to Grinberg, Degnan had previously acknowledged having a “fleeting” conversation with an executive at Cognition, but said he did not want to work for the competitor. Grinberg added that Degnan disclosed on Monday that he had been in ongoing discussions with Cognition, raising concerns about the information he had accessed during Factory meetings and whether he had shared any of it or might share it in the future.
Degnan, in contrast, said that the last Factory board meeting he attended was weeks before any communication he had with Cognition, and denied sharing confidential information. He also said that Grinberg offered him a full-time position at Factory when he informed him of his resignation, but that he declined it.
Degnan previously served as Snowflake’s first sales employee and then spent 11 years as its chief revenue officer. He was a partner at RPT Partners, an investor in Factory, for five months, and also works as an adviser to startups in the go-to-market space at investment firm Iconiq. He announced that RPT Partners and its managing partner Chad Peets would work with Cognition.
Two Big Bets in One Market
Factory was founded three years ago in San Francisco and develops software agents capable of carrying out software tasks with a high degree of autonomy. The company raised $200 million this month at a valuation of $5 billion, and its customers include Nvidia, Blackstone, Royal Bank of Canada, Palo Alto Networks, Adobe, and T-Mobile.
Cognition, the developer of the Devin coding agent, raised an additional $2 billion in the same month at a valuation of $48 billion, and its customer list includes Mercedes-Benz, NASA, Goldman Sachs, and Citi. Khosla Ventures invests in both companies, which increased the sensitivity of the debate over the boundaries of investment relationships when companies operate in the same competitive market.
Why Does This Matter?
The source does not establish that Factory information was actually transferred to Cognition, and the two sides offer different accounts of the timing of the discussions and the resignation. But the incident practically exposes an important governance vulnerability: access to board discussions or meetings may conflict with negotiating a job at a direct competitor, even before officially starting work.
Other investors and executives entered the dispute. Vinod Khosla, founder of Khosla Ventures, accused Grinberg of lying and described Factory as a “second-tier” competitor; while Keith Rabois, a partner at the firm, said that interviewing with a competitor while attending board meetings and accessing board-level information was unethical. Scott Wu, co-founder and CEO of Cognition, said that his company was not interested in Factory’s information, while emphasizing his respect for the smaller competitor.
The case comes as the roles of investors and board members at competing companies face increasing scrutiny; reports said that the U.S. Department of Justice is investigating roles held by partners from Andreessen Horowitz on the boards of competing companies. The source does not specify whether Factory or Cognition took legal action, and the company and the parties involved did not immediately respond to requests for comment.