{"id":788222,"date":"2026-10-01T05:48:08","date_gmt":"2026-10-01T05:48:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/788222\/"},"modified":"2026-10-01T05:48:08","modified_gmt":"2026-10-01T05:48:08","slug":"factory-ceo-just-accused-his-vc-board-adviser-of-spying-for-cognition","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/788222\/","title":{"rendered":"Factory CEO just accused his VC board adviser of spying for Cognition"},"content":{"rendered":"

Matan Grinberg, co-founder and CEO of the AI coding startup Factory, said in a post on X<\/a> on Wednesday that he fired VC Chris Degnan from his role as a board adviser. Grinberg alleges that Degnan shared confidential information with Factory\u2019s biggest competitor, Cognition.<\/p>\n

Two hours after Grinberg\u2019s post, Degnan announced<\/a> on both X and LinkedIn that he had joined Cognition as its chief revenue officer. He also subsequently refuted Grinberg\u2019s allegations, saying in a separate X post<\/a> that he wasn\u2019t fired but resigned when he told Grinberg he was taking the job.<\/p>\n

Degnan was Snowflake\u2019s first sales hire and later spent 11 years as the data company\u2019s chief revenue officer. For the past five months, he has been a partner with RPT Partners, a Newport Beach, California, investor in Factory. Degnan is also a go-to-market adviser to startups at the much bigger venture firm <\/a>Iconiq<\/a>, a role that dates back to October of last year.<\/p>\n

Three-year-old, San Francisco-based Factory is an agentic coding startup whose AI agents can carry out programming tasks largely on their own. The company raised $200 million at a $5 billion valuation<\/a> this month from Khosla Ventures, Blackstone, Sequoia Capital, Insight Partners, and others. Its customers include Nvidia, Blackstone, Royal Bank of Canada, Palo Alto Networks, Adobe, and T-Mobile.<\/p>\n

Grinberg said he sees Cognition, the maker of the Devin coding agent, as his biggest competitor. Cognition raised another $2 billion at a $48 billion valuation earlier this month<\/a>, and counts Mercedes-Benz, NASA, Goldman Sachs, and Citi as customers.<\/p>\n

Grinberg said on X that Degnan had earlier acknowledged having a \u201ccasual\u201d conversation with a Cognition executive but had assured Grinberg that he had no interest in working for the competitor. According to Grinberg, Degnan said he had \u201cmade too much money\u201d and was \u201ctoo lazy to go work for Cognition,\u201d which Grinberg said he \u201ctrusted and believed.\u201d <\/p>\n

On Monday, however, Degnan apparently disclosed that he had actually been in ongoing talks with Cognition.<\/p>\n

This caused Grinberg to grow concerned about how much confidential information Degnan had about Factory, and how much he had shared and might share in the future with his new employer. He says he fired Degnan as a board adviser on Tuesday, writing:<\/p>\n

For weeks, while he sat in our board meetings and advised our leadership team, he was also confiding with executives of our largest competitor. Chris was subject to confidentiality obligations in connection with his work with Factory. We do not know the extent of the information he shared, but it puts his timely questions about our product roadmap and what the parity gap involves into a new light.<\/p>\n

But Degnan disputes that account as well. He says the last Factory board meeting he attended was weeks before he had \u201cever spoken\u201d to Cognition and that he hasn\u2019t shared confidential information. Degnan also says that when he told Grinberg that he was resigning to take the role at Cognition, Grinberg offered him a full-time job at Factory, which he declined.<\/p>\n

Really disappointed to see this. Here are the facts:<\/p>\n

-You did not terminate me. I resigned from my advisor position on Monday and told you I was going to Cognition. In response, you asked me to consider a full time role at Factory. I told you I wasn\u2019t interested. <\/p>\n

-You claim\u2026<\/p>\n

\u2014 Chris Degnan (@cwdegnan) September 30, 2026<\/a><\/p>\n

Degnan\u2019s post announcing<\/a> his new job at Cognition doesn\u2019t mention Factory. Very notably, it does say that RPT Partners and the firm\u2019s managing partner, Chad Peets, will now be working with Cognition. \u201cI am thrilled that Chad and the RPT team will be working closely with me in our pursuit of building a generational company,\u201d Degnan wrote.<\/p>\n

In the old, pre-AI world, a VC firm was especially cautious not to engage in conflict-of-interest business. In today\u2019s world, many a VC has invested in direct AI competitors<\/a>, such OpenAI and Anthropic.<\/p>\n

In fact, Khosla Ventures is an investor in both Cognition (since at least early 2025) and Factory. <\/p>\n

That didn\u2019t stop the venture firm\u2019s founder, Vinod Khosla, from jumping into the drama, seemingly in defense of his bigger portfolio company Cognition. Nor did it stop Khosla Ventures partner Keith Rabois from weighing in as well \u2014 in defense of Factory.<\/p>\n

In a post on X<\/a>, Khosla accused Grinberg of lying about firing Degnan. He called Factory a \u201cstruggling second tier competitor\u201d and said Grinberg showed \u201cno decency or sense of proper behavior,\u201d which \u201cshows your desperation.\u201d<\/p>\n

Grinberg replied that he has email receipts to verify his version of events but did not share them.<\/p>\n

You are a struggling second tier competitor that is more unethical and lying just because you have no decency or sense of proper behavior and shows your desperation. Straight out lying about if Chris being fired I thought would be below even you. https:\/\/t.co\/5pyZlYcry8<\/a><\/p>\n

\u2014 Vinod Khosla (@vkhosla) September 30, 2026<\/a><\/p>\n

Meanwhile, Rabois opined on X<\/a>, \u201cIt is unethical per se to even interview at a competitor while attending Board meetings and Board dinners.\u201d He added<\/a> that \u201cto even sit for an interview while having access to board level information and without resigning is absolutely insane.\u201d<\/p>\n

Tracking the back-and-forth, Cognition co-founder and CEO Scott Wu also weighed in on the controversy on X<\/a>. He politely expressed respect for the smaller competitor while insisting that his company has \u201cno interest in Factory\u2019s info.\u201d Wu also contends that Degnan resigned on Monday but didn\u2019t refute that Degnan was in talks with Cognition before that happened.<\/p>\n

Either way, there could be consequences for perceived board-level conflicts of interest. VC giant Andreessen Horowitz is reportedly<\/a> the subject of a Justice Department probe into its partners serving on competitors\u2019 boards.<\/p>\n

Grinberg argued that startup founders must be able to rely on their board members. \u201cChris\u2019s conduct is unacceptable to me. Trust in Board Membership is one of the sacred bonds in the Silicon Valley, one that helps the startup ecosystem thrive. With it comes an enormous responsibility. That trust was violated.\u201d<\/p>\n

Degnan, Peets, Factory, and Khosla Ventures did not immediately respond to requests for further comment.<\/p>\n

Note: This story was updated to include responses from Degnan, Khosla, Rabois, and Wu.<\/p>\n

When you purchase through links in our articles, we may earn a small commission<\/a>. This doesn\u2019t affect our editorial independence.<\/p>\n","protected":false},"excerpt":{"rendered":"Matan Grinberg, co-founder and CEO of the AI coding startup Factory, said in a post on X on…\n","protected":false},"author":2,"featured_media":788223,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[84,2350,4203,28285,56,54,55],"class_list":["post-788222","post","type-post","status-publish","format-standard","has-post-thumbnail","category-entrepreneurship","tag-business","tag-cognition","tag-entrepreneurship","tag-factory","tag-uk","tag-united-kingdom","tag-unitedkingdom"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/788222","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=788222"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/788222\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/788223"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=788222"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=788222"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=788222"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}