Factory CEO just accused his VC board advisor of spying for Cognition

Matan Grinberg, CEO of agentic coding startup Factory, said on X that he removed Chris Degnan from his position as a board advisor after concluding Degnan had shared confidential information with Factory’s largest rival, Cognition. According to Grinberg, Degnan attended board meetings and advised Factory’s leadership while also allegedly confiding with executives at Cognition, prompting concerns over what Factory information might have been disclosed. Two hours after Grinberg’s public statement, Degnan posted on X and LinkedIn that he had joined Cognition as chief revenue officer. Degnan’s background includes being Snowflake’s first sales hire and serving 11 years as that company’s chief revenue officer. He had been a partner at RPT Partners for the prior five months and is listed on LinkedIn as a go-to-market advisor for Iconiq since October. Factory, which is about three years old and based in San Francisco, develops AI agents that can perform programming tasks autonomously. The company announced a $200 million financing this month that placed its valuation at $5 billion, with investors including Blackstone, Khosla Ventures, Sequoia Capital, and Insight Partners. Factory counts organizations such as Nvidia, Blackstone, Royal Bank of Canada, Palo Alto Networks, Adobe, and T-Mobile among its customers. Grinberg described Cognition, maker of the Devin coding agent, as Factory’s biggest competitor; Cognition recently raised another $2 billion at a $48 billion valuation and lists Mercedes-Benz, NASA, Goldman Sachs, and Citi as customers. Grinberg said Degnan had earlier characterized a conversation with a Cognition executive as “casual” and had told him he had no interest in joining Cognition, but that more recent disclosures revealed ongoing talks that led to Grinberg’s decision to fire Degnan from the board. Degnan’s announcement also said RPT Ventures and its managing partner, Chad Peets, will be working with Cognition. Neither Degnan, Peets, nor Factory provided further comment in response to requests. The episode touches on broader governance concerns as venture capitalists and their partners increasingly take active roles across competing AI businesses, a dynamic that has drawn scrutiny in other cases as well.