Factory's CEO says a board observer leaked to Cognition before becoming its revenue chief
Factory CEO Matan Grinberg says board observer Chris Degnan passed confidential information to Cognition, the $48 billion rival that made him revenue chief. Degnan denies it, and the accounts published so far do not establish that anything changed hands.
The Engineer · Build desk

What happened
- Grinberg says he removed Degnan as Factory's board observer and adviser after learning Degnan had been in recurring discussions with Cognition.
- Cognition employees feigned interviews to obtain product information, Grinberg also alleges, though that claim has not been verified.
- Degnan spent 11 years as Snowflake's chief revenue officer before taking the Cognition job.
- Factory said in September it raised $200 million at a $5 billion valuation, with Khosla Ventures, Blackstone and Sequoia Capital among its investors.
Why it matters
- What doesn't add up contradiction Khosla Ventures' founder is attacking Grinberg while one of its partners condemns the overlap, so Factory cannot treat the investor it shares with Cognition as a neutral party in settling this.
- What it sets up precedent If Rabois's standard holds, keeping a board seat while interviewing with a rival is a breach in itself, and future disputes of this kind will turn on when an adviser disclosed the talks.
- Who has to decide decision Founders who take advisers from investors that also back rivals now have to decide when board access ends, since a confidentiality promise left Grinberg unable to say how much information went out.
Next story · Product · Sep 30
Factory's CEO accuses an advisor turned Cognition executive of sharing confidential informationConfirmed2 publishers
Run this as an incident review and it needs three timestamps: Degnan's first contact with Cognition, the day he told Factory the talks were formal, and the last confidential board material he saw. The public accounts, both posted on September 30 [14], fix only the end of that sequence. Degnan says he resigned on Monday and told Grinberg he was joining Cognition [15]. He announced the chief revenue officer job on Wednesday, according to mezha.net's summary of TechCrunch's reporting [4].
The disputed window sits before those dates. Grinberg says Degnan first described a conversation with a Cognition executive as casual, then disclosed that the talks were formal and recurring [25]. In mezha.net's Ukrainian rendering of his post, Grinberg wrote that for weeks Degnan sat in board meetings and advised Factory's leadership while sharing information with executives at its biggest competitor [5]. Degnan's answer covers one meeting. He says he did not attend a recent Factory board meeting while speaking with Cognition [16].
During those weeks, the control Factory had was a contract. Grinberg wrote that Degnan was bound by confidentiality obligations as part of his work with the company [13]. He also said he does not know how much Degnan passed on, or whether he could disclose more later [6]. His case for a leak rests on hindsight: Degnan's questions about the product roadmap, and about where Factory trailed its rival, now look different to him [7]. Cognition CEO Scott Wu said his company had no interest in Factory's information [17].
Whether Degnan was fired or quit matters mostly to Degnan and Grinberg. For other boards, the more useful exchange is the one between two people at Khosla Ventures, which has invested in both companies [10]. Partner Keith Rabois argued that interviewing with a direct competitor while attending board meetings and holding board-level information was unethical [8]. That test does not need a proven leak; the overlap itself is the breach. Vinod Khosla took the other side, calling Factory a "struggling second tier competitor" and accusing Grinberg of lying about firing Degnan [9].
Khosla's label has a basis in price. Cognition's valuation is 9.6 times Factory's [23]. The products are also close enough for a roadmap to matter. Factory sells Droid as a model-agnostic coding agent, on plans from $20 a month up to custom enterprise agreements [19]. Cognition sells Devin as an AI software engineer, and the two compete for access to the same codebases, engineering workflows and enterprise customers [20].
According to mezha.net, Degnan's post about the new job did not mention Factory. It said the RPT team and managing partner Chad Peets would work with Cognition [12]. Degnan, Peets and Factory did not respond to TechCrunch's requests for comment, mezha.net reported [22].
What to watch
- Whether Factory takes legal action or publishes records showing what board material Degnan received during his weeks of talks with Cognition.
- Whether Cognition answers Grinberg's allegation that its employees feigned interviews to gather Factory product information.
- Whether Khosla Ventures changes how its people hold observer or adviser seats at portfolio companies that compete with each other.
Clarity's read
What the record supports and how the coverage leans. The claims behind it follow.
Reality
- Evidence35
- Adoption
- Not scored
- Hype gap+30
- Incentives75
- Confidence55
Claim ledger
Ranked by verification strength, evidence, and original report placement.
- [1]
Factory co-founder and CEO Matan Grinberg accused former board observer Chris Degnan of sharing confidential information with Cognition.
- [2]
Degnan joined Cognition, Factory's coding-agent rival, as chief revenue officer.
- [3]
Cognition announced a Series E of more than $2 billion at a $48 billion valuation in September, led by Andreessen Horowitz and Accel.
- [4]
On Wednesday Degnan announced he would take the chief revenue officer post at Cognition.
- [5]
Grinberg wrote that for weeks Degnan took part in Factory board meetings and advised the leadership team while sharing information with executives of Factory's biggest competitor.
- [6]
Grinberg said he does not know how much information Degnan may have passed on or whether he could disclose it later.
- [7]
Grinberg said Degnan's persistent questions about Factory's product roadmap and the gap between Factory and its competitor now look different to him.
- [8]
Khosla Ventures partner Keith Rabois argued that interviewing with a direct competitor while attending board meetings and holding board-level information was unethical.
- [9]
Vinod Khosla called Factory a "struggling second tier competitor" and accused its CEO of lying about firing Degnan.
- [10]
Khosla Ventures has invested in both Factory and Cognition.
- [11]
Factory said in September it raised $200 million at a $5 billion valuation, with Khosla Ventures, Blackstone, Sequoia Capital and other investors participating.
- [12]
Degnan's post about his new job did not mention Factory but said the RPT team and managing partner Chad Peets would work with Cognition.
- [13]
Grinberg wrote that as part of his work with Factory, Degnan was required to comply with confidentiality obligations.
- [14]
The two accounts went public on September 30.
- [15]
Degnan denies sharing confidential information and says he resigned on Monday and told Grinberg he was joining Cognition.
- [16]
Degnan said he had not attended a recent Factory board meeting while speaking with Cognition.
- [17]
Cognition CEO Scott Wu said his company had no interest in Factory's information.
- [18]
The public record described so far does not establish that confidential information was passed to Cognition.
- [19]
Factory's Droid is positioned as a model-agnostic agent for software development, with public plans from $20 a month for individuals to custom enterprise agreements.
- [20]
Cognition sells Devin, which it describes as an AI software engineer; the products compete for access to codebases, engineering workflows and enterprise customers.
- [21]
Degnan previously worked at Snowflake, where he was chief revenue officer for 11 years.
- [22]
Degnan, Peets and Factory did not respond to requests for comment.
- [23]
Cognition's $48 billion valuation is 9.6 times Factory's $5 billion valuation.
- [24]
Grinberg said he ended Degnan's roles as Factory board observer and adviser after learning Degnan had been in recurring discussions with Cognition while advising Factory.
- [25]
Grinberg said Degnan first described a conversation with a Cognition executive as casual, then disclosed that the discussions were formal and recurring.
- [26]
Grinberg alleged that Cognition employees had feigned interviews to obtain product information; these are allegations, not verified findings.
Sources
2 independent publishers whose own reporting we read for this story.
- mezha.netСпівзасновник Factory усунув інвестора через звинувачення у передаванні даних конкуренту
1 article · September 30, 2026
- runtimewire.comFactory CEO accuses Cognition's new CRO of sharing confidential information
1 article · September 30, 2026
Topics and entities
Topics
- Startup board governance
- AI Coding Agents