AI coding startup Factory accuses ex-board advisor of leaking secrets to Cognition

Matan Grinberg, co-founder and CEO of AI coding startup Factory, said on X on September 30, 2026 that he had removed venture investor Chris Degnan from his role as a board advisor, accusing Degnan of sharing confidential information with Cognition, which Grinberg described as Factory's biggest competitor.

Grinberg said Degnan had earlier admitted to a "casual" conversation with a Cognition executive and assured him he had no interest in working for the competitor, even saying he was "too lazy" to join Cognition. However, Degnan was later revealed to have been in ongoing talks with Cognition, raising concerns at Factory about how much confidential information he held and might share with his new employer. Grinberg said he fired Degnan from the board on September 29.

Two hours after Grinberg's post, Degnan announced on X and LinkedIn that he had joined Cognition as chief revenue officer. He disputed Grinberg's account, saying he was not fired but resigned after telling Grinberg he was taking the job. Degnan also denied sharing confidential information, noting that the last Factory board meeting he attended took place weeks before he first spoke with Cognition.

Degnan was Snowflake's first sales hire and spent 11 years as the data company's chief revenue officer. He spent the past five months as a partner at RPT Partners, a Factory investor. In his post announcing the new role, Degnan said RPT Ventures and its managing partner Chad Peets would work closely with Cognition.

Factory, a three-year-old San Francisco-based agentic coding company whose AI agents can carry out programming tasks largely on their own, raised $200 million this month at a $5 billion valuation from investors including Blackstone, Khosla Ventures, Sequoia Capital and Insight Partners. Cognition, maker of the Devin coding agent, raised $2 billion at a $48 billion valuation earlier in September.

The dispute drew responses from investors. Khosla Ventures backs both Cognition and Factory. Founder Vinod Khosla accused Grinberg of lying about firing Degnan, calling Factory a "struggling second tier competitor." Khosla partner Keith Rabois said it was unethical to interview at a competitor while attending board meetings. Grinberg responded that he has email receipts to verify his version of events but did not share them.