A public dispute has erupted between Factory, an agentic coding startup, and its departing board advisor, with the company's CEO accusing him of sharing confidential information with a chief competitor.
The Accusation
Matan Grinberg, co-founder and CEO of Factory, said in a post on X on Wednesday that he fired venture capitalist Chris Degnan from his role as a board advisor. Grinberg alleges that Degnan shared confidential information with Factory's biggest competitor, Cognition.
Two hours later, Degnan announced on both X and LinkedIn that he had joined Cognition as its chief revenue officer—and refuted Grinberg's allegations. Degnan's account is that he was not fired, but resigned when he informed Grinberg he was taking the job, he posted on X.
Who Is Chris Degnan?
Degnan was Snowflake's first sales hire and later spent 11 years as the data company's chief revenue officer. Over the past five months, he has served as a partner with RPT Partners, a Newport Beach, California-based investor in Factory. Degnan is also a go-to-market advisor to startups for the much larger venture firm Iconiq, a role that dates back to October of last year.
Factory's Position in the Market
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 this month from Blackstone, Khosla Ventures, Sequoia Capital, Insight Partners and others. Its customers include Nvidia, Blackstone, Royal Bank of Canada, Palo Alto Networks, Adobe, and T-Mobile.
Grinberg said he sees Cognition, maker of the Devin coding agent, as his biggest competitor. Cognition raised another $2 billion at a $48 billion valuation earlier this month, and counts Mercedes-Benz, NASA, Goldman Sachs, and Citi as customers.
Timeline of Events
Grinberg said on X that Degnan had earlier admitted to having a "casual" 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 "made too much money" and was "too lazy to go work for Cognition," which Grinberg said he "trusted and believed." On Monday, however, Degnan apparently disclosed that he had actually been in ongoing talks with Cognition.
This caused Grinberg to grow concerned over 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 from the board on Tuesday, writing:
"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."
Degnan's Rebuttal
Degnan disputes this account as well. He says the last Factory board meeting he attended was weeks before he had ever spoken to Cognition. Degnan contends that when he notified Grinberg that he was resigning to take the role at Cognition, Grinberg offered him a full-time role at Factory, which he declined.
In a post on X, Degnan wrote: "Really disappointed to see this. Here are the facts: —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't interested."
The exchange—playing out publicly on X—highlights the intensifying competition in the AI coding market, where valuations and talent moves have become increasingly high-stakes.