Factory and Cognition clash publicly over adviser Chris Degnan's move to Cognition
What happened? On 30 September 2026, Factory co-founder and CEO Matan GrinbergDealroom has a profile for this one. Try Dealroom → posted on X that Factory had terminated Chris DegnanDealroom has a profile for this one. Try Dealroom →'s roles as board observer and adviser "for unethical conduct involving Cognition". Grinberg named Cognition, maker of the Devin coding agent, as Factory's largest competitor. He said Degnan had first described a conversation with a Cognition executive as casual and one-off, then on Monday 28 September, after advising Factory on confidential board-level matters that day, disclosed that the talks were formal and recurring. Grinberg also alleged that Cognition engineers had feigned job interviews with Factory to gather product information. Less than an hour after Grinberg's post, Degnan announced that he had joined Cognition as Chief Revenue Officer, adding that Chad PeetsDealroom has a profile for this one. Try Dealroom → and the team at RPT Partners, the Factory investor where Degnan is a partner, would work closely with him.
The other side: Degnan disputed the account. He said he resigned as an adviser on Monday and told Grinberg he was joining Cognition, that Grinberg then asked him to consider a full-time role at Factory, which he declined, and that the last Factory board meeting he attended was weeks before he first spoke to Cognition. Cognition co-founder and CEO Scott WuDealroom has a profile for this one. Try Dealroom → called the allegations "not true", said Cognition had "no interest in Factory's info" and would never ask staff to collect information on competitors, and noted that Degnan advises at least ten companies.
Investors take sides: Khosla Ventures backs both companies, having invested in Cognition and led Factory's previous round, and its people split. Founder Vinod Khosla accused Grinberg of lying about the firing and called Factory "a struggling second tier competitor"; Grinberg replied that he would rather not post "email receipts" but that Khosla's claim was "factually incorrect". Managing director Keith Rabois wrote that "it is unethical per se to even interview at a competitor while attending Board meetings and Board dinners." Later that evening Shaun MaguireDealroom has a profile for this one. Try Dealroom →, a partner at Factory investor Sequoia, posted: "What Cognition doesn't understand is that we're sitting on a nuclear weapon to end them. Hopefully we don't need to use it." He did not say what he was referring to.
Update, 1 October: Rabois kept up his defence of Factory, replying on X that Degnan "was not offered a CRO role or anything like that at Factory", which contradicts Degnan's account of being offered a full-time job, and that Grinberg "didn't lie". He added that, as a rule, Khosla Ventures takes a board seat in only one of two competing companies. Degnan, Wu and Factory have not commented further, and Grinberg, Degnan and Cognition did not respond to Business Insider's requests for comment. Maguire has not explained his post.
Why it matters: Both companies raised large rounds in September 2026: Factory $200M at US$3.24B valuation from investors including Khosla Ventures, Blackstone, Sequoia and Insight Partners, and Cognition $2B at US$31.1B valuation. In his post, Grinberg said Factory's team had grown tenfold and its revenue a hundredfold year on year. Degnan was Snowflake's first sales hire and later its CRO for 11 years. The dispute puts board-level conflicts of interest in focus at a time when many VCs back competing AI companies.
Read more: TechCrunch · Business Insider · Matan Grinberg on X · Keith Rabois on X · Chris Degnan on X · Scott Wu on X · Shaun Maguire on X
