Behind Factory Founder’s Spat With Cognition Over Key Hire

Julia Hornstein (Dealmaker): Public feud after Cognition hired Chris Degnan (ex-Snowflake CRO; advised Factory ~1 year via RPT Partners, also a Factory investor/board observer). Factory CEO Matan Grinberg posted that Factory terminated Degnan for discussing a Cognition role while privy to board-level info; Degnan said he resigned Monday after notifying Factory, denied sharing confidential info; Cognition CEO Scott Wu and CLO Paul Grewal rejected the claims—hired Degnan as a top sales leader; Chad Peets (RPT partner) joining him. Context: AI talent war spilling from researchers into GTM/sales. Cognition ~$900M annualized revenue but could burn ~$800M this year on leased Nvidia cluster; also hired Alex Stamos (ex-Facebook CSO) for cybersecurity. Factory (AI coding agent Droid) valued at $5B two weeks ago (3× vs five months); ~$420M raised (Sequoia, Lux, Insight). Investor split: Menlo’s Matt Murphy stressed board-observer duty; Khosla Ventures invested in Cognition—Vinod Khosla attacked Grinberg on X—while KV’s Keith Rabois (Factory board; led Factory’US$110M Series C in April) said interviewing at a competitor while attending board meetings/dinners is “unethical per se.” Factory unlikely to pursue further action; raises questions about RPT Partners’ status.