Factory's CEO says a board observer leaked to Cognition before becoming its revenue chief

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].