Factory's CEO accuses an advisor turned Cognition executive of sharing confidential information

At some point before this week, according to Grinberg, a Factory advisor asked about the product roadmap and about what the "parity gap" involves. Grinberg now wants those questions read against everything that followed. "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," Grinberg wrote ^[10].

On timing, the two accounts cannot both be right. Degnan says the last Factory board meeting he attended was weeks before he had "ever spoken" to Cognition, and that he has not shared confidential information ^[11]. Grinberg says he has emails that verify his version. He has not released them ^[16]. Degnan adds that Grinberg offered him a full-time job at Factory when he resigned, and that he turned it down ^[12].

The comfortable assumption about an investor-side advisor is that his incentives sit on your cap table. This one had been a partner at RPT Partners, a Factory investor, for five months, after 11 years as Snowflake's revenue chief ^[4]. Between the "casual" conversation Degnan acknowledged with a Cognition executive and the Monday disclosure of ongoing talks, as Grinberg tells it, Factory's safeguard was Degnan's word ^[8][9]. Grinberg said Degnan told him he had "made too much money" and was "too lazy to go work for Cognition," and that he "trusted and believed" it ^[8].

Vinod Khosla, whose firm backs both companies, accused Grinberg of lying about the firing and called Factory a "struggling second tier competitor" ^[15]. On valuation, Cognition's $48 billion is 9.6 times Factory's $5 billion, both set in rounds this month ^[6][7][1].

The test I would apply to any advisor seat has two axes. One is access: whether the person sees roadmap-level material such as board decks or the gap analysis against the leading rival. The other is ties: whether the person, or the firm they work for, has a live connection to that rival, through a shared fund or a conversation that has gone past casual. An advisor with low access and no tie is ordinary. Give one with high access and no tie a written duty to report any rival conversation the day it starts. Low access with a tie is fine for sales and hiring advice.

High access with a tie is where Grinberg says Factory sat for weeks ^[10], and I would take that seat out of roadmap sessions. That has a cost. A former Snowflake revenue chief is valuable because he sees the real numbers and the real gap, and removing that view removes most of what he was there to give. I think the cost is worth paying once one fund holds stakes in both a company and its main rival. Keith Rabois, a partner at Khosla Ventures, would draw the line earlier still. "It is unethical per se to even interview at a competitor while attending Board meetings and Board dinners," Rabois wrote ^[17].