Factory CEO fires board advisor over alleged ties to rival Cognition

Degnan, formerly the chief revenue officer at Snowflake, joined Cognition in the same role just hours after the termination. Grinberg claims that Degnan had previously dismissed rumors of a move to the rival firm, citing a lack of professional ambition and sufficient personal wealth. The situation soured on Monday when Degnan disclosed ongoing talks with Cognition, sparking immediate concerns at the San Francisco-based startup regarding the security of its product roadmap and sensitive trade secrets.

Factory, which recently secured a $5 billion valuation, views the incident as a fundamental breach of fiduciary duty. Grinberg noted that Degnan’s past inquiries into the company’s development parity now appear in a different light. While the venture capital industry has become increasingly comfortable with firms holding stakes in competing AI projects, this specific crossover has drawn intense scrutiny. With regulatory bodies like the Justice Department already probing board-level conflicts of interest, the episode highlights the fragility of the trust required to sustain Silicon Valley’s ecosystem.