Factory CEO just accused his VC board adviser of spying for Cognition

Key Points:

• Factory CEO Matan Grinberg fired board adviser and VC Chris Degnan, accusing him of sharing confidential information with Factory’s rival, Cognition, shortly before Degnan announced he was joining Cognition as chief revenue officer.
• Degnan denied being fired, stating he resigned after informing Grinberg of his new role, and claimed he did not share confidential information or attend board meetings while in talks with Cognition.
• The dispute highlights potential conflicts of interest involving venture capital firms, as Khosla Ventures invests in both Factory and Cognition, with key figures publicly taking sides in the controversy.
• Industry leaders weighed in on the ethics of Degnan’s actions, with some condemning interviewing with a competitor while serving on a board, while Cognition’s CEO emphasized respect for Factory and denied interest in its confidential data.
• The incident raises broader concerns about board-level conflicts of interest in Silicon Valley, amid ongoing scrutiny of VC firms like Andreessen Horowitz for similar issues.