Factory AI's chief executive is accusing a former board adviser of feeding confidential information to a rival startup.
Chris Degnan, a venture capitalist who served as a board adviser to Factory AI, left that post to become chief revenue officer at Cognition, a competing AI coding startup. Factory's CEO publicly accused Degnan of effectively spying for Cognition while he sat on Factory's board. The claim surfaced on X, where it quickly turned into a public argument among founders, investors, and bystanders. Neither side has produced documents or evidence beyond the dueling posts.
Board advisers sit inside sensitive planning conversations - roadmaps, pricing, hiring - specifically because investors are supposed to be neutral stewards, not a pipeline to the competition. A VC taking an operating job at a rival he recently advised tests that assumption and raises an uncomfortable question for any founder who has put an investor on their cap table: who else has a front-row seat to your strategy.
Public X spats make for good screenshots, but they are not a substitute for a lawsuit - so far, nobody involved has shown they have one.