CRO Move to Rival Exposes Board Advisor Conflicts

The departure of a chief revenue officer to a direct competitor, and the public dispute that followed, has sharpened the risk for startups that rely on board advisors who also hold executive roles at rival firms.

The event started on September 30 when Factory CEO Matan Grinberg posted that he had fired Chris Degnan as a board advisor, alleging he shared confidential information with Cognition, an AI coding startup. Hours later, Degnan announced he had joined Cognition as CRO. Degnan, a former Snowflake CRO who had advised Factory for about a year, said he resigned and never shared anything. Cognition also rejected the claims.

The episode was dissected on the 20VC x SaaStr podcast with Harry Stebbings, Jason Lemkin, Rory O’Driscoll, and Dev Ittycheria, who returned as MongoDB CEO the week before after CJ Desai stepped down.

Ittycheria, who disclosed he is an angel investor in Factory and that MongoDB partners with Cognition, said the risk depends on the advisor’s access. “Someone who vets a hire in Europe is a light relationship, and moving on is fine. Someone inside the tent on product plans, board plans, and financials is different.” A CRO who recruits people on the vision and then jumps to a direct competitor, he added, “burns that reputation with all of them.”

Lemkin offered a different read: “95% of CROs would say this is how they found their last job.” He noted Degnan was an advisor and board observer, not an employee or director, and that many CROs treat competition as a game and are friends with their counterparts at rivals. More time between the two roles would have helped.

O’Driscoll said the failure was an implied understanding nobody made explicit. Telling Grinberg up front about Cognition’s approach would have fixed it. Stebbings disagreed: an employee sees a silo, while a board observer sees strategy across every function.

The dispute widened when Khosla Ventures, an investor in both companies, became involved. Keith Rabois led Factory’s $110 million Series C and sits on its board. Vinod Khosla sided with Degnan, accused Grinberg of lying, and called Factory a “struggling second tier competitor.” Rabois publicly defended Factory.

Ittycheria said he was “totally flummoxed by that tweet. It basically handed every other firm a weapon when they’re competing on deals: is this the partner you want when things go bad?”

O’Driscoll called it a mistake Vinod will probably regret. “It was not venture’s finest hour.” He recalled a rule about praising in public and chastising in private.

Lemkin offered the theory that it was meant as tough love for a struggling founder. Nobody on the call bought it.

The risk for startups is that such conflicts can erode trust among investors, employees, and customers. Clear agreements on confidentiality and non-compete for advisors would reduce the risk. Explicit communication between advisor and founder when approached by a competitor would also help.

What would make it worse: further public disputes, legal action, or a pattern of similar departures. Ittycheria, who dealt with his own CRO departure to Meta a week earlier, said he asks departing executives one question: did it have to be a direct competitor.