Brex Lays Off 62 Employees(thesfnews.com)
thesfnews.com
Brex Lays Off 62 Employees
https://www.thesfnews.com/local-startup-brex-lays-off-62-employees/56172
61 comments
Is the zero fraud liability policy normal in business banking? AFAIK it's a consumer thing.
I'm not an expert in this, but I imagine a clause such as this is pretty standard in banking. The reason being that it waives _the company_ of fraud liability. Consumer banking offers protections, but the company is not held liable for the fraud.
For example, imagine that American Express be held liable because your card was stolen. That doesn't make much sense, thus they want to protect themselves against those claims.
For example, imagine that American Express be held liable because your card was stolen. That doesn't make much sense, thus they want to protect themselves against those claims.
> It's like a bank, but without the safety and security.
Like Paypal.
Like Paypal.
PayPal has a very customer friendly dispute process, and what's wrong with their security?
"Customer friendly", yes. "Correct" or "Fair" to merchants? Maybe not.
> PayPal has a very customer friendly dispute process,
Ha ha ha.
> and what's wrong with their security?
Paypal balances are not FDIC insured. They're vaguely moving in this direction (it's in "beta"). But they've been in operating without FDIC-insured deposits for the last 20+ years.
Ha ha ha.
> and what's wrong with their security?
Paypal balances are not FDIC insured. They're vaguely moving in this direction (it's in "beta"). But they've been in operating without FDIC-insured deposits for the last 20+ years.
I agree
[deleted]
Regulations. They're good for you.
So is discretion. Nobody ever held a gun to my head telling me to deal with Brex.
I was surprised that they used the Brex name!
Bre-X was also the name of a Canadian mining company that pulled off a massive fraud in the 1990's.[1] Probably one of the biggest frauds in Canadian history.
[1]https://en.wikipedia.org/wiki/Bre-X
Bre-X was also the name of a Canadian mining company that pulled off a massive fraud in the 1990's.[1] Probably one of the biggest frauds in Canadian history.
[1]https://en.wikipedia.org/wiki/Bre-X
Thought it made perfect sense. American Express = Amex. Brazilian Express = Brex. Short, sweet.
They must have seen the movie and went digging for gold https://en.wikipedia.org/wiki/Gold_(2016_film)
I remember that. One of my clients investors pulled funding and they laid off 50% of their work force and didn't pay my last invoice.
I know someone who almost jumped ship from there. This person described it very much like Uber’s early days going after Lyft. Hiring as quickly as possible to reach a goal of something. Like to be the credit card for businesses. It’s crazy how this person described how fast they hire without considering logistics (real estate, equipment, etc.).
I just got a recruiter email today from them, yesterday.
They are claiming that they are growing their engineering team.
They are claiming that they are growing their engineering team.
They seem to get quite popular, also reaching out to folks i know to hire recently.
I was always confused by the name... who thinks Brex is a good choice? I mean Brexit was already a big thing in 2017.
I was always confused by the name... who thinks Brex is a good choice? I mean Brexit was already a big thing in 2017.
It's not really a bank.
They give you 15% of your cash balance as credit and sweep the payment out of your account at the end of the period (which the sales guys conveniently forget to tell you. No shit the guy said, after being prodded about maybe getting a reference since they were not being 100% truthful about terms while we signed up "well AirBnb didn't ask, we don't feel a big obligation to say more"). I mean it's fine, but "hey we autopull money out of your bank account" should maybe come up.
So kinda cool company but definitely not straight forward.
Had another sales guy there after we signed up lie about a different product offering. Know a fair bit about the FDIC and kept asking questions and just got foggy and untrue answers.
Slimy.
Wish we didn't sign up.
Edit: they lied about the process around our AWS credit as well. We ended up getting it, but it was nothing like the described. Could have done the same thing with Silicon Valley Bank. This was the most annoying because it was what pushed us past the zone of indifference towards their service, I asked a handful of times for details for how it worked, and they guy definitely told me white lies to get a sign up.
They give you 15% of your cash balance as credit and sweep the payment out of your account at the end of the period (which the sales guys conveniently forget to tell you. No shit the guy said, after being prodded about maybe getting a reference since they were not being 100% truthful about terms while we signed up "well AirBnb didn't ask, we don't feel a big obligation to say more"). I mean it's fine, but "hey we autopull money out of your bank account" should maybe come up.
So kinda cool company but definitely not straight forward.
Had another sales guy there after we signed up lie about a different product offering. Know a fair bit about the FDIC and kept asking questions and just got foggy and untrue answers.
Slimy.
Wish we didn't sign up.
Edit: they lied about the process around our AWS credit as well. We ended up getting it, but it was nothing like the described. Could have done the same thing with Silicon Valley Bank. This was the most annoying because it was what pushed us past the zone of indifference towards their service, I asked a handful of times for details for how it worked, and they guy definitely told me white lies to get a sign up.
Would love to learn some more about your experience. We use Brex, and this makes me nervous.
Maybe it was just bad luck. Who knows. 99% satisfaction there still is a chance for a bad experience.
We signed up during quarantine, if that helps. Not to make excuses for them but maybe the sales team was feeling the pressure of what ended up being a round of layoffs. But this is just speculation.
We signed up during quarantine, if that helps. Not to make excuses for them but maybe the sales team was feeling the pressure of what ended up being a round of layoffs. But this is just speculation.
> They give you 15% of your cash balance as credit and sweep the payment out of your account at the end of the period
What does this mean, specifically?
What does this mean, specifically?
From what I understand:
You have $100
You get $15 in credit
You then spent $7 that month
Brex takes $7 from your bank account to pay itself
You have $93 at the end of the month
Your credit line is now ~$14
So it's not too dissimilar from a credit card card, but it's also basically a prepaid debit card and they go out of their way to hide that.
You have $100
You get $15 in credit
You then spent $7 that month
Brex takes $7 from your bank account to pay itself
You have $93 at the end of the month
Your credit line is now ~$14
So it's not too dissimilar from a credit card card, but it's also basically a prepaid debit card and they go out of their way to hide that.
[deleted]
"Hey, should I put this on my personal card?"
"No, just Brex-it!"
I see what you did there. Well played.
EDIT: Here we go again, lack of sense of humour including puns on HN as well as the pun-ished 'B' word.
EDIT: Here we go again, lack of sense of humour including puns on HN as well as the pun-ished 'B' word.
no idea why this company exists. contrary to those talking about personal guarantees, any bank will be happy to give you a charge card (what brex is), that draws directly from your deposit account.
ISTM brex is a co-marketing exercise with xero.
OTOH if you have a charge card from your bank, you don't need the API integration as transactions post directly.
most importantly, you have to trade off your corporate privacy! they require access to your bank account, purportedly so they can verify your sole use of brex and not any other cards. but come on, obviously they are doing some data mining.
ISTM brex is a co-marketing exercise with xero.
OTOH if you have a charge card from your bank, you don't need the API integration as transactions post directly.
most importantly, you have to trade off your corporate privacy! they require access to your bank account, purportedly so they can verify your sole use of brex and not any other cards. but come on, obviously they are doing some data mining.
Just transferred my Brex points away to an airline partner.
After using Brex for a year I don’t see the point. It has nice benefits for tech startups, but these are easily obtainable elsewhere. I get much better benefits and service from Amex.
After using Brex for a year I don’t see the point. It has nice benefits for tech startups, but these are easily obtainable elsewhere. I get much better benefits and service from Amex.
amex won't give most startups a credit line that is free of personal guarantees. that's the point.
This is a short term, no guarantor loans business. This is exactly the same predatory model as payday loans, subprime debt, ... I don’t understand how they raised so much money.
I don’t understand how they raised so much money.
Because “disrupting” is the Silly Valley code word for “ignoring regulations”. And all VCs know it.
Having said that:
They will provide the employees with two months’ worth of severance pay, keeping those affected on the company’s health insurance for the rest of the year, dedicating a recruitment team to find those affected new job opportunities, and allowing the employees to keep any company equipment such as computers.
Many firms would not have done that, so credit (no pun intended) where it’s due.
Because “disrupting” is the Silly Valley code word for “ignoring regulations”. And all VCs know it.
Having said that:
They will provide the employees with two months’ worth of severance pay, keeping those affected on the company’s health insurance for the rest of the year, dedicating a recruitment team to find those affected new job opportunities, and allowing the employees to keep any company equipment such as computers.
Many firms would not have done that, so credit (no pun intended) where it’s due.
60 days severance is mandatory, due to the WARN act.
I don't know if "keeping those affected on the company’s health insurance for the rest of the year" means they will pay the full amount, or just the corporate contribution.
So, eh.
I don't know if "keeping those affected on the company’s health insurance for the rest of the year" means they will pay the full amount, or just the corporate contribution.
So, eh.
60 days severance is mandatory, due to the WARN act.
Interesting. Here in the UK the statutory minimum is something like 1 weeks pay per year of service, where a week is capped at around £400. It's ludicrous, but it's what companies like IBM pay when laying off workers. It's strange to see a situation where American workers have more protections than workers, well, anywhere else!
Interesting. Here in the UK the statutory minimum is something like 1 weeks pay per year of service, where a week is capped at around £400. It's ludicrous, but it's what companies like IBM pay when laying off workers. It's strange to see a situation where American workers have more protections than workers, well, anywhere else!
Basically in the US companies with 100 or more employees have to give 60 days notice before doing a mass layoff. If they don't give the notice, they can give equivalent severance instead.
UK has notice AND consultation requirements.
https://www.gov.uk/staff-redundant/redundancy-consultations
UK has notice AND consultation requirements.
https://www.gov.uk/staff-redundant/redundancy-consultations
The reason you don't understand how we raised so much money is because you don't understand how the business works apparently.
Unless you're saying all credit card companies are the same as predatory payday loans or subprime loans, Brex is no different.
Brex is required to do underwriting to determine the amount of credit that can be provided to a company. Underwriting has legal thresholds that must be met. Brex is required to have AML processes in place.
And unlike most corporate cards, there is no personal guarantee owned by the founders. And since we have a fairly high threshold to qualify, it hedges risks for both parties. It's not like Brex is handing out 50k in credit to a 10 person startup with no VC.
payday loans and subprime debt targets people that cannot afford to pay what they take out. I am not sure how you think that is even remotely close to what Brex, Amex, SVB, or anyone in the space is doing. Brex isn't entirely unique, but it's also not predatory.
And, if you take some time to learn the industry, you can see that there are plenty of areas that are legacy that are due to be rebuilt and re-examined. Whether we at Brex will be the ones to properly innovate in that area remains to be seen, but I am pretty confident we are at least moving in the right direction.
Disclaimer, I work at Brex.
Unless you're saying all credit card companies are the same as predatory payday loans or subprime loans, Brex is no different.
Brex is required to do underwriting to determine the amount of credit that can be provided to a company. Underwriting has legal thresholds that must be met. Brex is required to have AML processes in place.
And unlike most corporate cards, there is no personal guarantee owned by the founders. And since we have a fairly high threshold to qualify, it hedges risks for both parties. It's not like Brex is handing out 50k in credit to a 10 person startup with no VC.
payday loans and subprime debt targets people that cannot afford to pay what they take out. I am not sure how you think that is even remotely close to what Brex, Amex, SVB, or anyone in the space is doing. Brex isn't entirely unique, but it's also not predatory.
And, if you take some time to learn the industry, you can see that there are plenty of areas that are legacy that are due to be rebuilt and re-examined. Whether we at Brex will be the ones to properly innovate in that area remains to be seen, but I am pretty confident we are at least moving in the right direction.
Disclaimer, I work at Brex.
Overhyped company
So many people.So little product.
Serious question, why does Brex even need to exist?
From what I understand, if you need credit as a founder, regular banks will want a personal guarantee, REGARDLESS of how much money you raised. I.e. the bank does not care about your company state.
Brex on the other hand looks at your company state.
Brex on the other hand looks at your company state.
This is my understanding as well, but what I don't yet understand is why this would apparently work well for Brex but not for the banks. Part of me has wondered whether it's some kind of VC-subsidized strategy to make a risk play that doesn't pan out actuarially, sort of like what Uber does with fares. Can anyone explain this?
Brex minimizes their risk by offering a charge card versus a revolving line of credit. They also require access to your corporate bank account for liquid assets information to dynamically extend credit. This allows them to have a more nimble, forward looking-ish risk model rather than legacy institutions that rely primarily on credit histories.
This allows Brex to capture card transaction fees from financial services other banks ignore (again, due to risk models), such as startup charge cards.
This allows Brex to capture card transaction fees from financial services other banks ignore (again, due to risk models), such as startup charge cards.
> Brex minimizes their risk by offering a charge card versus a revolving line of credit. They also require access to your corporate bank account for liquid assets information to dynamically extend credit.
For how many businesses is "a charge card for 15% of your cash balance and you're responsible for fraud" substantively different from just using a debit card? (Genuine question -- this isn't a market I realized even exists.)
For how many businesses is "a charge card for 15% of your cash balance and you're responsible for fraud" substantively different from just using a debit card? (Genuine question -- this isn't a market I realized even exists.)
30-60 day float plus cash back rebates (1-7 points per dollar depending on spend category). Whether that provides you value is up to your business requirements and cash flow constraints. If you can’t get working capital otherwise (venture backed pre revenue), it’s probably not a bad deal.
I’d probably still go with Amex corporate cards and a personal guarantee, based on personal preference, a deep credit file, and a desire to outsource spend exception handling to the bank.
I’d probably still go with Amex corporate cards and a personal guarantee, based on personal preference, a deep credit file, and a desire to outsource spend exception handling to the bank.
SVB, a popular bank for startups, started offering a card with no personal liability https://www.svb.com/business-banking/business-credit-card/sv... and Stripe’s card also has no personal liability https://stripe.com/corporate-card?utm_campaign=paid_brand-US...
I think the reason large banks haven’t offered this yet is they’re not very catered to startups, which might have a large balance but no credit history (either as a business, or because the founders are young or foreign).
(My company somewhat competes with Brex cash but doesn’t offer a charge card or credit card product)
I think the reason large banks haven’t offered this yet is they’re not very catered to startups, which might have a large balance but no credit history (either as a business, or because the founders are young or foreign).
(My company somewhat competes with Brex cash but doesn’t offer a charge card or credit card product)
[deleted]
I'm a co-founder of a 15-person startup. We switched our banking and credit cards from Chase to Brex about a year ago and it's just lot better - UX, fees, data, perks, etc.
I think what the parent is suggesting is, Brex seems to have practically no moat. If one day, say, Amex, which is already a huge issuer of business credit / charge cards, decides to eat Brex's dinner, can Brex survive?
For us, the consumers, do we care? If AMEX was gonna do this, they would have done it by now. If they buy/eat Brex, we still benefit from expanded financial instruments.
Amex actually did launch a startup targeted charge card that doesn’t require a personal guarantee, presumably to compete with Brex.
Brex’s gameplan though seems to be a full set of financial products targeted at startups that integrate well together, like per-employee charge cards, cash accounts, and revolving lines of credit. In that sense, they would start to look more like a streamlined and modernized (but riskier) SVB.
Brex’s gameplan though seems to be a full set of financial products targeted at startups that integrate well together, like per-employee charge cards, cash accounts, and revolving lines of credit. In that sense, they would start to look more like a streamlined and modernized (but riskier) SVB.
Similar questions:
Why is it that much better than a normal business line of credit or credit card? Do they give loans easier than those, or let you pay in equity or something?
Do they have better integrations with corporate IT systems?
Why is it that much better than a normal business line of credit or credit card? Do they give loans easier than those, or let you pay in equity or something?
Do they have better integrations with corporate IT systems?
They give you a credit card you can use to spend your cash. Normally credit for businesses this size require a personal guarantee. They do not.
It goes against your personal credit score. So you can get one that's unsecured, but perhaps not if you've immigrated and/or have no track record.
I got rejected from their interview about 2 months ago despite killing (DS&A interview) it. Culturally seemed that I don't match with them.
I accepted an offer with one of the big tech companies instead.
Glad they rejected me.
I accepted an offer with one of the big tech companies instead.
Glad they rejected me.
You will be bound by any transaction (including any transfer, instruction, or payment order we receive related to the Services), even if it is not authorized, if the transaction is initiated under your Credentials or processed in accordance with your instructions.
We may help you resolve unauthorized transactions, but you acknowledge and understand that you are responsible for any financial loss caused by Administrators, Users, or other persons given access to the Services or your Brex Account, and any financial for loss due to compromised Credentials or due to any unauthorized use or modification of your Brex Account or the Services. Brex is not liable or responsible to you, and you waive any right to bring a claim against us, for any such losses.
We may suspend access to your Brex Account or the Services at any time and for any reason, in our sole and absolute discretion, without prior Notice.
Arbitration will be administered by JAMS...