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Capital One to acquire Brex for $5.15B

reuters.com

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Re: Capital One to acquire Brex for $5.15B

#21

Post by blindriver »

fairity wrote: post #7

Why are people saying this seems like a bad deal? If they really only raised $1.7b, per Crunchbase, then this seems to me like a very good outcome for everyone involved except its late stage investors. And, even for the late stage investors, they're breaking even.

No. The last two investment tranches will get back their money, based on 1X liquidation preference. Employees who joined in the last 5 years if they got options are fucked. If they have RSUs then they will take a fraction of their equity.

It sounds like investors got out okay, but employees got fucked big time. It's a terrible exit and Brex waited too long until their growth stalled.

Re: Capital One to acquire Brex for $5.15B

#22

Post by asdev »

Ramp valued at $32B is a joke. Hopefully this sets a realistic benchmark for valuation. All Ramp did was spend more on ads and marketing. And CEO is now claiming their "AI Agents" are going to do something meaningful.

Re: Capital One to acquire Brex for $5.15B

#23

Post by whalesalad »

Years ago I took a chance on hiring an engineer fresh out of a software bootcamp. Turned out to be one of the best engineers I have ever worked with - so much tenacity and thirst for learning new things. They went on to join Brex when the company was just starting out. What an awesome exit!

Re: Capital One to acquire Brex for $5.15B

#25

Post by SaltyBackendGuy »

whalesalad wrote: post #23

Years ago I took a chance on hiring an engineer fresh out of a software bootcamp. Turned out to be one of the best engineers I have ever worked with - so much tenacity and thirst for learning new things. They went on to join Brex when the company was just starting out. What an awesome exit!

Hopefully they had the confidence/insight to negotiate properly. I went through BN$ exit (was employee 19) early in my career and unfortunately, only select people at the top got retirement money. The most frustrating part was the Big Co. execs that came in much later, did literally nothing, and got a massive payday. Lesson learned though...

Re: Capital One to acquire Brex for $5.15B

#27

Post by Ancalagon »

blindriver wrote: post #21
fairity wrote: post #7

Why are people saying this seems like a bad deal? If they really only raised $1.7b, per Crunchbase, then this seems to me like a very good outcome for everyone involved except its late stage investors. And, even for the late stage investors, they're breaking even.

No. The last two investment tranches will get back their money, based on 1X liquidation preference. Employees who joined in the last 5 years if they got options are fucked. If they have RSUs then they will take a fraction of their equity. It sounds like investors got out okay, but employees got fucked big time. It's a terrible exit and Brex waited too long until their growth stalled.

Hopefully those who joined took the all-cash option when that was still available.

Re: Capital One to acquire Brex for $5.15B

#28

Post by toomuchtodo »

verdverm wrote: post #20
logicallee wrote: post #18

Earlier quoted context omitted.

I see you getting downvotes, but can you elaborate a little on what happened? What kind of business did you mean? If you don't want to share more here, you can email me.

Typical HNer, started a startup around some tech. Brex refuses to do business, even though I had positive cash flow, they apparently only have clients with VC funding. (at least at the time, I don't know if they later changed their policy.

If you don’t mind me asking, who are you moving to?

(in the industry, but not at a startup)

Re: Capital One to acquire Brex for $5.15B

#29

Post by molsongolden »

logicallee wrote: post #18
verdverm wrote: post #14

They refused my business because I didn't have SV VC money Chase got it instead, but they are losing it next month because of their shenanigans and greed Wish crypto hadn't been co-opted by the same people and worse

I see you getting downvotes, but can you elaborate a little on what happened? What kind of business did you mean? If you don't want to share more here, you can email me.

In 2022, Brex shifted away from SMB to refocus their offering. They cut "tens of thousands" of SMB customers who didn't fit their new ICP. They announced this in June 2022 and gave all of those customers 2mo to find a new provider and move their funds.

The new qualifications to be a Brex customer at that time were:

> Received an equity investment of any amount (accelerator, angel, VC or web3 token);

> More than $1 million a year in revenue;

> More than 50 employees;

> More than $500k in cash;

> Tech startups who are on a path to meeting the criteria above, and are referred by an existing customer or partner.

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