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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

#221

Post by bflesch »

pell wrote: post #188
bflesch wrote: post #45

Earlier quoted context omitted.

Stripe has for years helped non-EU companies to do tax fraud in the EU, and in a just world their management would be charged. Every time a customer in the EU pays with Stripe, they exactly know if they are a private customer or not and in which country that customer is located in. Stripe also knows who the counterparty is ("their merchant"). Yet Stripe systematically enabled their merchants to avoid paying appropria…

Stripe never claimed to handle tax however. Merchants have to handle tax on their own. This is no different than accepting cash or using a card terminal in your shop. The payment processor does not handle your tax for you.

There is no credit card terminal in the whole EU which is not tied to a point-of-sale system, which only purpose is to create INVOICES. Somehow the Stripe team forgot that fact.

Re: Capital One to acquire Brex for $5.15B

#222

Post by neilv »

zamfi wrote: post #198
itake wrote: post #62

Earlier quoted context omitted.

I'm curious how the employees faired. Seems like they may bet getting nothing out of the deal if the investors get their money back.

These days, most employees getting nothing out of the deal is par for the course for acquisitions, unfortunately. The acquisition price is almost never exchanged directly for shares in the company as implied, often a chunk of it is kept for key personnel retention, etc. Typically just enough goes towards the share purchase to make investors happy, and the rest is structured as incentives for founders and key execs wi…

> Typically just enough goes towards the share purchase to make investors happy, and the rest is structured as incentives for founders and key execs with milestone payouts.

So they're getting the employees' shares without compensating the employees?

And there's incentives paid to the people who approved the deal, separate from their shares?

(I've heard of liquidation preferences, but never by the person making a job offer with stock options. Bribery also never came up.)

Re: Capital One to acquire Brex for $5.15B

#224

Post by irjustin »

paxys wrote: post #13

Sold for $5.15B. Brex last raised $300M in Oct 2021 at a $12.3B valuation.

There's a lot of speculation about how different rounds will get paid out.

Unless someone has insider information and is willing to post, we have absolutely no idea who was made whole, who lost and/or who gained.

At the size of Brex, anything is possible and it depends on how much leverage they had at each priced round. Guaranteed payout, equal, founders multiplier, lead multipier. All possible.

Additionally, what people don't realize is the headline number can get severely inflated IF debt is included in the purchase price. If say their book was 4.3B in debt then the equity part is ~800m and all of a sudden everyone's underwater.

We simply don't know the details.

Re: Capital One to acquire Brex for $5.15B

#225

Post by DSingularity »

skrebbel wrote: post #220
throwup238 wrote: post #213

Earlier quoted context omitted.

Everything that's wrong with venture capitalism condensed into a single fifteen word sentence. Bravo. If you can't provide a billion dollars worth of value, extract a billion dollars worth of grift! I hear A16Z is hiring.

How is being outcompeted “grift”? I feel like I’m missing some context here.

Why do you start a startup? Is it to build an idea you believe in and believe it is potentially lucrative or is it so you can go through the motions, say the trendy things, and get outcompeted because in the end you are primarily focused on getting acquired with a 1B exit?

Re: Capital One to acquire Brex for $5.15B

#226

Post by otabdeveloper4 »

xp84 wrote: post #90
c2h5oh wrote: post #70

Earlier quoted context omitted.

Majority of EU population. Even in US debit is more popular than credit in 18-25 age bracket.

(Frame of reference: US only) That's a shame, given 18-25 is just the age where a credit card skimmer or online card fraud causing a big fraudulent withdrawal from your checking account, and weeks of waiting to get it back, could be devastating. This has happened to people in my family (likely from gas stations) but we only use credit cards except to pull cash from ATMs, so we only suffer a temporary dip in our avail…

In the rest of the world (not the US), "credit card" == "debit card without zero overdraft limit".

Re: Capital One to acquire Brex for $5.15B

#227

Post by qeternity »

DSingularity wrote: post #225
skrebbel wrote: post #220

Earlier quoted context omitted.

How is being outcompeted “grift”? I feel like I’m missing some context here.

Why do you start a startup? Is it to build an idea you believe in and believe it is potentially lucrative or is it so you can go through the motions, say the trendy things, and get outcompeted because in the end you are primarily focused on getting acquired with a 1B exit?

Spoken like someone who has never started a business. Brex raised much less than $5b and Capital One apparently thinks it is worth more than that (otherwise they wouldn’t buy it).

This is called value creation.

Re: Capital One to acquire Brex for $5.15B

#228

Post by pell »

bflesch wrote: post #221
pell wrote: post #188

Earlier quoted context omitted.

Stripe never claimed to handle tax however. Merchants have to handle tax on their own. This is no different than accepting cash or using a card terminal in your shop. The payment processor does not handle your tax for you.

There is no credit card terminal in the whole EU which is not tied to a point-of-sale system, which only purpose is to create INVOICES. Somehow the Stripe team forgot that fact.

I find your critique not very sensible. Point-of-sale systems are not necessarily tied to the payment terminal just because they communicate to each other. If companies choose to use Stripe they do have to set up their own invoicing and tax handling. Your comment makes it sound like Stripe hides this fact and thus users end up not handling tax or invoices because they were mislead. But if you run any kind of businesses being on top of taxes is obviously paramount. I don’t quite get your gripe here.

Re: Capital One to acquire Brex for $5.15B

#229

Post by hvb2 »

silisili wrote: post #210
hvb2 wrote: post #202

Earlier quoted context omitted.

Stay on your own rooftop please. That is a very US only view. There's nothing wrong with debit cards being used. If I can shout one thing back up to your rooftop: Why on earth do your transactions cost 2 or 3 percent. For what? For basically verifying an RFID chip and adding a single entry to a ledger? Don't say you're getting it back with points or whatever because we all know that the credit card company won't be g…

Of course it's a US view. It's a US site and the OP even prefaced it as such. Does every reply need to do the same? Retailers(in the US) typically eat the cost. Some industries(in the US), like gun shops, are up front about charging more for credit card payments. Most companies(in the US) just see it as cost of doing business. Points have next to nothing to do with why you should always use credit cards(in the US). T…

> Retailers(in the US) typically eat the cost

This is what I really have a problem with. It feels so incomprehensible to me that, assuming you're an adult, you can think this.

It's just a cost, if that cost didn't exist then either the price would be lower or the margin would be higher. In the end you're paying for it. You're the one exchanging money for a good/service.

This is proven by your other comment about how some sectors give you the option. I would rather have that option because those legal protections are useless for the majority of purchases. Good luck disputing that burrito you bought or those groceries. In such transactions you're basically just inviting a company to take a cut for 0 added benefit (aside from points).

Re: Capital One to acquire Brex for $5.15B

#230

Post by maest »

vl wrote: post #151
maest wrote: post #142

Earlier quoted context omitted.

With credit, it's the merchant who loses out. They get bullied by the credit card provider to eat losses. Relatedly, the credit card system is truly a tragedy of the commons situation. It's a ~2% drag on the economy for what? For some silly points with constrained value and an excuse to not build better financial infrastructure. The frustrating thing is that, given the current equilibrium, you're a sucker for not usi…

What 2% drag? Aren't you using credit card with 2% bonus? Just see it as 2% reduction in prices.

Even ignoring the cut taken by the credit card issuer, why do I have to go through some random card to get a 2% discount, when prices could just be 2% lower across the board by default?
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