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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

#301

Post by nokun7 »

Klonoar wrote: post #247
nokun7 wrote: post #189

That's less than half of Brex's crazy $12.3 billion peak back in 2022. But honestly, it’s still one of the biggest fintech deals ever and actually gives people real money in a market where most unicorns are just stuck. The founders are reportedly splitting about $1 billion each, early investors (2017-2018) are getting 12-80x returns, and YC’s tiny $120k seed turned into ~$100 million (800x, insane TBH). Even later fo…

“Breaking even” on what? The cost to exercise? Or the missed opportunity cost of going somewhere else?

What I mean is that later employees—especially the ones who joined during the 2021–2022 hype when Brex was valued at that crazy $12.3 billion peak—got their RSU grants priced at those very high levels. That meant their equity was basically "underwater" once valuations crashed post-2022; the shares they were promised wouldn’t pay out much (or anything meaningful) unless the company somehow got back to those crazy heights.

To keep people from jumping ship and to make things feel fairer, IIRC in 2024 Brex did some RSU "top-ups" - basically, they handed out extra shares at the much lower current valuation to compensate for the drop and give those folks a better shot at actually making some real money or "breaking even".

Re: Capital One to acquire Brex for $5.15B

#302

Post by blindriver »

swyx wrote: post #293
blindriver wrote: post #21

Earlier quoted context omitted.

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.

sorry how did employees get fucked? theres more money after the 1.7B.

All the investors before 2019 got multiples of their investment.

So series B is worth about 250M and series C is worth about 625M. Series C-2 is worth about 1.5B. Series D is worth 425M and Series D2 is worth 300M because of LP. That's a total of 3B.

That leaves 2B for everyone else. Most employees are going to get fucked big time, especially the ones after 2019. They will get a small fraction of their RSUs and all their options will be worthless, if they had options.

Re: Capital One to acquire Brex for $5.15B

#304

Post by dpc050505 »

weird-eye-issue wrote: post #63
LgWoodenBadger wrote: post #35

Capitalone is going to need something to make up for switching all their debit cards from MasterCard to Discover

Who in the world uses debit cards

Using my debit card doesn't force the vendor to send 2-3% of the transaction to a company that's in a country threatening to invade mine in exchange for piss poor rewards.

Re: Capital One to acquire Brex for $5.15B

#305

Post by dpc050505 »

lotsofpulp wrote: post #260
Intermernet wrote: post #258

Earlier quoted context omitted.

That's like asking "what does rent have to do with property prices?". Just because you've managed to be on the top of this perverse social summation of usury doesn't mean it isn't predatory and a net negative for society. Credit cards are one of the most insidious ways that banks extract money from those living closest to the margins of poverty. The benefits you gain are a fraction of the profits gained from raking t…

It has been legal for sellers to ask buyers to pay more if they use a credit card for 15 years now. There is no "moral" quandary. Sellers that have the same price for credit and non credit payment methods are simply betting that people using credit will be more willing to pay higher prices overall and still buy from them compared to their competitors' with lower prices who charge more for credit cards. Every year, fe…

>It has been legal for sellers to ask buyers to pay more if they use a credit card for 15 years now.

Not in the jurisdiction I live in. You should not generalize your local laws to the rest of the world.

Re: Capital One to acquire Brex for $5.15B

#306

Post by lotsofpulp »

dpc050505 wrote: post #305
lotsofpulp wrote: post #260

Earlier quoted context omitted.

It has been legal for sellers to ask buyers to pay more if they use a credit card for 15 years now. There is no "moral" quandary. Sellers that have the same price for credit and non credit payment methods are simply betting that people using credit will be more willing to pay higher prices overall and still buy from them compared to their competitors' with lower prices who charge more for credit cards. Every year, fe…

>It has been legal for sellers to ask buyers to pay more if they use a credit card for 15 years now. Not in the jurisdiction I live in. You should not generalize your local laws to the rest of the world.

Sorry, I should have specified I was referring to the US. I would be surprised to learn of any other major country that doesn't allow it though, since the US is considered to be among the most hostile to customer protections.

https://www.ftc.gov/business-guidance/resources/new-rules-el...

>Discounts to Customers

>A PCN cannot stop you from offering your customers a discount or another incentive for using a certain method of payment, as long as you offer it to all your customers and disclose the offer clearly and conspicuously. For example, you can offer your customers a discount or a coupon if they pay with cash or a debit card rather than a credit card.

Re: Capital One to acquire Brex for $5.15B

#307

Post by another_twist »

okhobb wrote: post #263
another_twist wrote: post #233

Earlier quoted context omitted.

Distribution is king. Kudos to Ramp for that. My weird thesis is that for whatever reason Ruby on Rails shops just seem to survive more. I wonder if someone did a stack specific survival rate analysis.

Pretty sure Ramp uses Elixir.

the Ruby on Rails of Erlang, I guess. Maybe we just generalize the thesis to - the stack must be the ruby on rails of X language.

Re: Capital One to acquire Brex for $5.15B

#308

Post by Ancalagon »

derektank wrote: post #89
Ancalagon wrote: post #53

Earlier quoted context omitted.

I feel like one of their primary investors wanted out. It was probably not the opportune time considering the cost of money right now.

Is there any reason to think the cost of money is going to improve at all in the foreseeable future?

well, yes, if Trump gets his way and gets a crony as the FED chair, interest rates will probably go very low

Re: Capital One to acquire Brex for $5.15B

#309

Post by tyre »

jt2190 wrote: post #280
tyre wrote: post #166

Earlier quoted context omitted.

Employees get options at common stock prices. The valuations you see, like $12bn, are for preferred stock. So no employees got stock priced at $12bn, but all of them get paid at a $5.15bn valuation. Not saying they did well, but depending on the 409a valuations, they still might have made money. Edit: friends, if you’re going to downvote please leave a comment as to why. It’s okay to disagree! There’s a lot of mislea…

> Employees get options at common stock prices. More specifically, when employees are granted options contracts the strike price of those contracts is based on the last valuation of the company prior to the grant. If all is going well and the valuation is increasing those options are also increasing in value. Here we have a sale which values the company lower than the prior valuation. Recent option grants will likely…

The way they get to $12.5bn is multiplying the preferred share price by the total outstanding shares. But the common shares, while still included in that calculation, are not worth the same amount of money.

They have a different strike price for options that is set via a 409a.

It’s possible that employees got, at the peak, grants with strike prices at a $2bn 409a valuation. We don’t know. What we do know is that no employee ever got grants with a strike price of a $12.5bn valuation. That’s just not how this works.

Re: Capital One to acquire Brex for $5.15B

#310

Post by [deleted] »

blindriver wrote: post #302
swyx wrote: post #293

Earlier quoted context omitted.

sorry how did employees get fucked? theres more money after the 1.7B.

All the investors before 2019 got multiples of their investment. So series B is worth about 250M and series C is worth about 625M. Series C-2 is worth about 1.5B. Series D is worth 425M and Series D2 is worth 300M because of LP. That's a total of 3B. That leaves 2B for everyone else. Most employees are going to get fucked big time, especially the ones after 2019. They will get a small fraction of their RSUs and all t…

[deleted]
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