
Brex Lays Off 62 Employees - SQL2219
https://www.thesfnews.com/local-startup-brex-lays-off-62-employees/56172
======
Animats
It's like a bank, but without the safety and security.

 _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..._

~~~
closeparen
Is the zero fraud liability policy normal in business banking? AFAIK it's a
consumer thing.

~~~
tuxxy
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.

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refurb
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](https://en.wikipedia.org/wiki/Bre-X)

~~~
cortesoft
Also, Brexit is on everyone's mind these days.

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salehenrahman
I just got a recruiter email today from them, yesterday.

They are claiming that they are growing their engineering team.

~~~
jeffbee
I got recruiter spam from them within the week, too. "We're in one of the most
fun times of a startup" LOL.

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someonehere
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.).

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pl0x
Serious question, why does Brex even need to exist?

~~~
streetcat1
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.

~~~
mandelbrotwurst
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?

~~~
toomuchtodo
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.

~~~
throwawaygh
_> 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.)

~~~
toomuchtodo
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.

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kerng
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.

~~~
texasbigdata
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.

~~~
adenta
Would love to learn some more about your experience. We use Brex, and this
makes me nervous.

~~~
texasbigdata
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.

~~~
adenta
> 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?

~~~
texasbigdata
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.

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jiveturkey
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.

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danielfoster
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.

~~~
nopzor
amex won't give most startups a credit line that is free of personal
guarantees. that's the point.

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lsh123
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.

~~~
goatinaboat
_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.

~~~
phonon
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.

~~~
goatinaboat
_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!

~~~
phonon
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](https://www.gov.uk/staff-redundant/redundancy-consultations)

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dianastamm
Overhyped company

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pkzip
So many people.So little product.

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christiansakai
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.

