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> is going to extend 10x as much credit as established institutions (without collateral) to random startup execs? There functionally is collateral. They monito
by philip1209 8y ago
> is going to extend 10x as much credit as established institutions (without collateral) to random startup execs?
There functionally is collateral. They monitor your bank account, you need min $50K in cash in it, and they only extend credit that's something like a quarter of your cash balance. It's a charge card, so you can't carry a balance.
It makes a lot of sense for cash-rich startups. The model doesn't work (in this form) for many small businesses.
- CPLX 8y agoSo basically it’s a product for valley startup type companies that just closed rounds of financing, but don’t yet have sophisticated financial controls and cash management and banking relationships? That makes a lot more sense, but is that really a large addressable market? Is the idea to beat Amex with reporting?
- philip1209 8y agoI think the idea is "cash is all the trust we need." It's parallel to Square or Stripe. "Is getting a merchant account really that hard?" Yes, it turns out it is. It's the same thing with credit cards - you shouldn't have to personally guarantee your company's credit. It also competes directly with the expense market. If everybody can have a controlled company card, why do you need expense software?
- skinnymuch 8y agoAh I didn’t realize you need $50K minimum in your bank account. That changes things quite a bit, but also makes sense for them.