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I don't understand this, what is their business model exactly? Aren't they just giving out loans like a VC with other VC money? Why can't the VCs invest directl
by Rainymood 8y ago
I don't understand this, what is their business model exactly? Aren't they just giving out loans like a VC with other VC money? Why can't the VCs invest directly without Brex taking their cut?
- whoisjuan 8y agoThey give liquidity and access to the financial system to startups that otherwise will have to go through a lengthy process to get something as trivial as a credit card. This is not meant to replace access to capital. It's meant to provide the same flexibility that a credit card gives to an employed individual. It allows small startups companies to simplify the way expenses are managed. I have worked in a lot of startups where you will need to go and ask one of the founders to buy something that you need for work, because there's only one corporate debit card. My understanding is that Brex fixes this.
- closeparen 8y agoBrex is a charge card; they're not really making loans, just letting businesses wire up their bank account balances to credit card acceptance infrastructure (which is much widely adopted than debit card infrastructure). Like any other player in the payment card business, they get a cut of the transaction fee charged to merchants.
- skinnymuch 8y agoDon’t they still take the risk for one month? Startups aren’t all stable. Some might get into problems during that month and not be able to pay, no? Or is this just a debit card?