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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 rais

by lsh123 6y ago

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 6y ago
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 6y ago
  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 6y ago
    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 6y ago
      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
JakeTheAndroid 6y ago
The reason you don't understand how we raised so much money is because you don't understand how the business works apparently. Unless you're saying all credit card companies are the same as predatory payday loans or subprime loans, Brex is no different. Brex is required to do underwriting to determine the amount of credit that can be provided to a company. Underwriting has legal thresholds that must be met. Brex is required to have AML processes in place. And unlike most corporate cards, there is no personal guarantee owned by the founders. And since we have a fairly high threshold to qualify, it hedges risks for both parties. It's not like Brex is handing out 50k in credit to a 10 person startup with no VC. payday loans and subprime debt targets people that cannot afford to pay what they take out. I am not sure how you think that is even remotely close to what Brex, Amex, SVB, or anyone in the space is doing. Brex isn't entirely unique, but it's also not predatory. And, if you take some time to learn the industry, you can see that there are plenty of areas that are legacy that are due to be rebuilt and re-examined. Whether we at Brex will be the ones to properly innovate in that area remains to be seen, but I am pretty confident we are at least moving in the right direction. Disclaimer, I work at Brex.

by lsh123 6y ago

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 6y ago

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 6y ago
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 6y ago
  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 6y ago
    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

JakeTheAndroid 6y ago

The reason you don't understand how we raised so much money is because you don't understand how the business works apparently. Unless you're saying all credit card companies are the same as predatory payday loans or subprime loans, Brex is no different. Brex is required to do underwriting to determine the amount of credit that can be provided to a company. Underwriting has legal thresholds that must be met. Brex is required to have AML processes in place. And unlike most corporate cards, there is no personal guarantee owned by the founders. And since we have a fairly high threshold to qualify, it hedges risks for both parties. It's not like Brex is handing out 50k in credit to a 10 person startup with no VC. payday loans and subprime debt targets people that cannot afford to pay what they take out. I am not sure how you think that is even remotely close to what Brex, Amex, SVB, or anyone in the space is doing. Brex isn't entirely unique, but it's also not predatory. And, if you take some time to learn the industry, you can see that there are plenty of areas that are legacy that are due to be rebuilt and re-examined. Whether we at Brex will be the ones to properly innovate in that area remains to be seen, but I am pretty confident we are at least moving in the right direction. Disclaimer, I work at Brex.