Brex Lays Off 62 Employees
thesfnews.com
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Arbitration will be administered by JAMS...
Like Paypal.
Ha ha ha.
> and what's wrong with their security?
Paypal balances are not FDIC insured. They're vaguely moving in this direction (it's in "beta"). But they've been in operating without FDIC-insured deposits for the last 20+ years.
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.
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.
They are claiming that they are growing their engineering team.
I was always confused by the name... who thinks Brex is a good choice? I mean Brexit was already a big thing in 2017.
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.
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.
What does this mean, specifically?
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.
EDIT: Here we go again, lack of sense of humour including puns on HN as well as the pun-ished 'B' word.
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.
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.
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.
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.
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!
UK has notice AND consultation requirements.
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.
Brex on the other hand looks at your company state.
This allows Brex to capture card transaction fees from financial services other banks ignore (again, due to risk models), such as startup charge cards.
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.)
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.
I think the reason large banks haven’t offered this yet is they’re not very catered to startups, which might have a large balance but no credit history (either as a business, or because the founders are young or foreign).
(My company somewhat competes with Brex cash but doesn’t offer a charge card or credit card product)
Brex’s gameplan though seems to be a full set of financial products targeted at startups that integrate well together, like per-employee charge cards, cash accounts, and revolving lines of credit. In that sense, they would start to look more like a streamlined and modernized (but riskier) SVB.
Why is it that much better than a normal business line of credit or credit card? Do they give loans easier than those, or let you pay in equity or something?
Do they have better integrations with corporate IT systems?
I accepted an offer with one of the big tech companies instead.
Glad they rejected me.