The Exchanges

Q always frame this because Brex is all about performance. Spending smarter, moving faster. The intelligent as fuck. I'm sorry. Intelligent agentic finance platform. So core component that I believe with performance is all about who you surround yourself with or who you are, you admire, who you look up to. So who is that for you? Is there anybody, especially as you go through a huge life milestone like this?

A Yeah. I would say, I think there are sort of two buckets, right? There's the, You know, the sort of aspirational folks that, you know, the more you learn about the way they see the world, the more you can build a little bit of a mental model of who they are. Uh, I think for me, the, the people that I think are pretty tremendous at this, uh, Steve Jobs for me is a very clear one, uh, of transcending, you know, where technology ends and where Art, human connection starts. I think that's a very special combo. Um, I would say the second one is, uh, I'm a big fan of Charlie Munger. I think he has this very visceral way of, uh, understanding and, and, and sort of exploiting reality. Um, and it was very useful. A lot of the mental models that he has over the past two and a half years at Brex. Um, and, uh, and, you know, I think, I think there's a lot of companies that I admire. I mean, I think You know, Brian from Airbnb. It's fantastic. Tony from DoorDash. Uh, I learned a lot from a lot of these folks. Um, but, but, you know, when, when I think into sort of who are the people that I actually spend a lot of time with day to day, uh, that were incredibly inspiring. Um, I would say, uh, Victor Lozarty, who was a benchmark and now is running and running and crushing his own fund. Uh, he's been on my board since day one. He was our, one of our first early investors. He's Brazilian. Um, Li…

AI assessment note: “I think there are sort of two buckets, right? There's the, You know, the sort of aspirational folks”

Q Close out. This is the most difficult question I'm going to ask you today. This question is from Omnicorp. Are you happy?

A Very happy. Very happy. Um, look, I think, I think at the end of the day, like, I'm not gonna lie. The last two and a half years were really hard. Uh, there was a lot of, um, A lot of uncertainty, really high attrition. Like, reaccelerating growth is really hard. Uh, most companies can't do it. It's just really hard to reignite the thing that made you great. Because you're much bigger, there's much more scale, there's scar tissue everywhere. Um, so it, it took a lot from me and the team, uh, on a very personal level, like a lot of stress and anxiety and, you know, keeping my mental health, the team's mental health in a good place, uh, took a lot. Um, so, so I, I think the outcome is, is of course really exciting for everyone, and we're really excited to build this part of Capital One, but, but I think to me the most exciting thing is This allows me to go back and say all of this really fucking hard work was worth it. And, and there's a thing which is saying, well, the numbers are better, the metrics are better, and the customers are happier, the NPS is higher, and the retention is higher. Like, all these things, of course, they matter, right? But there's a very big difference between that and saying, here's a crystallized outcome, which is the biggest deal of this size that ever happened in history, and the scale of a bank and a fintech company. Uh, and by the way, here's what …

AI assessment note: “Very happy. Very happy. Um, look, I think, I think at the end”

Q Another question from Nicole Wishoff. What are the trade-offs of M&A now versus IPO later?

A God, hot, hot question. Um, I think, I think the biggest trade-off is to understand Things over the fullness of time and not as a point in time. So a lot of folks say, well, let's IPO. Right. But the reality is like public markets require a story that continues to compound over a very long arc. Um, and you know, our business is compounding at 40, 50%. So, so on one hand, that's a really exciting thing. On the other hand is, I think the way to think of public markets is there is like volatility. Like that is just beta. It's just like, it's just the markets moving and, and that there's things that affect the perception of your business and where you trade that are completely outside of your control. So, so I think for us, it was, it was a question of like one versus it was a, you know, incredible outcome. So, so it was hard to compare it to an IPO, uh, in many ways. And the second one was when you look into an IPO, How do you factor in the cost of beta, the cost of just volatility in, in, in the stock, in the market that is independent from your execution, right? And what does that do to your team? And, you know, we had a lot of friends that, you know, did incredible IPOs, uh, over the past few years, but you know, the stock's trading is 70% down. And I think that is psychologically very different, uh, and very hard for, for the team. So, so that's how we, how we thought about it…

AI assessment note: “How do you factor in the cost of beta, the cost of just volatility”

Q So you were aggressively courted, and sometimes when someone's, you know, a little bit more on the offense for you, it's hard to see the reality of deals, right? Or the reality of how things are operating. So being aggressively courted by Capital One, how did you and your team then have the discipline to look objectively at that business and see if it was the right partner?

A Yeah. So, so first is, you know, we didn't have to do this deal, right? And I think that's the thing that is an important reminder, which is, look, we could have raised more private capital. We could have IPO the company. Um, and, and, and, and, and looking at the set of options that existed, we still decided to pursue this. So, so, and then second is the company was never for sale, right? So they approached us and said, we want to take a look right now. Uh, because we're really excited about what you're doing, uh, on, on, on the sort of broad U S economy on the, on the sort of the way you're scaling outside of tech, the way you're going to offer the enterprise. So, so I would say it was, it was, it was one, not, not, not the only path. And second, it was something that because it wasn't the only path, the alternatives are very credible to not doing the deal. And that puts you in a position to approach it, uh, much more, uh, Rationally and objectively, where we said, look, at the end of the day, um, you know, when we look into who are the range of partners that we would do this with, um, Capital One has always been, you know, A bank we admired tremendously, largely because they invented Vintech and because of Rich and being founder led. Um, and then I would say the second thing is we never thought of selling the company. And this may sound weird given we did it, but, but at the…

AI assessment note: “because it wasn't the only path, the alternatives are very credible to not doing the deal.”

Q Now that you've signed the official document, you are now legally required to share everything about this M&A transaction. How did this happen?

A Oh god. Okay, so, uh, maybe, maybe let's sort of recap. So, Um, so it happened very fast. That's the first thing. And then maybe sort of to recap, I think it's good to start on why Capital One did what they did, then why we did what we did, and then what we think this means for customers and the industry more broadly. So, so maybe starting with Capital One, I mean, um, they, a lot of folks that understand a lot about financial services have a lot of respect and admiration for them. But the reason is because they're really the first FinTech. They sort of invented this idea of FinTech and, and what they did in the nineties, they realized that, you know, consumer card underwriting was like dramatically inefficient. And when you brought in data and technology into the process, you could dramatically expand the number of customers you served and the customer experience and the amount of credit you give to them. Uh, and, and Rich, uh, started the company, uh, you know, 30 years ago with that thesis. And, and You know, over time after time after time, Capital One has been very aggressive on investing technology ahead of, like, a lot of their peers, and, you know, it's the only bank, if you look at a massive scale, that doesn't run on mainframes. It's actually on cloud. So they've spent a lot of time sort of positioning themselves in that direction. And when they looked into this marke…

AI assessment note: “I think it's good to start on why Capital One did what they did”

Q activity on X, and it was a lot of ramp supporters or investors, that sort of thing, that were Calling a victory lap. And then we're also kind of saying a lot of distasteful things. I've never seen anything like that before. What was that like for you as a CEO who had just made the biggest fintech bank acquisition of all time and seeing lots of passive aggressive notes?

A Yeah, I think, I think at the end of the day, it was a little bit the way we started this conversation, which is you have to remember that everything converges to public markets eventually. Uh, and, uh, and you know, like, You know, the numbers are private, but you know, people, Silicon Valley is a small world. People understand where, uh, where, where relative value is and where people trade. Um, and, and, you know, we've seen that movie before. Um, so, so I think for us so much of the past two and a half, three years was about tuning out of everyone and everything that we hear about, you know, Twitter and, you know, and, and like, and, and people talking about things and, and, and, You know, what about Brexit? Is Brexit status Brexit life? And, and, and just saying every ounce of energy we spent on that versus actually fixing the company, improving the quality of the product, improving the way we do go to market, increasing the rigor on hiring, making the culture stronger. This bucket was so much more meaningful than by a factor of like 10,000, right? Versus like paying attention to like, you know, where, where were the vibes on X, right? Um, and, and I think to me this was similar, which was like, you know, it was actually really exciting to see that because, you know, of course, you know, a lot of the reactions were, you know, I, I think, I think, um, Probably not, not the …

AI assessment note: “it was actually really exciting to see that... in some ways it was very validating”