Serving Startups with Henrique Dubugras and Michele Romanow | Summary and Q&A

October 2, 2019
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Serving Startups with Henrique Dubugras and Michele Romanow

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In this video interview, the founders of Brex, a fintech startup, discuss their business model and the challenges they face in the industry. They address the recent launch of a competing product by Stripe, as well as the increasing demand for alternative financing options for startups. The founders also discuss the impact of venture capital on founder equity, the importance of data in underwriting decisions, and the potential effects of a recession on their business. They express their commitment to remaining independent and their long-term vision for Brex.

Questions & Answers

Q: How does Brex differentiate from Stripe Capital?

Brex provides financing to startups based on revenue generated from ad spend, without personal guarantees or fixed payment timelines. This differs from Stripe Capital, which offers financing to their existing customers at a flat fee.

Q: Did Stripe copy Brex in launching their corporate card?

While the similarity between Stripe's corporate card and Brex's offering is surprising, the founders believe that there is room for both companies to be successful in the market.

Q: Is Stripe a big threat to Brex?

Although Stripe is a larger and more established company, the founders believe that their focus on specific products such as Brex Cash and Brex Card will allow them to compete effectively.

Q: How do you view the increasing competition in the space?

The founders acknowledge the growing number of startups in the space, but they also emphasize the existing challenges faced by founders when trying to raise capital. They believe that their data-driven approach allows them to identify promising companies and provide non-dilutive financing.

Q: Has the demand for alternative financing options exceeded your expectations?

Yes, the founders did not anticipate such high demand for their product. They highlight the fact that 40% of venture capital dollars are now spent on ad spend, which could be financed more efficiently with non-equity funding.

Q: How does Brex's underwriting model use data advantages to support female founders and founders from states with limited access to venture capital?

Brex's data-driven approach allows them to identify promising companies that may have been overlooked by traditional venture capital firms. As a result, they have been able to back eight times more female founders than the industry average and have deployed capital in 43 different states.

Q: How much of Brex do the founders own after raising large amounts of venture capital?

The founders do not disclose their ownership percentage, but they acknowledge that as the company has raised more capital, their ownership has decreased. They explain that this is a common challenge for many founders.

Q: Do you think venture capital is broken?

The founders believe that the traditional model of venture capital is not well-suited for certain types of financing needs. They argue that capital should be allocated based on the specific use case, rather than equating all forms of funding with true risk capital.

Q: How does Brex's model address the diversity issue in venture capital?

By using data science and AI, Brex is able to underwrite loans based on unit economics and data, rather than relying solely on human interactions. This allows them to overcome some of the limitations of the human-to-human nature of traditional venture capital.

Q: What has been the most challenging part of building a fast-scaling fintech startup?

The founders highlight the pressure of high valuations and high expectations as one of the most difficult aspects of scaling their business. They also mention the challenges of maintaining deep relationships with employees as the company grows.

Q: How do you think your business models will fare in a recession?

The founders believe that their real-time underwriting model, along with their reserve of funds, will help them navigate any potential downturns. They also point out that a recession could present new opportunities for investment if other venture capitalists pull back.

Q: Have you been approached by companies looking to acquire Brex?

Yes, the founders receive inquiries from banks and other companies interested in acquiring Brex. However, they are committed to remaining independent and believe they can have a significant impact in the industry.

Q: What is the long-term vision for Brex?

The founders are focused on leveraging their data advantages to continue innovating and supporting startups. They believe there is a large market for their products, both in the US and globally, and they aim to remain a key player in the space.


Brex, a fast-growing fintech startup, distinguishes itself by offering non-dilutive financing based on revenue generated from ad spend. The founders highlight the challenges faced by founders when trying to raise capital and the need for alternative financing options. They believe their data-driven underwriting approach gives them a competitive advantage and allows them to support underrepresented founders. The company is committed to remaining independent and plans to continue innovating and expanding its product offerings.

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