Exclusive: Brex’s $5.15B Capital One Acquisition | CEO Pedro Franceschi

26:10And, you know, of course, I spent a lot of time at Rich understanding how would we operate? What would be the things that would be, you know, priorities on day one? What would be the things that would be priorities later? And one of the things that was really interesting is, you know, when we thought about what are ways in which this can go right and things can go wrong, a very big thing is this idea of how do we make sure that this become an accelerant for the company, an accelerant for what we're doing. And, you know, capital on doesn't crush the butterfly, which is Brex. And one of the things that we spent a lot of time is creating this idea, which is, you know, ultimately, of course, there's going to be some things that we have to integrate like financial reporting, right?

26:52But ultimately it's more exciting to integrate things into Brex than Brex into things. And when you see this mindset of saying, look, yeah, traditional M &A and integrations are done in this very specific way, but we're willing to do something different in service of growth, in service of this being accretive to the trajectory of the company, that was really inspiring. And it's something you notice on every conversation. We met like, I don't know, 30, 40, 50 people on their side over the course of the month we spent together. And it was remarkable just to see the degree to which that culture permeated all the way down to every level of the organization.

27:31Turing is training the next generation of AI with tasks that require real expertise and real world judgment. That's why companies like NVIDIA, Anthropic, Salesforce, and Gemini partner with Turing. Turing builds realistic reinforcement learning environments and data systems based on real operational traces. the kind of infrastructure Frontier Labs need to train superintelligence. Visit Turing.com slash S-O-U-R-C-E-R-Y. What was the diligence process on your side? Did you use your existing team? Who did you, who was the team involved in this? So we had very few people. We had probably 15, 20 people in total at the end.

28:13But the majority of it was just a leadership team. And one of the things that's interesting is, you know, So and Capital One had, you know, four of their size. They had sort of a small number of people, more than us, right? Probably like four or five times more than us. But at the same time, what was interesting is, you know, there were a lot of meetings that you went into meeting and, you know, the level of detail that our team could go in still, like, is still remarkable to me. So, you know, I remember, you know, going into meeting and then someone asking a question about the way our financial infrastructure worked, the way our banking core did something.

28:51And then James, our CTO, being like, well, I'm talking about the product strategy and what we're building and the sort of direction and vision. But then this is the way we actually do serialization in the database to make sure money is consistent. And one of the things that we really believe in is we have this principle that we call operate at all levels, which is like leaders need to be exceptional individual contributors in whatever they do and never lose connection with the craft. and going through diligence was super interesting just to see in every function, right? I mean, like, you know, Garrett, our CRO, was amazing as well of just like explaining, yeah, this is a strategy.

29:26This is the way we build our sales org. This is the way we build our teams. But also, here's what exceptional deal execution looks like, right? Here's like the way we actually handle an individual customer relationship and contract and negotiation and pricing and to a level of detail that was really exciting for me to see. So it was very few people going super deep. And, you know, we had a, you know, sort of before diligence, it was basically, you know, me and Ben, our president who runs the company with me. And, you know, and a lot of it, honestly, was just getting all the people to, you know, of course, understand the importance of, you know, of explaining everything to a great level of detail.

30:10but also at the same time i would say um the fact that people just really knew the business well so they could go to the level of detail they didn't need to involve that many more people uh but you know very intense i would say a lot of people were doing 18 hour days 20 hour days so it was definitely it was definitely very energy energy consuming but uh you know we got some great outcome so 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?

30:58Yeah. 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. And in looking at the set of options that existed, we still decided to pursue this. 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 because we're really excited about what you're doing on the sort of broad US economy, on the sort of the way you're scaling outside of tech, the way you're going to after the enterprise.

31:33So I would say it was one, 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 much more rationally and objectively, where we said, look, at the end of the day, when we look into who are the range of partners that we would do this with, 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. And then I would say the second thing is we never thought of selling the company.

32:15And this may sound weird given we did it, but at the end of the day, you know, we always saw Brax as an independent company. And I would say the reason is because when you talk to anyone in the company today, There is a very high degree of obsession about winning and becoming really big and just like achieving really large scale. And that has always been like the north for us. It was always about like how we maximize the potential of this product and this idea and this way of running your finances as a company. and and and it's almost like if you subordinate everything else to your mission what does that mean about the way you actually choose the right outcome for the company right and and and we had always sort of assumed that it would be going public because that is what a lot of companies do but when we started to go deep and when i spent time with rich and i started to go deep into what could this actually look like um it was so unique that it was impossible to and see it, which is like, look, we can accelerate five, seven, 10 years of growth.

33:22We can invest at a level of R &D, especially on AI, that would take us a long time to get to from a standalone basis. And then three is we sort of jumpstart this entire industry by saying, you know, not only we're going to do this, you know, across card banking, business management, bill pay, accounting AI, but at the same time, we're going to do this as a bank at a country level scale and globally on the enterprise side, when we think about everything we do with companies that operate across multiple countries. And that was really compelling. And then maybe the last thing, which is particularly interesting, is I wasn't interested in leaving or stopping to work at Brex.

34:11So to me, it was really important that like this wasn't. And I always thought of like an acquisition as like a goodbye. You're saying, oh, the company is going and I'm staying. And the thing is that never felt that way because it was actually about the mission. It was about like how do we accelerate and fuel this belief that if we subordinate everything to maximizing the scale of what this company can be, we should subordinate that decision as well. And the more we thought about it and the more we went deep and the more we thought about, OK, what are all the things that this thing can become with a partner like Capital One, remaining independent with me as the founder and CEO, with all the things that I think we got to from a structure standpoint, that was pretty special.

34:54So it doesn't feel like an exit. I think that's the thing that is so different for me. So you're doubling down on war mode. 100%. 100 % doubling down. I think it's so funny because there is clearly a very severe competition between Brex and Ramp. And I have to admit, it's entirely entertaining on X. And it might only exist on X, by the way. I don't know if anybody else knows about this, but it seems to take the tech world by storm. So how is that going to play into this next chapter and this new story for Brex? Yeah. So first, we have huge respect for them. They've been an incredible company. And the thing that is remarkable is, you know, yes, both of us are the new players.

35:41And Braxton Ram combined probably have 3 % of the U.S. markets. so so at the end of the day you know we don't spend a lot of time thinking about them they probably don't spend a lot of time thinking about us because that is not who we're really competing with if you go into the deals and you look and you go on the streets of the sales teams and you see who are we seeing it's not ramp it's not brex it's amex it's jp morgan it's like big national banks it's wells fargo it's city it's bank of america those are the players that are actually out there and I would say look I think the way we think about it is you know just because of the scale of this thing Brex would be the third largest corporate car in the country after closing so really the question is like how do we put this on a trajectory to be you know more meaningful for customers than Amex and JP Morgan right and that's really who we're ultimately competing with now so for us it's you know sort of graduating a little bit you know how we think of the competitive set and the set of outcomes that we can build.

36:41Because also the set of tools available for us to go build are different, right? From having a$6 billion marketing budget, a$6 billion R &D budget, just a very different level of scale, brand presence across a variety of products, not just card. And we think there's going to be space for many winners. but you know for us this was a way of just like jump starting the competition for the next like five seven years and uh and still be really uh really proud of what we build that uh you know embrace being the biggest platform in the country on the day of this announcement there was an onslaught of 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.

37:37What 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? Yeah, 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. And, you know, like, you know, the numbers are private, but, you know, Silicon Valley is a small world. People understand where relative value is and where people trade. And, you know, we've seen that movie before. 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 like and people talking about things.

38:27and what about Brexit status, Brexit life? 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, where were the vibes on X, right? Right. 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 think I think probably not not the most constructive.

39:11And then our team seeing people's reactions to those reactions was like, oh, my God, we actually built something tremendous. Right. To a degree that, you know, I think if it wasn't that polarizing, you know, maybe the team would have less validation from the outside. So in some ways, it was very validating because people were like, this is a big fucking deal, like$5 billion of liquidity in 100 % of the stock, right, was really compelling. Because the other thing that people forget, even though it's relatively obvious, is, you know, when someone fundraises a private company, you're selling 1-2 % of the company, right?

39:48When you're selling, when you're doing a transaction like this one, you're selling 100 % of the company. So there's a very big difference between putting in 100 million, you know, at a very high price and pay, you know,$5.15 billion of like cash and liquid stock into an actual asset that grows and compounds. But, you know, like I think there's going to be many winners and, you know, we have huge respect for them. But, you know, I would say I would say, you know, over the fullness of time, we're going to see how these things play out. But, you know, I think I think we we get to build with, you know, a much, much bigger war chest and pockets now, which will be really fun.

40:30Very fun. It's gonna be a lot of fun to be direct as possible with this next question. Are you ready? Go for it. Well, there were clear marketing attacks against Brex in this acquisition, whether it was email marketing or online. What do you do if you're a service provider, if you're a corporate card, if you're a finance stack, if it gets acquired? And so what does this actually mean for your customers? What does this mean for startups? So here's the thing. Brex is only going to get better for two reasons. because I remain the founder and CEO and I will continue running the company for as many years as I can inside Capital One.

41:09And the second thing is we now get to invest so much more aggressively than we ever did in AI in accelerating the roadmap across so many fronts that we weren't able to invest as a standalone company because we had to make resourcing decisions. And the third thing is when you go, especially after customers that are outside of the tech bubble, like a traditional mainstream business in the US economy, they know what Capital One is. There's like a trust associated with that. And when you go after the enterprise, they say, well, I can make a bet on a random private company, or I can make a bet on$150 billion public company that I can go in and understand their business and their financials and what they're about.

41:50And that is very compelling on the enterprise. And we've seen already in five days, very different tone from prospects on the enterprise and like Fortune 100, Fortune 50 companies that wouldn't take us as seriously as they did after this. That was really compelling. And I would say the last thing is for startup customers is, you know, next year, for example, we're increasing our startup team by 50 percent. Sorry, this year. And you don't do these moves. You don't invest much more aggressively in R &D. If you don't fundamentally believe that startups really matter. And it is where we started the company.

42:28It is our ethos. It is our DNA. And for us, it's always been about like setting the stage for what happens in the rest of the market. Everything we build started with startups because they, you know, if you just look at every single technology, adoption starts in early adopters and innovators, and then they go into early majority, then late majority. Right. And we're now at this moment where I think Brex is going into early majority, finally. But at the same time, the innovation, all the things we're building, they follow the exact same cycle. When we think, for example, the agents we're building now on AI, and we see the reaction of a customer when they see something that took hundreds of hours being done in 10 seconds.

43:14Again, this starts on companies that are more tech forward, typically smaller startups. And then eventually permeates into the entire range of customers all the way into, you know, a Fortune 50. So that is the DNA of how we build product. And changing that is the same as changing the ethos of who the people at Brex are. So literally nothing happens to startups. Nothing happens to startups. Well, actually, more investment, more aggressively, 50 % growth on the team, a lot more sort of marketing growth dollars. But the biggest thing is the product investments in AI are accelerating at a clip that we think would take us probably two to three years.

43:55And it's going to happen now. So that would be really exciting. Okay. Just say that one more time in the camera, please. Okay. Nothing's happening to startups. We're just doubling down, accelerating growth by 50 % next year on the team. A lot more dollars go into product development. And we're accelerating our AI roadmap by two to three years compared to what we do as a standalone company. Sponsored by Brex. Some of you may not have heard this yet, but our sponsor Public just launched something called Generated Assets, and it brings AI into investing in a way I've honestly never seen before. Here's how it works.

44:28You type in an idea like AI-powered supply chain companies with positive free cash flow, or defense tech companies growing revenue over 25 % year over year. Public's AI then dispatches a swarm of agents that scan every single U.S. stock, evaluates them, and instantly builds a custom index around your thesis. What really stands out is how clearly it explains why each stock is included. And before you invest, you can even backtest your idea against the S &P 500. So you're making decisions with real context, not just guessing. And beyond generated assets, Public lets you invest in stocks, bonds, options, crypto, all in one place.

45:03They'll even give you an uncapped 1 % match when you transfer your investments over from another platform. If you want to build a portfolio that actually reflects your thesis, visit public.com slash sorcery. paid for by public investing. Full disclosures in the description. Since startups are just going to be thriving and accelerating, what else is going to happen? So I want to go a little bit deeper into AI because Brex has been on a tear with AI. You had released six agents and you had a really big fall release. So for people who don't know, can you lay out how Brex is taking on AI? Yeah. So phase one of Brex was building great financial services like card, bank accounts, etc.

45:49Phase two was saying, let's go and build software that makes those financial services much smarter and more automated. So we build expense management, we build accounts payable, we build accounting with a lot of these automation and sort of software to help customers manage what's happening in their card and bank accounts. And really the phase three of BREX is when you think about the labor, right? When you think about the actual work the finance teams are doing on top of BREX. And the way we characterize this last phase is what we call the inversion of control, where before you were doing the work as a human and sort of recording it on BREX and sort of entering the data on BREX.

46:30And BREX was a system of record. And really what we see in this phase three is actually the opposite. it is. Brax is doing the majority of the work, and then you are managing by exception. And what we fundamentally see happening is every single area of a financing will have a very high degree of automation done by agents. And then the question becomes, who's going to do that, right? Because you have effectively three possibilities. You have existing incumbents in the finance space, like the ERP companies, for example. I don't think they're going to go do that. Then you have like new startups, sort of folks out of YC that could be building something new in the space.

47:12And that is a possibility. But at the end of the day, we think there's a very unique property in building the money movement, software and the automation in one company. So we think there's a structural advantage of doing these things together, especially when you think about doing it at a global scale and doing it at a very large scale. And then I would say when you sort of zoom out and you look into the third possibility is companies like Brex that touch like every single expense in a company, every single dollar of money that goes out of a company passes through us in some way. And really the interesting thing is like, for example, like one of the things that we build is we have this audit agent.

47:53And really what it does is it goes through every single expense in the company against your expense policy and what we call like an audit policy and annotates violations. And it does it in a way that is much more complex than saying, well, is there a memo here or is there a receipt here? What it does is interpreting and understanding context that is much broader than one transaction. So it says, well, you know, this person on the sales team is traveling for a customer, you know, trip and they're going on this dinner with X number of people. Is this expense appropriate or not? and think about the number of variables that you have to compute to determine that, right?

48:33It's like, okay, who is this client? Who is the sales rep? Which level are they in? Are they hitting quota or not? You know, are they with their teams or not? Because that changes how many dollars you're paying per person on that meal. What is the relevance of that customer? And when you start to add in all that context into the Brex platform, you start to get to a really powerful place, which is Brex starts to have much more agency over the entire arc of a financial decision, right? Because back in the day, you know, Brexit used to be just the moment you go spend and swipe the card is where Brexit was involved.

49:08And now, you know, we know so much more about so much more data that exists about an employee, a transaction, an expense. And the benefit of that is you can fundamentally change the way a company makes decisions in a very material way. Because the thing about finance teams is, they're responsible for 100 % of the span in the company, right? If you're overspend, you go fire your CFO. But then at the same time, they only make 5 % of the decisions. So the question becomes 95 % of the decisions are made all over the company. It's people just going on trips, signing contracts, paying for vendors, going to marketing events and hosting customers and all that.

49:49So then the question becomes, how do you bring in effectively a mini CFO and the decision-making that a great finance person would have and that level of judgment and agency into every financial decision. And that is the opportunity with AI. And you see this happening in every facet of finance, right? You see this happening on, of course, all the expense management side. You also see it happening on procurement. You see it happening on accounting. You see it happening on travel, right? So really the strategy for us is what happens when you change Brex into agentic mode and every surface of the product starts to be an agent and starts to collaborate in ways to get more complex tasks done across entire servers of Brex.

50:33And we're now at a phase that, we launched this big fall release three or four months ago. And I was at a point that, I was talking to a CFO of a very big AI lab that is becoming a Brex customer now. And this person was telling me that the thing that we build, the degree of automation and the quality of the automation is not only light years away of competitors, but also to a point that they can actually now start to change the way they allocate head down internally because it's better than what a human was doing. And I think once you cross that threshold of saying, you know, the quality is higher enough that you're displacing labor in a company, that is the bar for us.

51:15And that is what we're trying to do. And not just for an SMB customer like some of our competitors do, but for a very large, very complex enterprise use case. And we think this is going to accelerate tremendously of AI. So we think it's a generational opportunity, very critical to be in the position that we're in with the level of scale, having access to the entire financial infrastructure to actually control the money movement and change where money is going. And doing this not just for a startup and a small customer, but making sure that that same solution works for a very large enterprise customer because that's the only way of actually displacing labor and automating it to a point that you say, you actually don't need to hire that person in the first place.

52:00And that's actually how the entire strategy of Rex fits together because we say, look, yes, we're serving the enterprise customers. You understand where ultimately your company will become and get to. But when you start from where you are today, you can point to and say, I can run a business the size of DoorDash or Coinbase or Palantir or Zoom or Arm or Anthropic or Intel because these companies run on Brex. And when you start the right way and we graduate you into all the levels of automation you need, we can get to this vision that we have, which is like, how do you make a financing of one person?

52:36And we think that's a really compelling thing for the future of business. I'm getting fire today. Exactly. Do you have a steak? I think we have one coming. Great. Do you know that Fogo de Chao means fire of the ground 100 okay i'm brazilian i know i'm just checking your brazilian portuguese exactly exactly that's how they do steaks there in the south of brazil at least in the south of brazil in the ground yeah they they put like these they do these like basically fire pits and then you just put the steak on the ground um and you rotate it and it cooks beautifully well we have a surprise for you we made a pit outside love it we have steaks great cooking in the pit i'll help i'll eat so okay so one of my favorite questions in every single interview is my brex question did you believe that so i always frame this because rex is all about performance spending smarter moving faster the intelligent as fuck i'm sorry intelligent agentic finance platform.

53:44So core component that I believe with performance is all about who you surround yourself with or who 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? Yeah, I would say I think there are sort of two buckets, right? There's the, you know, the sort of aspirational folks that, 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. I think for me, the people that I think are pretty tremendous at this, Steve Jobs for me is a very clear one of transcending where technology ends and where our human connection starts.

54:33I think that's a very special combo. I would say the second one is, I'm a big fan of Charlie Munger. I think he has this very visceral way of understanding and sort of exploiting reality. And it was very useful. A lot of the mental models that he has over the past two and a half years at Brex. And, you know, I think there's a lot of companies that I admire. I mean, I think, you know, Brian from Airbnb is fantastic. Tony from DoorDash. I learned a lot from a lot of these folks. but when I think into sort of who are the people that I actually spend a lot of time with day to day that were incredibly inspiring I would say Victor Lozarty who was a benchmark and now is running and crushing his own fund he's been on my board since day one he was one of our first early investors he's Brazilian lives here in Silicon Valley and he's phenomenal and incredibly helpful thinking through every single outcome every single situation Neil Mattar, Green Oaks, fantastic.

55:36Saurabh from DST, also fantastic. Both incredible at articulating where the company is, where the world is, where we want to go. And Mickey from Rivet, of course, has been on our board since day one, also tremendous. So I would say I think there's a range of folks that have just seen the movie a lot and can help you understand with clarity where you're going. And I think the, you know, for example, there's a lot of folks that you spend time, especially folks that are maybe a little bit ahead of you in your journey that are incredibly inspiring. So, you know, Neil invited me to be on the board of Coupang in Korea, which is, you know, basically the Amazon of South Korea.

56:21And Bam, the founder, is insanely smart, one of the best operators I've ever met. And when you spend time with someone like that, you realize what does it mean to be an excellent operator? Because, you know, one thing is to sort of hear about it and read about it. And the other thing is you see it in front of you. Right. And some things you have to feel it to understand what they mean. And spending time with BOM and the Kupang team was a very similar experience for me of just understanding what true greatness looks like. Pedro, you're 29. You just had a$5 billion exit. What are you most looking forward to in the next five years?

57:01I think to me, it's just, I think to me, I would say three things. Number one is getting Brex to be honestly just the biggest platform you can ever be and sort of living up to the full potential of this idea, which, you know, we created this category nine years ago. And I think we're just barely scratching the surface with, you know, maybe one, one and a half percent of the U.S. market. So that's number one. Uh, number two is I got married, uh, you know, last year, uh, you know, excited about starting a family, you know, which is, you know, coming over the next few years for sure. Uh, that's a big goal.

57:42Um, and then number three is, is, you know, I would say really think about, you know, beyond where Brexit today, uh, what, what can we actually do inside someone like Capital One? because I think it's very unique to have this level of access and resources and honestly just trust from such a massive institution. And I'm really excited to learn a lot there. You know, I'm spending a lot of time with Rich and the team and, you know, every minute I can get with them, I just learn more. And, you know, I think it's a pretty fascinating experience to be inside a Fortune 50 company. you know, sixth largest bank in the U.S.

58:28and learn as much as you can and use that to compound Brex and, you know, build more things together. So I think it'll be really exciting. Is it true that Rich Fairbank is a fair, rich banker? That is technically true, I think. So, yeah. Glad we cleared the record on that. Okay, so as we wrap up, I have a couple of quick questions from X. founders ship faster on deal set up payroll for any country in minutes hire anyone anywhere get visas handled fast and get back to building visit deel.com slash sorcery that's deel.com slash s-o-u-r-c-e-r-y go for it these questions are from nicole wishoff she asks how long were you building a relationship with cap one um we folks in our board uh someone in our board knew them for probably two or three years directly.

59:25I would say indirectly, I would say there was mutual appreciation and sort of respect for probably four or five years. And for sure, when we understood how we both build things from the bottom of the stack up, there was a huge bonding thing for all of us because it's very different in any other fintech company in the world. And they've done it a lot. and but you know after spending a lot of time with them probably the last last a couple of months i would say another question from the cool wish off what are the trade-offs of mna now versus ipo later 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?

1:00:14But the reality is like public markets require a story that continues to compound over a very long arc. And, you know, our business is compounding at 40, 50%. 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 there's things that affect the perception of your business and where you trade that are completely outside of your control. So I think for us, it was a question of like, one, first, this was an incredible outcome. So it was hard to compare it to an IPO in many ways.

1:00:59And 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 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 over the past few years. But, you know, the stock's trading 70 % down. And I think that is psychologically very different and very hard for the team. So that's how we thought about it. And ultimately, you know, we didn't have to make the decision because this was such a good outcome, but that's how we would probably think about it.

1:01:36This is a good follow-up question to that. This is from Trace Cohen. He wants to know, how did you do the recap and RSUs to$4 billion years ago? And how did that really help all employees? Yeah. So before we were issuing RSUs at$12 billion in 2021. And then in 2023, we actually said, let's reprice the equity at four. And we did something that's pretty unusual. We switched from RSUs into options. And the strike price was low on those options. So that was beneficial for employees because, you know, not only they could exercise it, but it was something that actually made it worth restriking a lot of RSUs into options as part of that.

1:02:16And I would say the big thing for us was, again, how do we create the conditions where folks believe in the value of the equity and can have upside from here? And I think a lot of the times CEOs and founders forget that the price of your equity means a lot. There's a lot of psychology. There's a lot of expectations. There's a lot of things that come with it. And we wanted to set it at a price that we felt comfortable that would be upside from it, which, you know, of course, nothing serialized. But I would say it was a hard thing to get, you know, everybody comfortable because it was very dilutive.

1:02:53But ultimately the right thing because we got all of our teams to be excited about staying and compounding from there. This question is from Stuart Blitz. did anyone say what's in your wallet during negotiation 100 a very funny story is uh we when we're doing going through diligence uh very early uh i went online and signed up for a capital one card uh and then i got a spark spark uh card and uh and i had all my notes of like everything that i would do differently in the flow and all my feedback and all that and of course they had it on ours but uh it was funny there's like uh one of their their i think their board decks has like a photo of me of a Capital One card holding it and being like, you know, I signed up, here's the card.

1:03:35And, you know, there's a funny thing on sort of reverse due diligence. But I absolutely, you know, I have Brax. I use Brax for everything today, but I'll use soon Brax and Capital One for my personal stuff. Love that. This one's from Alex Cohen. Did you have any other offers? No. The company wasn't for sale. I mean, we're just, it was very unique. Like, you know, being founded by a company and giving us latitude and autonomy to continue to execute the trajectory that we're in. It's pretty unique and not how most M &A happens. So I would say it was it was a we never thought of selling the company.

1:04:17And we we we did it because we thought it was fundamentally different than any other combination and also fundamentally different from being independent from a scale perspective. So that was pretty exciting. Close out. This is the most difficult question I'm going to ask you today. This question is from Omnicorp. Are you happy? Very happy. Very happy. Look, I think I think at the end of the day, I'm not gonna lie. The last two and a half years were really hard. There was a lot of a lot of uncertainty, really high attrition. Like reaccelerating growth is really hard. 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 so it took a lot from me and the team 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 took a lot But so I think the outcome is, of course, really exciting for everyone.

1:05:24And we're really excited to build this part of Capital One. 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 there's a thing which is saying, well, the numbers are better, the metrics are better, and the customers are happier, and 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.

1:05:58And by the way, here's what we're going to go build now with this new thing. And and that was really gratifying to be able to say, you know, all this energy, all this intensity was worth it. And I think it just proves that doing hard things is, you know, there's a lot of meaning behind it. And I think, you know, the outcome could have been different. But, you know, at the end of the day, it's like 50 % of the battle is in your own head. It's just do you keep going? Do you keep compounding? And I just had a fundamental belief that Brex could be a lot better than what it was two and a half years ago.

1:06:35And when you look back and you say, gosh, we're a very different company versus two and a half years ago, that is incredibly rewarding. And you're not even 30. 29. Exactly. That's great. Any last thoughts? Anything you want to say to the world? You know, the world's very complicated. And people try to fit things into mental models that previously exist. Because that gives you a sense of predictability over how things will unfold. and the more time I spend with Rich, the Capital One team and our team at Brex, the more I see that the mental model of an exit is wrong for this deal. So, you know, time will prove the things that we're building and the scale that this thing is going to get to and the quality of the product, the amount of R &D investment we're doing and go to market, of course.

1:07:29But the mental model of an exit is wrong. The right mental model is like, this is a growth. This is a growth deal. And this is a growth, like to some degree, combination. This feels much more like a merger than an acquisition, even though the skills are very different. So, you know, world, watch out. We're coming and we're just getting started. Can you remind me again, how much is that marketing budget? $6 billion. Perfect. Amazing. Thank you so much, Pedro. This was so much fun and congratulations. Thanks for having me. I appreciate it.