The Hyper-Growth of Brex with Co-Founder and CEO, Henrique Dubugras

In IVP's Hyper-Growth Podcast series, IVP investors talk with CEOs from the fastest growing companies to understand the ins and outs of company building in the hyper-growth environment.

In our sixth episode, IVP investor Parsa Saljoughian speaks with Henrique Dubugras, Co-Founder and CEO of Brex, the smartest corporate card in the room. Today, Brex announced a $100 million investment round and now with $315 million in funding, Brex aims to rebuild B2B financial products, starting first with a corporate card for startups and now for e-commerce businesses. By building its products from scratch, Brex is reimagining traditional underwriting models and provides its corporate cards in a modern, data-driven, and consumer-friendly way.

Henrique summarizes what differentiates his company's business from traditional credit card issuers. First, underwriting, which allows Brex to issue cards quickly to companies, with higher limits, and no personal guarantees. Second, Brex's technology stack, which is built from the ground up and allows for a seamless and scalable product experience flexible to a company's needs.

Henrique's advice to entrepreneurs? Use your hard-earned advantages, be selective when hiring, and always play to the company's collective strengths.

More on the lessons from Parsa and Henrique's conversation below and in the full episode here.

EXPLOIT YOUR UNFAIR ADVANTAGE We had an unfair advantage in building Brex because we had built a payments company before.

Henrique and his Co-Founder, Pedro Franceschi, met in Brazil in their mid-teens, then founded online payments company, Pagar.me. This was the beginning of a partnership between the two founders which helped them gain valuable founder- and domain-specific, fin-tech expertise. Ultimately they sold Pagar.me to Stone, a Brazilian payments processor, but not after growing the business to over 100 employees and $1 billion in transaction volume.

Both Henrique and Pedro moved to the US to enroll at Stanford but dropped out during their freshman year to join Y-Combinator. Their startup idea? A VR-business They wanted to do something at the bleeding edge of technology but quickly realized that they had little to no expertise in hardware or VR. Realizing during their YC experience that none of their peers could get a corporate card, they pivoted back to fin-tech to start Brex. Payments and financial services is a passion and their experience from Pagar.me served them well in getting this business off the ground and navigating the complex environment.

KEEP THE BAR HIGH ON RECRUITING [Do not] let the urgency of the hire reduce the quality of people.

The company started with two strategic, yet uncommon hires: a CFO and General Counsel. This was important to help Brex deal with banks and navigate the complex regulatory nature of the industry. These hires came from SoFi and Stripe, respectively, and helped Brex work in an accelerated velocity from day one.

The first ten hires set the tone for a company's culture. For Brex, these hires were a hustle, but under no circumstances would Henrique and Pedro let themselves lower their bar. As the company has scaled, especially post-launch, Brex has benefitted from referrals which have helped make recruiting easier. In just the last year, Brex has hired over 100 people, quadrupling year-over-year. Even with this pace, Henrique has instilled in the culture a high bar on hiring, not letting the urgency of any hires reduce the quality of people. He goes as far as to say that he would rather have fewer high performers that they pay well than more employees who don't meet their performance thresholds.

CHOOSE YOUR BATTLES The toughest thing at our speed of growth is just choosing what fires you are going to let burn.

When asked about his biggest challenge during this hyper-growth phase, Henrique noted that it's about choosing which fires to let burn. When you have a fast-scaling company, there will be many fires. Some will flare up and demand your attention, others build in the background, threatening to spread if they aren't extinguished. But as a founder, if you spend a lot of your time fighting these fires, you might miss opportunities to build your business and become reactive vs proactive. At the same time, if you let fires go on too long, this could be problematic. It becomes important to decide which fires you let burn, and how long you let them burn for. This concept has been discussed in Reid Hoffman's Masters of Scale.

FOCUS ON YOUR STRENGTHS; HIRE FOR YOUR WEAKNESSES As a CEO you should do what you're really great at and hire for everything else.

In high-growth companies, given the pace of progress, it would be difficult, if not impossible, for a CEO to master everything. Henrique suggests that founders focus on what they are best at while building an amazing team around them to master the rest. For Henrique, this means focusing on recruiting, something he considers one of his top skills.

Book Recommendation: In the episode, Henrique refers to 7 Powers: The Foundations of Business Strategy by Hamilton Helmer. This book lays out a clear and insightful framework for thinking about competitive advantages. The 7 Powers include: 1) Scale Economies, 2) Network Economies, 3) Counter-Positioning, 4) Switching Costs, 5) Branding, 6) Cornered Resource, and 7) Process Power.

More from the full conversation in the transcript is below.

To hear more episodes from Lime, MasterClass and more, listen on iTunes or SoundCloud.

TRANSCRIPT Narrator: Welcome to IVP's Hyper-Growth Podcast. In this series, we talk with CEOs of the fastest-growing companies and discuss the ins-and-outs of company building in the hyper-growth environment. If you like what you hear, consider following us on SoundCloud or subscribing to our podcast on iTunes. Tha

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