Capital One just announced it’s acquiring Brex for $5.15 billion. An incredible, top 0.1% “exit” in less than 10 years from a category creator that created massive wealth and opportunities. A huge win.
But also … less than half of Brex’s $12.3 billion valuation from October 2022.
Should anyone care? Many are seeing is a failure vs Ramp, a measured success at best. But … why?
I don’t think most people commenting on this actually understand what they’re reacting to. What they’re really feeling—even if they can’t articulate it—is the consequences of hubristic fundraising.
And we should probably talk about it. Because hubristic fundraising is back. In a big way. It was back big time in 2025 and is back even bigger time in 2026.
First, What Is Hubristic Fundraising?
Let me define it simply: Hubristic fundraising is when you raise at a valuation so aggressive, with terms so favorable, with a narrative so bold, that you are essentially betting the entire future of your company on hitting an extraordinary outcome.
It’s not just “raising a lot of money.” Plenty of companies raise hundreds of millions without hubris.
Hubristic fundraising is when you:
- Take a valuation that requires Top 0.1%+ annual growth for a decade to grow into
- Raise at 100x-500x+ revenue multiple. Often, again and again.
- Build your entire talent acquisition, press strategy, and customer pitch around being “the most valuable” or “fastest-growing”
- Create expectations that anything less than a $20B+ IPO or massive strategic exit is a disappointment
These deals can work out. It will work out for Databricks, Anthropic, etc. But at least as of when I write this, there are so very few $30B+ IPOs or exits. And that’s what Brex was promising. ElevenLabs, Harvey, Replit/Lovable, Cursor etc. are promising even more.
Brex checked all these boxes. In 2021 and 2022, they raised at valuations that implied they would not just win corporate cards and expense management—they would dominate financial services for startups, then enterprises, then… everyone, apparently.
The 2021 Fundraising Environment Was Absolutely Insane. 2025 Was Just as Insane. 2026 Will Be More Insane.
Let’s remember what 2021 looked like.
Zero interest rates. SPACs everywhere. Tiger Global doing deals in 48 hours. Multiples that would make a 1999 VC blush.
Brex raised $300 million at a $12.3 billion valuation in October 2022—technically 2022, but really the tail end of the 2021 madness before rates spiked and everything crashed.
At that valuation, with maybe $200-250M in revenue at the time, Brex was being valued at 50x+ revenue. For a low gross margin corporate card and expense management company. In a market with Ramp, Mercury, Airbase, Navan, and others all competing furiously.
Was that valuation justified by fundamentals? No.
Was it justified by the fundraising environment and competitive dynamics of the moment? Absolutely.
And that’s the trap of hubristic fundraising. In the moment, it feels not just rational but necessary.
The Real Pros of Hubristic Fundraising
Hubristic fundraising works. At least for a while. And sometimes forever.
1. It attracts the best talent.
When you’re the $12 billion company and your competitor is the $3 billion company, who do the Stanford MBAs and Google PMs want to join? The big number wins. The paper gains look better. The press coverage is better. The LinkedIn flex is better.
Brex recruited absolute killers in 2021-2022. Engineers from Stripe. Execs from everywhere. One of the best sales teams ever under Sam Blond. That was partly product and vision—but it was also the massive valuation signaling “this is the winner.”
2. It attracts more capital.
This one is circular but real. Raise at a huge valuation, and suddenly more investors want in. FOMO is the most powerful force in venture capital. The $12.3B valuation wasn’t a barrier to raising more—it was a magnet for investors who wanted to be part of “the next big thing.”
3. It creates customer and partner gravity.
Enterprise customers want to work with winners. When Brex was valued at $12B and their competitor was valued at $2B, which one do more conservative customers feel comfortable signing a multi-year deal with? The big number creates legitimacy. It signals staying power.
4. It generates relentless press coverage and social media attention.
Every funding round becomes news. Every executive hire becomes news. You’re always in the conversation. That awareness compounds.
5. It demoralizes competitors.
When you’re raising at $12B and your competitor just raised at $1.5B, you are sending a message: we are going to outspend you on everything. Sales. Marketing. R&D. Acquisitions. Some competitors will give up. Others will make mistakes trying to keep up.
Ramp didn’t give up. But many others did.
The Real Cons of Hubristic Fundraising
Now for the dark side.
1. You attract mercenaries, not missionaries.
This is the big one. And it’s what I think people are actually reacting to with Brex without realizing it.
When you raise at a hubristic valuation, you attract employees, investors, and partners who are there for the outcome, not the mission. They’re there because they did the math on their equity and saw an IPO at $25B+ and early retirement.
That’s fine when everything is going up and to the right.
But the moment you hit turbulence—and every company hits turbulence—those mercenaries disappear. They have no patience for struggle. They didn’t sign up for hard mode. They signed up for paper gains.
Brex went through brutal layoffs in 2024. Lost 20% of the company. Massive executive turnover. Struggled with burn. Had to do a full “Brex 3.0” turnaround that CEO Pedro Franceschi admirably pulled off.
But where were the fans during that turnaround? Where were all the people celebrating Brex’s dominance in 2021?
Gone. Because they were never fans. They were mercenaries betting on an outcome, not a company.
2. Any stumble becomes a “failure.”
Brex just sold for $5.15 billion. In cash and stock. To a major bank. Creating liquidity for everyone.
Is that a failure?
We’re already seeing this play out in real-time in AI. Look at Windsurf.
Windsurf (formerly Codeium) was one of the hottest AI coding startups. They had $82 million in ARR with enterprise revenue doubling quarterly. OpenAI offered $3 billion to acquire them. When that deal fell apart, Google paid $2.4 billion in a reverse acqui-hire for the CEO, co-founder, and 40 senior staff. Cognition then scooped up the remaining assets—the product, IP, 210 employees, and the entire $82M ARR business—for a reported $250 million.
Total value captured: roughly $2.65 billion.
And yet? The narrative in Silicon Valley was that Windsurf “sold too cheap.” SaaStr literally published “Did Windsurf Sell Too Cheap?” The deal was framed as a cautionary tale, a fire sale, a disappointment.
Think about that. A company with $82 million ARR that didn’t exist three years ago returned $2.65 billion to stakeholders. In any other era, that’s a legendary outcome.
But when Cursor is valued at $29.3 billion? When Lovable hits $6.6 billion with $200 million ARR? Suddenly $2.65 billion for $82 million ARR feels like leaving money on the table.
That’s hubristic fundraising distorting reality. The benchmarks have become so warped that even massive wins feel like losses.
For Ribbit Capital, who led the Series A, this is a monster return. For employees who joined early, this is life-changing money. For the customers using the product, nothing changes except they get the backing of a major financial institution.
But because the peak valuation was $12.3B, the narrative is “Brex failed.” They got acquired at a “steep discount.” They “crashed.”
This is insane. A $5B+ exit is an incredible outcome for any company. But hubristic fundraising creates hubristic expectations. And anything short of those expectations feels like failure—even when it objectively isn’t.
3. It warps your decision-making.
When you’ve raised at $12B, you can’t think about $5B exits. You can’t consider acqui-hires or smaller strategic deals. Every decision has to be oriented around justifying that massive valuation.
This leads to over-expansion, over-hiring, and over-spending. Brex’s $17 million/month burn in Q4 2023 was a direct consequence of trying to grow into a $12B valuation.
4. The bar for “success” becomes impossible.
For Brex to have “succeeded” by the mercenary definition, they probably needed to IPO at $20B+ or get acquired for $15B+. In the fintech market of 2023-2025. With rising rates. With competitors like Ramp breathing down their neck.
That’s an almost impossible bar. And when you don’t clear it, everyone who joined for the outcome—and only the outcome—writes you off.
And Yet, Hubristic Fundraising Is Back—And It’s Even More Insane
Here’s the thing that should concern everyone: we’re doing this again.
And in the Age of AI, we’re doing it at a scale that makes 2021 look quaint.
Look at Ramp. In 2025 alone, they went from $13B to $16B to $22.5B to $32B. Four funding rounds in one year. Nearly tripling their valuation in twelve months.
Is Ramp a great company? Of course. They hit $1B+ in ARR in record time. They’re cash flow positive. They’ve executed brilliantly.
But four rounds in one year? A $32B valuation for an expense management company? This is 2021 fundraising playbook all over again.
Except now, in AI, it’s 2021 on steroids.
The Age of AI Has Made Hubristic Fundraising The New Normal
Let me share some numbers that should make your head spin.
Mira Murati’s Thinking Machines Lab raised $2 billion in a seed round. Not Series A. Not Series B. A seed round. At a $12 billion valuation. Before shipping a product.
The former OpenAI CTO walks out the door and six months later has a company valued higher than Brex just sold for.
And it gets crazier. Bloomberg reported Thinking Machines is now in discussions to raise additional funding at a $50 billion valuation. Even with their CTO having just quit with several other top team members to go back to OpenAI. That would be a 4x markup in less than a year. For a company that just launched its first product in October.
Ilya Sutskever’s Safe Superintelligence raised over $1 billion for his AI safety startup. The former OpenAI Chief Scientist hasn’t shipped anything public yet. But billions? Sure, here you go.
Harvey, the legal AI company, went from $3B to $5B to $8B across three funding rounds in 2025 alone. They raised $760 million in a single year. They 2.7x’d their valuation in ten months. For an AI tool that helps lawyers do due diligence faster.
ElevenLabs went from $1.1B (January 2024) to $3.3B (January 2025) to $6.6B (September 2025). That’s 6x in less than two years. A voice synthesis company is now worth more than Brex sold for.
Lovable, the Swedish “vibe coding” startup, went from $1.8B in July to $6.6B in December. They 3.5x’d in five months. They’re barely a year old.
Cursor went from under $10B to $29.3B in a single year. They raised $2.3B in their Series D. That’s not a funding round—that’s an entire unicorn in a single check.
Brex’s “hubristic” 2021-2022 fundraising looks downright conservative compared to what’s happening now.
We are now regularly seeing what would have been considered absurd even in 2021: billion-dollar seed rounds, valuations that exceed Brex’s exit for companies that haven’t shipped products, and 3-4x markups in less than a year.
Is this driven by real innovation? In many cases, yes. AI is genuinely transformative.
Is this also hubristic? Also yes. The same dynamics apply, just amplified.
These valuations require these companies to not just succeed but to dominate. They require AI to transform every industry exactly as promised, on exactly the timeline investors are betting on. They require no major regulatory setbacks, no compute shortages, no technical plateaus.
And they’re attracting the same mercenaries—talent, capital, and partners who are there for the paper gains, not the mission.
Some of these companies will hit their numbers and the valuations will prove justified. ElevenLabs has real revenue. Harvey has real customers. Cursor has $1B ARR. The AI revolution is real.
But many won’t hit their numbers. And when they don’t—when the inevitable correction comes—we’ll see the same pattern: mercenaries leaving, narratives turning, “failures” that are actually $3-5B exits, founders blamed for outcomes that were structurally locked in the moment they took hubristic valuations.
The difference this time? The numbers are bigger. The falls will be harder. And the schadenfreude will be even more intense.
When Thinking Machines is worth $50B and comes up short of expectations, no one will remember that Mira Murati built something real. They’ll call it a failure because it wasn’t worth $100B.
When Harvey can’t grow into an $8B valuation fast enough, no one will remember they serve half of the top law firms in America. They’ll say legal AI was overhyped.
That’s how hubristic fundraising works. The mercenaries don’t remember the mission. They only remember the paper.
The Siren Call You Can’t Ignore
For many founders, especially in AI, hubristic fundraising isn’t really a choice. It’s a survival imperative at the very top.
The war for AI talent is unlike anything we’ve seen before. Meta is offering $1 billion+ packages to poach researchers. OpenAI is clawing back co-founders from startups that raised $2 billion seed rounds. Google paid $2.4 billion just to acqui-hire 40 people from Windsurf.
If you’re an AI founder and you don’t raise at an aggressive valuation, what happens?
Your competitor raises at $10B. They can now offer engineers equity packages worth $50M on paper. Your $2B valuation offers $10M packages. You lose the talent war before it starts.
Your competitor has $500M in the bank to buy GPUs. You have $50M. You can’t train competitive models. You fall behind on capabilities.
Your competitor’s valuation signals “winner” to enterprise customers. Your valuation signals “risky bet.” You lose deals to perception, not product.
In many cases, it might be almost irresponsible not to take the hubristic path. The founders who stayed disciplined, who raised at “reasonable” valuations, who prioritized sustainable growth—many of them got steamrolled by competitors who didn’t.
So I’m not here to tell founders to avoid hubristic fundraising. In the current AI environment, that might be asking them to bring a knife to a gunfight.
But I am here to say: understand what you’re trading away. And at least pause for a moment, just a moment, before than next round.
Hubristic fundraising narrows your exit options. Not always financially—Brex proved you can still do a “down exit” and create real liquidity. But it narrows what success means for your stakeholders, your employees, your company narrative, and frankly, for your own psychology.
When you raise at $12B, a $5B exit isn’t a win. It’s a disappointment. When you raise at $29B, anything less than a $50B+ IPO feels like failure. When your employees joined expecting a $100B outcome, a $10B exit means they’re doing mental math on what could have been.
The mercenaries don’t just leave when things go badly. They leave when things go less well than the paper said they would.
You can raise hubristically and still build a great company. Brex did. But you need to go in with eyes open about who you’re attracting, what expectations you’re setting, and how the narrative will be written if you come up even a little short.
Because the siren call is seductive. The capital, the talent, the press, the gravity—it all feels like winning. And sometimes it is winning.
But sometimes it’s just setting yourself up for a “failure” that would have been a triumph at any other valuation.
The Lesson From Brex—And For Every AI Founder
Pedro Franceschi and Henrique Dubugras built something real. They went from Stanford dropouts to a $5B+ exit in under 8 years. They served thousands of companies, moved billions of dollars, and built technology that Capital One clearly values.
The “failure” narrative says more about our broken expectations than about Brex.
But there is a lesson here for founders considering hubristic fundraising—especially the AI founders raising at $10B, $20B, $50B valuations right now:
Know who you’re attracting. The capital, talent, and attention that comes with a huge valuation comes with strings attached. Those strings are expectations. And when expectations get too disconnected from reality, you’ll eventually find yourself surrounded by people who were only ever there for the paper.
Missionaries stay through the turnaround. Mercenaries don’t.
Brex survived their turnaround and found a soft landing. Many companies in the next few years won’t be so fortunate.
The question for every founder raising in this frothy AI market—whether you’re building fintech or AI B2B or foundation models—is simple: are you building a company or a casino bet? Are you really, honestly building a $100B generational company? And who exactly is sitting at your table?
Because when the cards turn—and they always turn—you’ll find out fast who was really on your team.
Just ask Brex. They built a real company, executed a real turnaround, and achieved a real exit. And half the internet is calling it a failure because the number wasn’t big enough.
That’s the price of hubristic fundraising. Powerful? Yes. Dangerous? Also yes.
Choose your investors, your employees, and your expectations wisely. The mercenaries won’t be there when you need them most.
