Startups are NOT a typical small business, and a funded startup's credit card needs are very different from a traditional SMB. As finance and accounting advisors to hundreds of startups that have raised billions in venture capital funding, we know what to startups should look for in a credit card - and it's not the same as a "traditional" SMB's card.
We recommend funded startups use Brex - because of the startup-centric rewards, generous spending limits, and the lack of a personal guarantee. Brex is now offering companies that sign up through Kruze 50,000 reward points - basically a $500 value! Check out Brex now.
Founded in: 2017
Total Funding: $282.1m
Ideal for: Funded founders
Founded in: 1983
Capital Base: $60b assets
Ideal for: SVB Clients
Founded in: 1850
Capital Base: $175.9b assets
Ideal for: Traveling SMB owners
Most early-stage companies be using one of the founder's credit cards. This may make sense at first, but pretty quickly the types of companies that we work with - ones that raise seed or venture capital funding - outgrow the credit limit (and other features) of someone's personal card.
First, if you are a venture backed (or soon to be VC backed) company, look for cards specifically made for businesses with funding. Most small business cards are going to have features designed to give rewards and benefits to the individual holding the card, not to the company. Secondly, the credit limit AND the spending are going to be tied to the individual, not the company. This becomes a serious problem when an early-stage, funded company starts putting big ticket items on plastic like server bills, travel or online advertising. You don't want AWS shutting down because you reached your personal spending limit. And the personal guarantee is not a smart idea - if the company fails, you as the individual will be held responsible for all of the debt.
Regardless of whether or not your company is raising venture funding, you need to get a business credit card - not a personal one. Seperate your personal from your business expenses ASAP!
It's natural that a small business founder who owns 100% of their business would expect to get personal travel rewards. But venture backed companies should be focused on choosing a credit card that have rewards that help the startup reduce burn. At the moment, we really like Brex's rewards - you earn 7x on ride sharing (the average company in our dataset spent approximately $5,500 per year on ridesharing!), 4x on travel and 2x on software like Salesforce.
We've seen companies using a personal card that have to pay off their balance every few days to keep their Google Cloud servers running! This is a waste of time, and it's stressful. Choose a plastic provider that “gets” startups enough to base your spending limit on the amount of capital in your bank account. Right now Brex, and soon Stripe's new offering, will do this.
Founders - don't take on personal liability for your company's debt. Sure, traditional SMB owners have to do this. But you raised venture funding to not have to worry about losing your house if the company goes under (and other reasons too, of course!) Avoid personal liability by going with Brex or the SVB Innovators Card, or maybe the new Stripe card when it comes out. American Express has also announced a new "Corporate Card for Startups" - it's not out yet. You can see our comparison of the Amex vs Brex card here, and we'll update this once we get some reviews from our CEOs.
Look for a provider with cleanly presented statements, modern online UX and a search feature. Really importantly, the best credit cards sync with QuickBooks for simple bookkeeping. You also want a card that scales with your finance operations, such as providing for departments or the ability to tie back spend on particular cards to particular accounts.
If you start a traditional small business, you probably don't hire anywhere nearly as quickly as a funded startup will. When your team grows fast, it becomes very challenging to manage spend if everyone is using their own debit cards and submitting expense reports. But you want the team to spend, because advertising, new equipment, office supplies, etc. are necessary for growth.
You want a provider with an online interface where you can easily adjust spending limits and control your team’s spending. We recommend Brex.
When it comes to credit cards for your startup, there's a lot to consider. As startup finance experts, we at Kruze consulting may have gone a little overboard in our analysis.
Check out this comparison chart reviewing Brex, amex, and SVB -- the three best credit cards for startup founders!
|Built for Funded Startups||Yes||Yes||No||No|
|Rewards / Cash Back||Startup Focused||Startup Focused||Personal Travel Rewards||Personal Travel Rewards|
|QuickBooks Online Sync||Yes||Yes||Yes||Yes|
|Annual Fee||$0||$0||$125 per card||$95 per card|
|Ability to Carry Balance||No||No||Yes||Yes|
|Control Team Spending||Yes||No||No||No|
|Sign up||Sign up||Sign up||Sign up|
Cash back or Rewards
Traditional small business owners are usually trying to get travel points with their credit card. Venture funded founders have bigger stuff to worry about, and the right credit card will provide rewards that help the startup cut its burn rate. Brex and SVB's Innovators Card pool all of the company's points, and these can be used to pay off the card balance (basically, a cash back reward) or to cover other standard startup expenses.
Run of the mill SMB credit cards companies will typically do a credit check on the founder applying for the card, which means you'll get a very low credit limit. A fast-growing, funded startup needs a higher spending limit - don't risk your AWS getting turned off or your trade show exhibit getting rejected because you hit a low limit. Go with a provider that “gets” startups enough to base the limit on your funding!
If you are the founder of a funded business, you should NOT be taking on personal liability for the company's credit card balance. When a startup is going under, or can't raise the next round, the founder is already likely liable for the company's payroll liability. Don't add on the additional personal liability of the company's credit card as well. Avoid personal liability by going with Brex or the SVB Innovators Card.
The best startup credit cards make accounting easy. Look for a provider with cleanly presented statements, modern online UX and a search feature. The best online statements update frequently, so you can understand the balance everyday - and once companies get bigger, they usually want to do their books on a weekly basis, so this becomes even more important. Finally, a good card syncs with QuickBooks, Expensify so you don't have to deal with manual data entry.
Headcount grows quickly at funded companies - and they will want to spend money. The best startup credit cards let you limit how much individuals or teams can purchase. You want a provider with an online interface where you can easily adjust spending limits and control your team's spending. We recommend Brex for this feature.
APR Doesn't Matter
Startups that have raised legit seed and venture funding just pay the bill every month. You don't want to hold a balance, so this doesn't matter. If card provider tries to sell you on the importance of APR, they aren't understand what a startup founder is trying to accomplish. If you are a traditional SMB, then this might be your main source of financing. But for a funded company, the credit card APR doesn't matter - pay your credit card bill every month, like responsible founder.
We only work with funded, early-stage companies, so we know what your accounting systems and credit cards need to be capable of to support rapid growth. Many founders struggle with tools designed for consumers or massive enterprises - finding just right product or service for an early-stage company can be hard.
Thankfully, we've taken our experience working with hundreds of funded companies and summarized it for you here.
And if your startup needs professional finance and accounting help, reach out to us!
Brex is by far the best card for a funded startup. Brex has an amazing rewards program for funded companies - you company earns points for all of the company’s spending, and these points are big for typical startup expenses like ridesharing (7x points), travel (4x points) and more. Plus, Brex gets funded businesses enough to base the spending limit on a company’s funding, and doesn’t require the founder to take on a personal guarantee.
SVB is one of the top banking providers to funded technology companies, and they have recently launched a “Brex killer” card. The SVB Innovators card is a strong card for startups, especially for companies that already have their bank account with SVB. Integrations with QuickBooks and Expensify make bookkeeping easier, and good early-stage centric rewards (get money back on your Amazon purchases). Plus, founders take on no personal liability.
SVB Innovators Card Pros
SVB Innovators Card Cons
Marriott Bonvoy Business American Express Card is designed for small businesses, and is used by a measurable number of our funded CEOs for their startups. It offers very strong rewards for spending at Marriott hotels - 6x reward points. Plus, it gets the founder elite status at Marriott hotels, which could be very important for the founder of a B2B company who is always on the road closing sales. Founders likely use this card because they like to stay at Marriotts, and want to get the travel rewards for their family to use on vacation. It is possible to sync the Amex Bonvoy with QuickBooks and Expensify, so bookkeeping is easier and faster. Founders who choose the Amex Bonvoy are going to be taking on personal liability for the card, and are going to encounter a frustratingly low credit limit for a high-growth, funded company (because the limit is based on the founder’s credit score).
Amex Bonvoy Pros
Amex Bonvoy Cons
Stripe's corporate card is available to companies already using the Stripe platform. In particular, if your early-stage company is already using Stripe, they can use your history as a basis for your limit. Plus the you'll get 2% cash back on the categories your company uses most each month - and that's automatically calculated, so you always get the best deal.
Stripe Card Pros
Stripe Card Cons
Expensify recently came out with a new offering that ties neatly with their existing corporate expense management software/service. It makes it easier to set up spending limits, get approvals and ensure spending compliance, and collet receipts. It's a no-fee product. Since many Expensify users already configure daily payments, the card balance can be configured to be paid off on a daily basis. We don't think the founder needs to carry a personal guarantee, but it's not 100% clear.
American Express has finally responded to the market share loss being taken by Brex and the other new startup-focused credit cards. The new Corporate Program for Startups by Amex takes some of the best features of Brex and combines them with some of American Express’ best rewards. The Corporate Program for Startups by Amex has no personal liability, protecting the founders, plus provides flexible rewards that can accrue to the company or to the employees. It’s only available through invitation - ask your Kruze account manager for an introduction.
Amex - Corp Card for Startups Pros
Amex - Corp Card for Startups Cons
A lot like Expensify, Ramp combines a corporate card with expense management tools like expense report creation and analysis, personal reimbursement and expense policy creation. Ramp is strongest for Series A to Series C companies who are dealing with the rapid increase in the number of people paying for software, travel, etc.
The Chase Sapphire is really a personal credit card, and we are always surprised by the number of startups that use it. Chase Sapphire’s popularity is probably because many founders simply start using their own personal card for their business, and because they want to earn travel points for themselves. It does have some pretty generous rewards for the founder, with the Sapphire Preferred giving 2x points on travel and restaurants, and 1 point for each $1 spent on other categories. However, it’s not really business tool, and a Chase Sapphire card is going to rely on the founder for the credit limit (so it will be too low for fast growing, funded companies). And the founder takes on the personal guarantee. (We are only including the Chase Preferred in this list because we see so many founders use it for business purposes - Chase does have a better business card, the Chase Ink.)
Chase Sapphire Pros
Chase Sapphire Cons
Unlike the Chase Sapphire, which is really a consumer card, the Chase Ink line of credit cards is for businesses. Chase offers several versions, including a Chase Ink Business Limited, a Chase Ink Business Cash and Chase Ink Business Preferred. With the Chase Ink cards, early-stage company founders get cash back OR points, depending on the card they pick. The Chase Ink Business Unlimited and Chase Ink Business Cash cards have no annual fee, but there is a low, $95 per year annual fee with the Chase Ink Business Preferred. You also get $500 cash back on the first 2 Chase Ink cards, and the 3rd gives you bonus miles, after you hit the minimum spending amount in the first 3 months.
Chase Ink Pros
Chase Ink Cons
CEO and Founder of Kruze Consulting
With the launch of the new Stripe Card for business, the Expensify card and the American Express Corporate Card for startups, company credit cards are in the spotlight. Despite this new attention, there’s been a long-raging technology war in the space led by Brex. According to new Kruze Consulting data, Brex has been consistently gaining market share against industry leaders, American Express and Silicon Valley Bank. The reason for this rapid growth is due largely in part to two key factors that Brex has pioneered.
Firstly, Brex figured out how to not force the startup founder to have a personal guarantee against the card’s balance, and figured out how to set a credit limit based on the startup’s funding and performance. Secondly, less talked about but even more compelling to startup CFOs like Kruze, Brex offers amazing expense management tools that make it easy for companies to better understand and optimize how they spend money. In our study of 200 venture-funded startups’ credit card usage, we found that companies’ meals, travel and office expenses dropped, on average, more than $250 a month per employee by switching to Brex! That’s huge savings and it’s due in large part to the technology Brex has built with startup founders in mind. The graph below indicates pretty clearly how this has worked out for Brex recently.
Based on the data, the announcements from Stripe and Expensify make a ton of sense. They’re already tech companies that work with thousands of startups, so it’s not surprising they’d leverage that pipeline for a credit offering. The market share Brex was able to gain against legacy market leaders, Amex and SVB, no doubt signalled the opportunity for disruption to Stripe and Expensify. Brex won most of that market share using technology tools and their willingness to forgo a personal credit commitment. Undoubtedly confident in their ability to replicate and compete with these tech tools, Stripe and Expensify both have unique approaches to the market. That said, American Express has expressed its willingness to invest in the technologies needed to compete.
Leveraging the significant amount of customers they have on the payments side, Stripe Capital offers loan amounts and repayments based on the holders Stripe transaction activity itself. Taking a lesson from the Brex book, Stripe has enabled account managers to set specific limits and block specific spending categories. There’s also real-time expense reporting through text message and integrations with leading financial software like QuickBooks and Expensify. There’s no doubt that customers who already use Stripe for payments will benefit from having a fully integrated solution like this, but startups collecting payments in other ways may not be able to realize all the benefits of the Stripe Capital card.
Coming full-circle, former credit card company turned expense management software, Expensify, has also created a corporate credit card offering to compete in the vacuum that Brex has opened. Like Brex, the card is free and has no fees, interest, commitments, or personal guarantees. However, unlike both Brex and Stripe, Expensify’s card works in sync with the Expensify platform allowing all transactions to be input automatically - completing expense reports in real-time. Admins even get a daily snapshot of the company’s expenses, so they can keep always stay up to speed. The constant reconciliation between Expensify and other accounting systems is by far the best feature for companies to have a daily picture of their financials. Expensify also boasts exclusive deals with Amazon Web Services, Stripe, Bill.com, Gusto and more.
The incumbents have noticed, with both Silicon Valley Bank and American Express announcing “Brex competitors.” The Kruze team has not seen any of these cards in action yet (American Express just announced their card this week) and both Stripe and Expensify have yet to come to officially to market, so it’s unclear how these will perform against the startup competitors. The one thing that’s certain is that this race is being driven by technology, the value of which has Brex clearly demonstrated. As this technological race heats up, services are becoming increasingly more integrated - saving startups time, effort and money. These companies can only expect greater efficiencies and value to be unlocked as some of the most creative minds compete to provide them better and better offerings.
There’s no doubt the competition in the corporate credit card space is heating up to the benefit of startup Founders. At Kruze we work with hundreds of venture-funded startups, so we see a wide array of company needs, dynamics and trends. It’s still early, but so far we are still recommending Brex to a majority of our clients. They’re the proven market leader for startups and the new competitors on the scene, while interesting, have yet to prove themselves in the market. There’s no doubt that Stripe payments users have a great deal to gain from the Stripe Capital card, as do Expensify users with the Expensify card. That said, Brex currently offers extremely good integrations with most digital platforms, so the difference to be seen between the cards has yet to be proven against what Brex has already built.
Kruze Consulting COO
And as a business owner or founder of a startup, you should really care about making the accounting easy because that saves you a ton of money on your accounting. The easier the accounting is, the less your accountant has to charge. I know this from experience because that's what we do at Kruze Consulting. So the right credit card is really important because it can get all the data, all the transactional data like vendor, date, payment amount, even transaction description into QuickBooks so much easier. Getting that nice clean bank feed or good credit card feed into QuickBooks saves your accountant a ton of time.
Now especially to us because we have set up and built a bunch of automations that plug into QuickBooks that recognize transactions automatically. So we're able to do about 70% of the transactions automatically now, which means a human accountant is not touching those transactions, which again saves you a lot of time and money. And we aren’t the only outsourced accounting service to have done this. But we can only do that with some of the credit cards out there because some of them are on super antiquated systems and do not have clean bank feeds and are always needing to be reconnected into QuickBooks.
The other important thing for a credit card to make your accountant's life easier is that they have easy read-only access and log in access in their portal. I can not tell you how many times we have been locked out of American Express. It happens constantly. And if I feel really bad about it, because I have to call and email the founders and say, "Guess what? We're locked out of American Express again." And it makes us look stupid, but really it's American Express or this happens with other credit card portals where we're getting locked out through no fault of our own. They're just built on bad technology, really kind of like 1980s, 1990 stuff, and are not built for portal access and multi-tenant access for like companies like us that serve hundreds of startups. They think you have one accountant for one company. That's how their systems are built. It's also why we love some of the newer credit card systems.
So we love Brex. That is probably our favorite. They make the integration with QuickBooks super easy. Our transaction automation runs on top of Brex very nicely. And even Brex has some of their own automation built into the connection with QuickBooks. So that's really nice. Stripe has come a long way with their credit card offering and they continue to get better.
In fact, we give them a lot of feedback on that. And Expensify has come out with their virtual credit card, which is really nice. So those are three that will really help solve problems for your accountants, which in turn makes your life as a founder easier. And by saving money that allows you to hire another engineer or another salesperson, maybe not pay for the whole salary of that person. 'Cause that would be a really huge saving. But every dollar counts in startups.
And so having a really good credit card that syncs nicely with QuickBooks that plays nicely with our automation, that recognizes transactions and labels them automatically is really important, and has a good portal that can handle accountants who have hundreds of clients and not lock us out constantly. All save you time and money and they save us time and money and it keeps everybody happy. I hope that helps.
Kruze Consulting COO
Note: Unfortunately Brex discontinued this offering in mid 2020. Hopefully they will start it again, as it was the best offering for eCommerce companies on the market!
eCommerce companies have some very special requirements. They're not your usual startup or bootstrapped company. eCommerce companies are buying a ton of inventory on that credit card. They need a high limit. The higher the limit, the more inventory they can buy at one time. That's helpful to everybody. The other thing they really care about is having a long float, so the best eCommerce credit cards have loooonnngggg float.
Now, float is measured in days. Typically it's a 30 day float, but sometimes you can get 60 day floats. That's really helpful because that means you don't have to pay the balance down in just 30 days; you get an extra month to sell that inventory and get the cash back to pay off the balance. Very, very helpful. Another thing eCommerce companies should care about is having really nice rewards. Unlike many other early-stage companies, eCommerce companies tend to have very high non-personal expenses due to the inventory and online advertising purchases. And so they want to get the rewards that come with that, trips, hotels, airlines, or even cash back. Those can all be very valuable if you're spending a lot of money on your credit card.
Now, something that's not as important for an eCommerce company is employee spending limits. Typically, of course, they're gonna want to have spending limits for some employees. But the vast majority of the credit card spend for an eCommerce company is gonna be on that inventory purchase and some online ad accounts. And so it's kind of a nice to have instead of a must have. At least that's our opinion at Kruze Consulting.
So let's talk about the best credit cards for eCommerce companies. One of the ones we like the most is Brex. And the reason we like Brex is they have a 60 day float for eCommerce companies and their limit is pegged to the total amount of sales the companies do. That range is typically 25 to 50% of sales that are happening in a given month. And the bigger your company and the larger cash balance, obviously the less risky you are, the higher they can go up on that allocation. So an eCommerce company that's just starting out, not a lot of cash in the bank, they're probably gonna have a limit. That's something like 25% of total sales. A big company that's raised a ton of capital and that looks very safe will be something closer to 50% of sales. That range is actually really important. Brex also has good rewards and it works really well with an accounting system (another reason eCommerce accountants like us love them!) So Brex is a really great credit card for eCommerce companies.
Another one we'll look at, is Capital One. Now, Capital One it's not the most fun to work with if you're an accountant. It's really hard to get statements, it's really hard to get integrated into QuickBooks. We don't know why, it's a mystery, but it could be a lot better on that front. However, they do have a very generous cash back rewards program. So a lot of eCommerce companies that use Capital One can get up to 2% cash back. Now, just think about that. A typical eCommerce company, it doesn't have a really high margin. So getting 2% of your total margin back is really, really valuable. Again, it's not the most fun for us to work with, but those rewards cash back are really, really valuable. However, as we’ve already mentioned, they do put personal liability onto the founder in many cases, so that is a possible deal breaker in our opinion.
Stripe has a really good credit card. Now, Stripes perk is that they give you a rebate on the transaction processing that you're running through Stripe. So if you're running revenue or sales through Stripe, you are charged a fee for every credit card and ACH that you run through Stripe. Stripe's big perk is they actually just rebate you a big percentage of that transaction spend. Now, there's some limits on that. They only go so high and the rebates only for so long, but it's a really nice perk, especially if you're just getting started.
Another credit card to look out for is Amex and Chase, really two credit cards. And I put them together because they're kind of the old guard and they're definitely trying to make improvements to their infrastructure. Amex in particular has made some major strides with the American Express Innovators Card, which my team reviews above. Historically, it's been okay, not great, but Amex and Chase historically had very nice rewards. They partner with a lot of travel, hotel and airline companies. So those are some to look at. Again, there's other credit cards we prefer more than those, but if you're really focused on hotel and airline points, then those are the two best ones.
And then SVB Silicon Valley Bank. They've made a lot of big improvements in their credit card program. They've invested a significant amount of money in their customer service. We've noticed it's getting a lot better and they're taking it very seriously now. I think prior, it's kind of a forgotten business unit inside of SVB, or at least that's how it was treated and acted. And we used to have a really hard time getting through to support and getting it hooked up into QuickBooks. But again, they made a lot of investments. It's gotten a lot better and that's definitely a credit card that eCommerce companies should be looking at.
So again, to recap, eCommerce companies have some very special needs. They need a long float, they need a high limit and they really care about the rewards. So we've just gone through the best credit cards for eCommerce companies.