One official calling it the fight of a lifetime. Corporate ventures Data AnalyticsCompany Enters the vc world. We will get the details with their ceo. First, our top story. Facebook has confirmed it will resume collecting and transcribing some user audio clips from its inhome video device portal. I spoke to facebooks Vice President for virtual and augmented reality at the launch of the new generation of portable devices. He oversees hardware and devices and facebook. Take a listen. We are so excited about our new products. We have a 10 inch and eight inch hd screen and they are for most, who love them the and they are designed to look like picture frames. They can fit into anyones home as easily and naturally as if it was a picture frame. It will even show pictures when it is not in use. Taylor and another really cool thing you guys are launching is the tv portal as well. Tell me about that. Portal tv takes advantage of what is already the biggest screen and peoples homes, the tv, and terms it turns into an immersive video calling device. Taylor one thing that struck out to me was the price point, 149. It feels like youre really trying to push into what is already a competitive space. Roku, apple tv, how do you stand out . We think the most important thing that people do is connect with each other. Until now, all these devices were not really focused on that. If they were focused on connecting you with content, which is great, and they are useful, but when it comes to connecting to people that you care the most about, that was missing. With portal, you can use facebook, messenger, whatsapp to connect with the people you care most about in a really rich, immersive way with cameras that follow you around the room and your hands free and you and your kids can connect with your grandparents or your friends without holding the phone and , your arm getting tired and fitting everyone in the shot. Taylor you mentioned cameras. I have to bring up, on the portal, of course, there was the button where you can turn the camera off. Privacy has been a huge concern. Was that the focal point of making sure it was very easy for me to turn the camera on and off . Yes. People have never experienced anything like portal before. It has a camera and microphone. We wanted to make sure everyone felt comfortable and in control of that experience. These generations of portals dont just have control of the camera and microphone, they actually have integrated shutters to cover the camera so you can see that it is not seeing you. Taylor what about the microphones . They have an active light when they are disabled so you know they are disabled and alternatively, you can turn it on if you want to use an assistant like alexa. Hey, portal,y, mi i still being recorded . It sends a sort of voice click to the servers to get an answer back to you. Differs from the default, we might improve the quality over time, but you can disable that on the device itself or facebook activity log. All of privacy data, that, has been a big focal point of facebook. It is now the right time to be launching new products, where there is a camera, where there is a microphone . Right now, there is so much scrutiny and arguably, the least amount of trust in facebook . Now is the best time to launch a product like this. Connecting with those you care about is the essence of what facebook does, and thats what these devices are centered around. Video calling to the people you care the most about. We have taken every precaution we can to make sure people feel comfortable with the devices in their homes and the control they have in those devices. When they have experience of connecting someone they care about who doesnt live nearby, they will experience Something Special for them. It comes at a time when antitrust scrutiny is highest. Looking at big tech, when you think of facebook. Think of the app and software. Is now the time to think about tech, going into your phone and your tv . The smartest category is so new. This is only been on the market for two or three years now. Its really early and Everyone Wants to experiment and see what kind of value we can create. Its not very big yet, but growing yearoveryear. If people decide they are excited about video calling for the home, and i think they will be, i think ordo will be a great fit for them. If it is something not fitting for the marketplace, then we will try other things. Taylor that was facebooks Andrew Bosworth speaking to me earlier. Joining me now to discuss this further is our Bloomberg Technology reporter. Kurt wegner covers facebook. I want to talk about the privacy issues that are going on and the opt out button. It is not opt in. Does that go far enough to quell our concerns about privacy . Reporter i think the big issue we have seen so far with these transcription happenings that have been a big issue with tech is that people just didnt know about it. People were not aware that the audio they were giving these companies was being transcribed at all. I think at the very least, facebook is at least acknowledging this. They made the opt out thing their presentation with the press yesterday. They say that privacy is important, you would think they might make it the default if its how they truly felt. At the same time, at least they are acknowledging it in a way that a few months ago these companies were not doing. Taylor and what do you make of your living, and room, cameras and microphones, when trust in that company is at an alltime low . I asked than this yesterday as well. It seems crazy, right . The timing for facebook to be adding not only a device to your home but one that has a camera and a microphone on it, it doesnt feel like the right time. At the same time, when is going to be the right time for facebook . A year ago, it would not be any better. A year from now, will it be better . I kind of understand why they are pushing forward, because you dont really know when is going to be the right time for that, but certainly more than almost any company, they have been dealing with the privacy issue and there is a trust issue also. Its hard to get into someones living room when people dont trust you. Taylor when we talk about timing, this is a very competitive space. You had comcast make an announcement, facebook, coming Companies Like roku, apple tv. This is very competitive. How does facebook stand to differentiate themselves . They were very clear about this yesterday. The differentiator is the video calls. They think people are going to use portal to do what looks like a face time call on your phone, but this is through their hardware, and in some cases also , through your tv set. They think that that differentiates them from all the others. We asked what about the idea of having netflix or hbo apps on these devices . They said theres a ton of places you can already go to do that stuff. Our differentiator is the video camera. I think it would make sense if they had both. That is what they are leaning into. Taylor speaking of other hardware, its interesting that they have amazons alexa supported on their platform. When would we see facebook come out with a version of amazon alexa or google home . An actual device you can talk to . Reporter you can talk to this one. You can talk through alexa or you can say hey portal. That will make it up for basic commands or request. Those are the things that actually they are collecting and starting to transcribe. The bigger question is, when are they going to have their own assistant . The software that you might say, hey, portal, and they might have software that will actually give you a bunch of different options versus basic demands. Right now, they dont have any plans to remove alexa and build their own thing. Clearly with the software they are Getting Started on that. I would expect, i dont want a timeline on it, but sometime in the future this is a goal for , them to have an assistant that works much more expensively than what they have now. Taylor you and i have joked a little bit, we talked about the monthly active users daily , active users, its hard to talk about hardware because it feels relatively new. Its not a big part of their overall strategy. Where does hardware fit into facebooks total revenue . Reporter it doesnt fit into revenue really at all right now. They dont talk about how many portals they have sold or oculus or other types of hardware that they build. They are an advertising business, for the most part. They see this as a very longterm bit. In years,erhaps perhaps in decades, you might not use your phone in the way you use it now. You might use another type of device. I think they are trying to figure out what the device is going to be. Will it be at a home thing like a portal . Will it be ar glasses . I think when they figure the next wave of hardware comes around, they dont want to be in that dependency, they want to build it themselves. Taylor our coverage on facebook now. As always, that is kurt wegner for Bloomberg Technology. Thank you for joining me. Staff, hesent to his wrote, after 16 years at apple, i decided the time is right for me to step away from our remarkable company. Apples marketing chief is known for leading the secretive culture and directing product features is taking over in the interim. This comes right after apple hosted the annual fall iphone event in cupertino last week. Of course, it does come during a year when another highprofile executive departure at apple has come including former senior Vice President at retail, and the design chief. Coming up, continued fallout for wework after delaying its ipo. We discussed job cuts and faltered Holding Plans in london. Thats next. This is bloomberg. Taylor hours after announcing plans to delay an initial public ing wework made a small , round of job cuts in a new york city unit. This affected fewer than 10 employees. Deals for two london buildings leased to the startup are on the ropes. It is unclear if it has anything to do with the delay of the ipo. Joining me to discuss is an executive director and our Bloomberg Technology ellen hewitt, working tirelessly for us. You. Start with put 10 employees into perspective. Reporter it is definitely a small job cut. 1200rk employees less than in the world. This is something as an indication of ways in which in the next month, as they wait to weworkgo public again, could show ways they can cut back on cost. This is a small unit that ran a retail concept, not close to the main businesses that wework runs, but everyone is watching closely. Taylor is this the type of expense tightening belttightening that you would , want to see from the company . This is a drop in a very vast ocean. As she said, this company employs 12,000 employees. Less than 10 is not going to cut it. The Company Needs to show is a year from now, where is the cash burden going to look like . The company is burning 200 million per month. They have a lot of liabilities. A couple billion dollars they need to pay out every year. These are big numbers. The Company Needs a lot of cash. 10 employees is not going to cut it. Taylor is the bigger issue for you the cash burn and not the hyper valuation . Cash burn is the issue. The company has about 3 billion right now in cash. 1 billion and change in debt. They hope they can raise a lot of debt and some cash in ipo. They need at least three to years of runway. Foursimple math, 200 million a year three or four years of , runway, this Company Needs about 10 billion in cash sitting on the balance sheet. Taylor talk to me here about the timing of that. I spoke with an analyst yesterday who says he would like to see wework hold off from raising more money until the First Quarter of next year. Does that fit within your timeline of when you look at the company and talked to all the notlysts, perhaps trying to do the offer the rest of the year . We will have to see how they approach this. There are certain aspects of the Credit Facility they are hoping to get that as far as i understand they are limited to being available only if they do it in calendar year 2019. There is a deadline that is waiting in the current set up a which is that they could get the 6 billion in credit but only if an ipo is in the next calendar year. If they end up pushing the ipo into 2020, the going to have to start the process back a little further. Talk to banks again to renegotiate this opportunity to get credit. Taylor you are nodding. Talk to me about that fundraising environment. Is it that . Is it equity . You mentioned, they need cash relatively soon. I agree. Theres a contingency that if you raise a 3 billion cash round through the ipo, you get 6 billion in debt and this has to happen close by the end of this year. There is a deadline they are working against. They work backwards. If you were to raise 3 billion in cash, we can settle so many shares and part with ownership dilution. It is up to the existing investors how much dilution are they willing to accept and for what valuation . If they knew to do this careful math of getting to 9 billion in cash by the end of this year. Taylor we worked in a quiet period not being able to respond to the comments, so be fair to them, we should note that. I want to be careful to not directly relate these stories, but these buildings in london seem to be on the ropes. Walk me through those deals. Who is backing out . Reporter it seems like the potential buyers for these buildings in london are starting to get cold feet. We dont dont know, want to imply causality connected to the delayed ipo, but i certainly think anyone in a deal with wework right now is looking carefully at the financials of the company, the plan for the ipo, and making those considerations. One of the buildings is the wework waterloo in london, sort of this big campus with a skate park and stuff. Even that is hitting a little bumps along the way and we are not really sure why. Taylor we will have to leave it there. For joining me. Coming up, more exclusive interview with the ibm ceo. Why she thinks blockchain is all about trust. This is bloomberg. Ibmor earlier today, announced it would open the First QuantumComputation Center in an effort to expand its slate of condom computers and further realize the next business potential of the nextgeneration technology. The realworld application of quantum, and for that matter, blockchain, is something bloombergs Caroline Hyde covered when she sat down with the ibm ceo, ginni rometty. When i look at the future of technology, were all about applying it to business but we built some of the worlds leading technologies. Yes, cloud and ai, everyone talks about that today. Artificial intelligence and cloud. Much more to be done there, by the way. We will park those for a minute. The next two, blockchain and quantum. As often is the case with new technologies, people overestimate in the beginning and then underestimate in the long term. But blockchain, if you said, what is one word you would associate with blockchain . I would say trust. You dont even have to use the right kind of blockchain. Which is not always the case today. Blockchainhing, what should do, it would put trust trust between parties who dont even know each other, so it would make trusted transactions , and it would do what the internet did for communications between lots of parties. What it allows you to do is, you and i could share a transaction together, i dont have to see anything you dont want me to see. Once a transaction is completed, it cannot be erased. Think of a ledger. Why do we each keep our own checking accounts . Do we trust what the bank says . Today, we probably do. In the old days, we probably mailed a check and we would check our own notes. It is the same idea of a blockchain. It is what it is doing. A big application right now is food safety. One out of 10 people get sick. 600 Million People or more in the world get some kind of illness from food safety. It costs a lot of money. You have seen it where they have been recalls on spinach and the like. We started something called food trust. Think about this. Walmart. These are competitors in the world willing to join on. Unilever, driscoll strawberries and the like. They are saying we will put our data on here about what row in the farm this came from. From farm to fork. And weere is an issue have done millions and millions of transactions already through this i can pinpoint where the bad spinach is, versus call it all back. One third of the food is wasted in this world. That is one. And quantum, i jump over to quantum, just as i said lock chain and trust, quantum will solve problems with todays traditional computers, that no matter how fast they are, cannot solve. Traditional computers, zero and one. We learn about that with computers. Quantum bits have infinite states. Today, even if you have the best supercomputer, you could never model. It would run forever. I exaggerate a little but to show you that, its an approximation. Why do biology labs still do live . They cant get an exact simulation done. What quantum will do is things like Drug Discovery material , sciences, risk management, logistics. These are incredibly difficult. A you wanted to truly model molecule of caffeine, you would need a computer 1 10 the size of this planet if you actually wanted the actual simulation. Already with our quantum systems, we have made commercial ones available through the cloud, because they operate colder than outer space. You have daimler working on new materials like batteries and cars. J. P. Morgan is working on things like how to price different options, how to look at risks differently, and Drug Discovery. We have a huge network of clients and now is the time to start to get used to it. Now you say the word trust. I would add one side of quantum. There is a dark side. Quantum can break traditional encryption. That has protected most of the world. We announced new systems last night that to prepare for quantum already. Already our security in them to , secure whats inside our systems to run the missioncritical systems, they are quantum safe. We have been equally building something called lattice cryptography. It is a kind of encryption that quantum cannot break. This goes back to responsible searches. That is something that quantum cannot break. If im going to build a to will that is so powerful, i owe it to society to be sure if it has a downside, that i address that. We want to prevent that thing from being that powerful. Taylor that is part of bloombergs exclusive interview with the ibm ceo, ginni rometty. Coming up, lets talk Sustainable Investing and hear how the worlds second richest man is helping those hit hardest. Thats bill gates. This is bloomberg. At comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. Taylor this is Bloomberg Technology. Im taylor riggs in san francisco. The Trump Administration has scrapped californias authority to set tougher auto in missions standards than the federal government. President trump tweeted the move will allow the production of cars that are both cheaper and safer. Revoking the california standards will have a major impact on 13 other states if they follow its lead. They represent about 1 3 of the u. S. Auto market. I am joined by bloombergs brian been ryan bean, who has been reporting on the story. You know what caught my eye attention in that tweet . Cheaper and safer. Is that the case . Ryan automakers, as a lot of as a result of the administrations plans, they change. Automakers operate on pretty long term planning cycles. Even if standards change in 2021, most companies have their plans locked in for the year. Where you will start to see changes in the types of vehicles and mixed vehicles is the outer years, around 2020 4, 2020 five, especially considering it will take several years of litigation resolve this administrations challenge to californias authority. Thisr how disruptive is for a business like gm, when they have diverging views for federal law and state law. How much of that uncertainty affects the business . Reporter its important to keep in mind that the Auto Industry is a very global industry. While there are very few global cars cars are different in the United States than they are in europe or asia a lot of the internal components are pretty consistent. For Companies Like gm who want to sell more electric vehicles in the coming years, if there is not a strong regulatory or demandbased lever to help support sales in the United States, it makes it harder to pencil out the Business Case for those electric vehicles globally and puts a lot more emphasis on markets like china. Taylor when we talk about the electric vehicle market, outside of tesla, who would win or lose from the ev mandate . Ryan if the electric vehicle mandate were to go away, as the Trump Administration has proposed, it would make it a lot harder for companies or a lot more difficult for companies to potentially offer the variety of electric vehicles that they are doing right now. Californias regulatory mandate, which was followed by around 10 other states, has been a big reason why you have seen more companies introduce electrified plugin hybrids as well as electric vehicles. Without that lever, demand is still very limited. Roughly 1 of the market has a plug in it right now. 1 of vehicle sales have a plug. Without that lever, it will be harder to potentially offer a wide variety of models. Taylor how does california respond . Ryan in court. It is a pretty safe bet california is going to challenge this in a very strong way. They will probably be backed up by Environmental Ngos and other interested parties. It will take potentially a few years to resolve and part of the reason the administration has moved to separate this attack on californias Regulatory Authority from the overall proposal to ease federal emissions and efficiency standards is the likelihood the administration could move to the with trump still be in office. What they dont want is the question to still be lingering in the courts in the event a democrat wins in 2020. Taylor the fight continues. Bloombergs ryan beene, thank you for joining me. Bill gates has invested billions in clean energy and to tackle Climate Change, but his latest strategy is not to try to prevent it. Gates wants to help those hit hardest by Climate Change. That is geared towards adaptation. The worlds second richest man recently spoke to Erik Schatzker in seattle. If you cannot afford air to the addition he conditioning, if when your crop fails, you dont have a savings account to get past that one year and your children dont have enough to eat, if you live near the equator where the temperatures are higher than it is in temperate zones, Climate Change is caused by middle income and rich people. But the people who suffer by far the most will be the poorest. It is very unjust. The wealthyally for people, the problems will be very bad. Years, most30 or 40 will hurt the subsistence farmer. Reporter why focus the foundation on mitigation and adaptation to Climate Change instead of combating the root problem Carbon Emissions . , mitigation is not an area the Foundation Gets involved in. That is where you are trying to ortch to green Energy Electric cars or meat that is made without cows, that is big private sector stuff. Reporter and you invest in that. I invest billions in those things including nuclear reactors, all sorts of things. Adaptation, which is taking the fact that there will be climate problems, and we need to help those hurt by it by giving them better seeds that can deal with the drought or that are more productive so you can save money those things, the foundation is very involved in. Most people think about this mitigation of reducing emissions. The idea of how you minimize the damage, which they call adaptation that gets very little attention and thats why i and a few others created a commission about this adaptation issue that later this year will make it more clear that there is work to be done. Reporter do you think Climate Change is stoppable or maybe even reversible at some point . We are not going to have a year where the world is cooler than it is today. Temperatureglobal will go up a lot. In the next 50 years, it wont go down. Deciding how much it goes up, by two degrees, three degrees, or four degrees that is in our hands. If we ignore the problem, you will aim for Something Like a fourdegree scenario which means forest fires, days that humans just cannot go outside if you live near the equator. It is a pretty extreme case. Knowing how seriously people are going to take it, what types of innovations will come along will determine where in that two to four degree range, we are at the end of the century. I certainly hope we dont run the experiment of being higher than two degrees, but it will take a lot of commitment and a bit of luck on the innovative breakthroughs to be able to get there. Reporter there are a number of different ways of fighting Climate Change. Renewable energy is clearly one of them. Do you think governments should subsidize renewable energy, or should take up be dictated by Market Forces alone . The cost of wind and solar has come down dramatically. Some of that subsidization has helped drive that. Now they will not come down much more, so the tax benefits should be shifted into things that are more limiting, like energy storage, offshore wind, which ,till has a huge premium price lots of places we need the market to get going. The progress on solar and wind is very helpful, but the sun doesnt shine 24 hours a day. Theou are far away from equator, actually, in the winter, you cant get as much. That is just for the electricity piece, thats only 25 of emissions. We need a lot of efforts. Theyes, that subsidization, accelerated rollout, that is one of the few advances we have. It is less than 10 of all Energy Generation because the Global Economy has a lot of Energy Generation, but its one of the good things that has been developed. Taylor that was bill gates with bloombergs Erik Schatzker. Coming up, what does a 17 billion Data Analytics company do to diversify . You enter theng, vc world. Thats next. This is bloomberg. Taylor President Trump is not the only leader in california on wednesday. Former president barack obama spoke at a tech conference hosted by a big Data Analytics company. He offered insights on the use of data in governments as well as what tech his successor should stay away from, saying, the other thing that is helpful is not watching tv or reading social media. Those are things i would advise , if you are president , not to do. It creates a lot of noise and clouds your judgment. The company,of best known for Data Analytics, its got a brandnew bag it is entering the Venture Capital world wednesday. The Company Announced two new funds totaling 150 million. The first 100 million is its innovation fund. The other 50 million is its social impact fund. Thesl me more about it, splunk ceo joins me. It is really a classic fund. We are super passionate about data and the power that data can bring to solve some of the worlds problems, and those funds are purposely constructed to help invest in companies that have more of a commercial purpose using data to solve different issues around the world from healthcare to consumer issues to privacy issues. Leveraging the platform, but we are even open to investing outside of people who play in the splunk ecosystem. The other is a social fund, the transformation from an industrial economy to more of a data driven economy can be dislocating. There are a lot of organizations trying to help with everything from reskilling populations all the way through to beneficial programs that help in areas like Human Trafficking that would not necessarily be commercial amazing, but do societal good, using data as a backbone. Taylor analysts are pretty bullish on the stock. They are really bullish on the future growth opportunities. Where do you see that future growth . We have classically focused on technical departments within organizations. They are fully digital already, meaning they have overwhelming amounts of data at their disposal if they need to craft a signal versus the noise, which is where president obamas comments came from. The genius of that data is it can also be used for manufacturing optimization, supply chain optimization. But our core focus is still so early in the journey, we look at the market as being less than 5 penetrated. The bulk of the focus can remain on security, i. T. Resiliency, developers, and helping those buyers serve the rest of the organization by taking that same data and using it for other revenuegenerating or customer serving or cost savings after this. Taylor it was interesting on wednesday and post market. This was on news that cisco had tried to make an acquisition for data dog, which rebuffed the offer. The point here is the broader m a landscape. Do you assume splunk makes further acquisitions, or do you get bought out . [laughter] the thing we can control is who to focus on. Weve made over 10 acquisitions over the last four years. We are actively always looking at additional technologies that we can add to the fold and help customers. I would anticipate more in the future. We had two relatively big ones over the last three weeks. We see so much opportunity. We are truly at the beginning innings of this data era. Whatever it takes, organic or inorganic, to make sure the customers needs are solved and they can turn data into doing and not just be overwhelmed by it, is something we are committed to. Taylor within the cloud space, how do you compete with the big guys amazon, oracle, et cetera . They not only have the clout, but they have their own Data Analytics company. How do you stand out . Right now, we are adding value to the different Data Services that those vendors provide. We are enhancing and enriching the services they offer. The reality that any of us live in, when you are participating with google, with microsoft, with amazon, you have to always find ways to add value. That is going back to acquisitions and the massive investments we constantly make in r d, they keep coming in with really compelling services. We keep finding ways to add much more effective value to those services, but also drop on the multicloud horizon, to then take that value up even higher for organizations that have these very heterogeneous landscapes. Taylor as we dig down into your business a little bit, i should note a j. P. Morgan analyst upgraded the stock again today. He sees future bookings really strong going through the end of the year. How do you forecast future bookings . How do they look . The economy is in such an interesting state right now. What we have seen the last two quarters is theres a lot of change and people are trying to digest the change. This Digital Transformation we have been talking about for a decade remains top of mind for leaders. When you are facing cloud vendors that bring new Business Models to their customers, you must keep investing in the Digital Transformation journey and take advantage of data. So far, we are not seeing any big impact in our outlook for our products. Its always quarter by quarter outlook on that. Taylor how is the broader tax spending environment . Do you at all fluctuate with tariffs, with trade, internationally versus domestic . How has that consumer band felt . We are probably a secondary impact. As organizations have to bury bear the burden of tariffs, then they have to reevaluate budgets and what they want to spend that money on. We do trade internationally, we do sell internationally, and currency is an issue for us. We tend to be in u. S. Dollars. That still has an effect on us. Now they have to quantify what the new price is based on currency fluctuations. It is probably not quite the same impact manufacturers and shipping physical goods has, but ultimately, we are at the service of our customers and trying to drive them forward and their budgets translate back into what they can spend on firms like us. Taylor finally, you introduced some recent price changes. How much more of a tailwind is that for you Going Forward . The main focus we were really driving is serving customers. Customer success is our number one business criterion. This was a key element. We felt it was critical for customers to get value from splunk. Within our modeling, we think it is a tailwind. We think it provides a lot more leniency for what they can do with the software, and there is so much data that with an easier pricing metric, they are able to put a lot more data in and get a lot more value back out. Anticipate it will be a tailwind, but honestly, we would have done it even if it was a headwind because it is so important to customers to manage that data and turn it into effective actions. Taylor that was doug merritt, ceo of splunk. Thank you for joining me. Still ahead more from the d. C. , world. Managingear from vc partners on their big fund and big ideas. Thats next. This is bloomberg. Taylor we are sticking with the vc landscape, but this time we are looking at the kind of tech requiring lengthy r d as well as hightech engineering. In this arena, d. C. Vc just closed a fund looking to finance back early stage startups. This is now the eighth fund. Here to talk more about it and the land of deep tech, its managing partner. Thank you for joining me. Congrats on the 725 million fund. All about deep tech. What is it . Deep tech is a set of technologies that uses novel compu intentional computational approaches to address hard realworld problems, which we feel is the biggest opportunity in venture today. The way i think about it is over the past 20 years, vc has supported the development of massive compute resources in the i. T. World, and now we can use those foundational technologies cloud and ai and big data to now start solving some hard , realworld problems. Taylor what are some of those hard, realworld problems . A great example is our company in the agriculture space called pivot bio. They use microbes to disrupt the 200 billion synthetic fertilizer industries. It lets crops fix their own nitrogen and help farmers avoid putting fertilizer on. They do this in a costeffective cheaper,s much and also higher yield. To boot, the synthetic fertilizer industry is a pretty heavily polluting industry. It produces about 10 of global Greenhouse Gas emissions, all told. Taylor talk to me about who you are fundraising from a. Who is the partner and how has that fund raised the environment . We dont talk about specific partners, but we have almost an entire mix of lps who are Institutional College endowments, pension funds, global charities. Taylor we talk about there is a lot of cash chasing too few investments, creating hyper valuation. What are your thoughts on that . There is a bunch of money and there is sort of the rise of mega funds coming to vc. That is a phenomenon. The better question of that is how much of that is chasing deep tech . The way i think of it, there are a lot of dollars flowing into incremental gains, a lot of it in the i. T. Sector, and were a little underweight investing in the deep tech sector. It requires a highly specialized set of skills to invest in deep tech, so we feel pretty good about that. Taylor you feel so confident that your irr is worth it despite some of these concerns about valuation . We feel this is the best opportunity Going Forward. Rrs. E can drive strong i taylor talk to me about companies that are staying private too long. I spoke with John Chambers last week. He said companies are taking too long to go public. Do you agree . I think that is part and parcel of the earlier question of too many dollars, or of lots of dollars flowing into the venture market. Todays late round of financing led by these big pools of private capital are yesteryears ipos. I feel a little more Public Market scrutiny would be good, but that said, right now, the ipo window is open so we are seeing a lot of activity in that space. Taylor i like that part of your excesshelping to cure capitalism, which has helped some of these companies be massively unprofitable, massively Free Cash Flow negative for quite some time. Are the companies in which you invest Free Cash Flow positive and profitable because you want to rule out excess capitalism . At the earliest stages, they are not. They are obviously startups. It is the earliest stages of driving revenue, but we feel deep tech is such a great opportunity, because when you do solve on of these hard problems, you become a juggernaut and can drive massive amounts of revenue and capital, and we really do look at the fundamentals like that and feel we do have strong results across the portfolio. Taylor arguably, the best exit strategy is an ipo. Given the volatile ipo market we have seen of late, what is the exit strategy . Is it ipo, is it Something Else . I think you see a lot of m a and a lot of ipos, and we are happy with both of those. Our goal is to build durable, multigenerational, semijuggernaut companies that dominate a field, whatever their ultimate exit is. Taylor managing partner at d. C. E, thank you for joining me. That does it for this edition of Bloomberg Technology, and Number Technology is livestreaming on twitter. Be sure to follow our global breaking news network at tictoc on twitter. This is bloomberg. S bloomberg. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. 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