Generally, quite high. Now, they are not so high when you compare the returns on equitys two returns on safe assets like bonds, which are also very low, but there are also potential dangers there. Emily yellen also said that they could see a sharp jump if the fed raises rates. And the Time Warner Cable deal, calling for more diversification in the business. Mr. Wheeler we do not have a lot of competition, especially at the speed that are important to the consumers of online video. A fully competitive marketplace would bring with it the intense and constant pressure, pressure to improve just as it did in the days of cable dsl competition. More competition would be better. Emily at that same show cablevision ceo james dolan said he wants the cable tv market in new york to consolidate. Tesla shares are rising in afterhours trading. The electorate carmaker saying revenue rose to 1. 1 billion dollars, while the Company Reported a 154 million loss. Tesla says it is on track to deliver 55,000 vehicles this year. And job cuts at zynga ceo mark pincus cutting 18 of the Workforce One month after returning as the eos part of a plan to save the social Gaming Company 100 million annually. Firstquarter results show improvement in mobile. Now, to our lead. The money keeps blowing into Tech Startups in Silicon Valley and shows no sign of slowing down. And the last week, we have seen a firm raise millions in funding, a drugmaker pocketing 75 million, and an hr startup zenefit scoring a 4. 5 billion valuation. After they broke the dot com hi gh before pulling back, and you heard Janet Yellens concerns and joining us is cory johnson and parker conrad, the ceo of one of the companies i just mentioned, and that is zenefits. Parker, thank you. First of all, congratulations on your 4. 5 billion valuation. Parker thank you. Emily why do you need that kind of money . Parker they are going after some of the Largest Companies to sell them software. Zenefits are going after the 5 million, and there are so Many Companies out there that there are just a lot of people out there that we need to have conversations with that we need to give pitches to and field questions from, and then there are a lot of folks we need to hire. Longterm, a lot of the costs are frontloaded, so when you want to go very fast and very far, you are going to burn a lot of gasoline, and so in this car we are driving at high speed and want to get a lot of customers we have got to make like the mother of all pitstops to fill up on gasoline and beef jerky. Emily i appreciate the metaphor. You and i have been speaking over the last year. How do you as these eeo make the decision to take on this kind of responsibility . Is it scary . Parker there is a little bit of celebration like this and i think a lot of humility about sort of what is in front of us because obviously investors are investing on the promise of a a lot of future growth and a lot of future execution of the business. We feel that the market we are going after is absolutely enormous. It solves a really big problem for almost any business in the United States and if we do not screw it up, in a couple of years, a lot of the guys in this round will look prescient. Corey what kind of growth rates are we talking about, and what could we imagine we are talking about now that you have fueled up on beef jerky . Parker zenefits is the Fastest Growing in Silicon Valley history. We are two years old. We started out in 2014 with the run rate revenue and closed out the year having growing 20 times , and the planned for this year takes as past 100 million in run rate revenue by the end of the year, and we want to keep growing at those kinds of rates into 2015 2016, 20 17, and when you want to grow that quickly, it means you need to really capitalize the business well. Emily lets talk about what you do. You tie together payroll and Health Insurance and all of these payroll things into one software, right . Parker that is the idea. The buddies today have all of these disconnected systems or their employees, and things like payroll and time tracking software, and it creates a logistic nightmare for these businesses, and this gets rid of all of the administrative burden, a lot of the compliance headache, and the best part is we give the Core Software away for free because we make money on all of the adjacent systems. Cory it is sort of like a lead generation basically, for these other businesses, right . Parker yes, that is kind of one way to look at it. It is sort of a freemium market. The Affordable Care market makes it simpler to price Health Insurance, which makes it easier for us to do online. It also just, quite friendly, as to the compliance burden for a lot of Small Businesses. There are a lot of filings to make and compliance they need to deal with, and what it does, it makes it harder and harder for a Small Business to kind of role their own, and we take this off of their plate and handle all of it for them, so it makes us very compelling. Emily Silicon Valley . Parker i sometimes watch the show, and it is a little too close to home, and i topped watching it. Emily there is a scene in the show this season where the main character is talking about raising money, and someone tells them, look, dont raise that much money because you may have to and of going through a down round, and that will be absolutely devastating, and he thinks, maybe i will raise less money at less of evaluation and there were a lot of people who were trying to write him checks. With that happen in real life . Do you as a ceo say you should not be raising that money because it is too risky . Parker all of the underlying metrics are pointing in the right direction. Every customer we acquire longterm we think is extremely profitable. Science points towards us stepping on the gas, so for us my goal is to run the company so that we never need to raise another round of financing, and we want to capitalize the business in a way that lets us run the company in a way we want to run it, scale at a speed we want to scale it, and run and get this opportunity we see in front of us. Corey i hate to lump your company in as we are with the other companies raising money, but i wonder if you do see some similarities about, i dont know, what is it, the freemium model, using Something Like amazon services, not having to build up the kind of infrastructure that companies had to build up when launching software companies, say, 10 years ago what do you think are some of the commonalities with these companies that are seeing such big, rapid growth in early stages of development . Parker i do not know much about the ecosystem at large but even as recently as 5, 7 years ago selling businesses on outsourcing a lot of this stuff and having the software be in the cloud and accessing this over the web, that was something you had to convince people to do, and now i think a lot of companies are sort of bought into the idea that that is a good way to go, and are so many industries. We really focus on the Health Insurance and hr stuff, where a lot of the legacy systems, and there are no systems to speak of, or the software is 20 years old so they are looking around, and it is so frustrating to deal with all of this stuff, so there is an opportunity for businesses like ours to make life a lot easier for businesses in these very unsexy corners of the world that happened to be fairly lucrative. Emily and the software is available for free, right, to all of these businesses . So how do you make money . How do you get a 4. 5 billion valuation . Parker the micro levels, we connect all of these systems. We give the hub away for free, but we make money on all of the spokes. Remit money and lots of different places. Big picture, the way i think about valuations like this there are only three systems of record. There is a system of record for their financial like quickbooks, intuit, oracle, and customer information, like salesforce, or for employee information, and there is sort of a giant hole in the universe for any company with less than a thousand employees on this third leg of the stool so we have a decent shot of occupying that space and being the place, the system that businesses use for this, and that is a very big and very important and i think very lucrative thing longterm if we can get there. Emily coleman would you ever take 3 million off the table and by a red ferrari . Arco parker no, i am more a Toyota Corolla kind of guy. Emily good to hear. Parker conrad from zenefits, thank you. Back with us later on the show. Emily welcome back to bloomberg west. I am emily chang. The Home ShoppingNetwork Still doing well. A new Democratic Party swept the power ending 44 years of conservative rule, pledging to boost corporate taxes, phase out power, and scale back oil pipelines. And campaigning in Great Britain with the National Election tomorrow, and it appears brightest or David Cameron may be making some last and it inroads. The biggest u. K. Bookmaker now gives cameron and ed miliband the same odds. Miliband was the favorite last month. We just heard from the zenefits ceo, parker conrad, about his fundraising round, and raising more than 35 million in venture funding, are these investments secure . Are we taking on it too much risk . What goes into these fundraising routes . What diligence goes into them . Joining is a founder of a Natural National venture fund. Guest in its early stages. Emily i just asked parker the same question about taking millions off the table and buying a red ferrari. What do you think about a move like this for a founder . Guest i think risky. It certainly can be an irresponsible thing, and the worry is it changes it. Emily how much followthrough goes there . If they buy a red ferrari, for example, and takes the money for themselves . Mike how are they thinking about spending it before they raise it . They will spend money with the management team, understanding why they need this capital and where it is going to go. Emily so do you think investors knew they were going to take that much money off of the table for themselves . Why do investors allow that to happen . So for a start up at that stage why would they do that . Might mike that is a bargain they strike. Emily it was extremely buzzy but then he was completely shutdown. What kind of diligence is done to determine whether the company is actually going to be successful . Mike it depends on the company. Zenefits is different than with secret. With secret, it is much more data. You are looking at User Behavior and retention, and how many are coming back and how frugally they are coming back. Is it something that becomes habitual behavior . Emily should we be concerned . Secret is not the only one and then on the opposite and of the spectrum, you are seeing a company like zenefits raising so much money. Mike we should be concerned. We all know that every up cycle is followed by a down cycle and none of us knows when that is going to happen, but when it does, it will be a painful thing. The bunnies tend to grow into the amount of capital they have raised, which means their burn rate goes into that, so if a company gets in a situation where they are going through the capital very rapidly, the market turns, it is going to be very difficult to raise more capital and that can be a very dangerous place. Emily so you think this down cycle is definitely going to happen . Mike yes, it is writing a high and it will not continue to go up. None of us know when we all know it will happen. Emily what do you advise companies to do in terms of taking on this kind of risk . Mike i was having this conversation with one of my ceos, who raised a lot of money and has opportunities. The conversation is be very very thoughtful. Raise the maximum you can at the highest valuation is often not the answer. Emily really . So you would do with the guy on Silicon Valley did, take less for less . Mike this ceo i am talking about did that. Emily so it does happen. Mike it does happen. There are thoughtful and dont go for the biggest numbers. Emily mike hirshland, thank you. Coming up, how the Home Shopping network is keeping people glued to the phone and the website. Next on bloomberg west. Emily welcome back to bloomberg west. I am emily chang. Hsn reported firstquarter earnings today. Sales were up 8 . Profits grew 39 . Meanwhile, Digital Sales continue to rise, up 12 year over year. Shares are up on this news, and joining me now to discuss the digital transformation, Mindy Grossman joins me from their headquarters in st. Petersburg florida. Mindy thank you for joining us. Retail is sluggish overall, but your business is booming. Why . Mindy hi emily, thank you for having me. There are several reasons. The first is we have spent a lot of time in tools and talent to really use our data and Analytical Capabilities to drive meeting and personal and customized relationships, and it has had an impact on acquisition, assimilation retention, and overall growth in the business, so our customer files are the highest in history. Second we have invested significantly in the digital experience as a whole particularly in mobile and that is everything from how do we optimize the experience to the content that we have incorporated through all of our applications and all our programs, and then the third which goes without saying, is the strength of our product, our experiences, our events, and our content, and it is really the carbonation of all of those hangs that really differentiates us within retail because we are a media company. We are a technology company. We are a commerce company, and we are using all three of those things in tandem to really create a very different experience. Emily now, a lot of people still think of hsn as a tv network, which, as you just said, is more than that. I know that about 70 of the things you sell is exclusive. Mindy i think differentiation of every kind is important to be able to compete today, so that is differentiation of product so at hsn, 70 of all of the products are exclusive to us, and with some of our businesses, it is even more than that, like front gate or with garnet hill. The second is how are we also in gauging the customer, so that is everything from our having an arcade which allows her to play games, or integrating social all of the way through the site and the experience, or partnerships emily we have got about 30 seconds left. I just want to ask you in a future where tv might not even exist, where is hsn . Mindy from our perspective, it is not the court, it is the content. It is not just hsn. It is hsn off platform, so partnerships with aol and univision. It is going to be so broad. Emily Mindy Grossman, thank you so much for joining us here today on bloomberg west, and we will have more on the republican race and what is happening there on twitter. Just because im away from my desk doesnt mean im not working. Comcast business understands that. Their wifi isnt just fast near the router. Its fast in the break room. Fast in the conference room. Fast in toms office. Fast in other toms office. Fast in the foyer [pronounced foyyer] or is it foyer [pronounced foyyay] . Fast in the hallway. I feel like ive been here before. Switch now and get the fastest wifi everywhere. Comcast business. Built for business. Emily this is bloomberg west, where we focus on innovation, technology, and the future of business. The flash crash that rocked the market and the british man accused of helping cause it is spending the day in jail. Bail for sarao, and his Attorney Says he had done nothing wrong except be good at his job. And the germanwings pilot who is believed to have deliberately crashed his plane into the alps was supposed to be on another flight earlier that day. He had set the jet on five different occasions before setting it on a cruise mode. This from an interim report. The Justice Department says it may open up a civil rights investigation into the Baltimore Police department. Mayor Stephanie Rawlings blake called for the inquiry after the death of freddie gray while in police destiny. Senator Bernie Sanders of vermont has proposed to break up some of the biggest Bank Including j. P. Morgan chase and bank of america. He is challenging Hillary Clinton for the democratic nomination, and that could put pressure on clinton, his some feel is too cozy with wall street. And turning out to the race for the 2016 republican president ial nomination, there are now candidates in the field, and two of them have never held political office. Carly fiorina and ben carson. How can they stand out from the rest . The secret may be in their digital campaigning. Joining me is a former digital director of the Mitt Romney Campaign and cofounder of targeted victories. Thank you for joining us. There is a perception that democrats are better at digital band republicans. How fair is that . Guest i think that is predicated on the president ial campaign for president obama being so successful for a reelect, but what we saw in 2014 is that is not the case, that everything is different, and everyone starts out in a position whether incumbent or not. Emily given that the number one candidate on the democratic side is Hillary Clinton, and every