what. you don't have a desk bed? don't be left in the dark. get proactive alerts 24/7. comcast business. built for business. emily: dell goes on a $40 billion shopping spree. in a deal to buy emc that would create a computing colossus. this is "bloomberg west." i'm emily chang. coming up amazon aims to pull , the rug out under etsy with a launch of handmade. pandora is getting into a ticket business with a $450 billion deal. i will speak with pandora's father. congress asks the sec to take a look at two fantasy sports

unicorns. will draft kings and fan duel survive the scrutiny? first, to our lead. dell in talks to buy the enterprise storage system company, emc. according to people familiar with the talks a deal may be , completed as soon as next week. but it would be pricey, complicated. dell is speaking to banks about raising $40 billion to finance the purchase. it would involve taking emc private, and taking over emc is -- emc's controlling stake in vm ware. why do it? a deal would unite two companies coping with slumping demand. our special guest host has a long history of experience and opinions in silicon valley. now founder and ceo of social -- of the french capital firm,

social capital. great to have you on the show. you made a lot of noise about diversity in d.c. first, i want to talk about dell and emc. as i said expensive, , complicated. what is your reaction to this? >> i think it is a necessary step. i think the thing that emc is struggling with is two things. one is you have a fertilization business which they own through vm ware, which is under duress. and at the same time because you have competitors like microsoft. on the other side and in your storage business you have new startups like pure storage went public yesterday, who are driving all of this conversion to flash. so, you're basically getting attacked on both sides. if you're able to be private, you probably have the time to really recapture the growth engine of that business, rationalize the workforce, figure out how to streamline. emily: are we seeing something here that is indicative of the broader trend, old tech versus new tech? chamath: that is the most

interesting point. this is indicative of a pattern for the future. you start at the point where you are the young upstart, there is lots of growth, you are breaking new ground. at some point there is this era of stagnation where you are a cash cow. then there has to be rationalization. you cannot do that as a public company. once you have been public for 15 or 20 years. emily: are you a bubble or no bubble guy? chamath: i dont think there's a bubble, there was a handful of extremely overpriced unicorns. unless these metrics hold, it will be difficult for us to look at every other unicorn that is able to raise money in their tailwind and ask yourselves, if that company is not worth what he thought it was, what is it mean for all these other companies? emily: are you seeing signs behind the scenes that things are going south?

chamath: yes. emily: what are you seeing? chamath: so, what i am seeing our companies who come out with these extremely exorbitant expectations on valuation or fundraising. so, they go to the market. the same people that six months ago would be writing $200 million checks are passing. what that happens, what they do is they say, you know what? we've decided to raise it in nine months. that is code for we were not able to sell this bill of goods. emily: how many unicorns are -- unicorn zombies will we see? chamath: they are all probably very good companies at some level. but that label and valuation is going to be a noose for 20% to 30% of them. emily: 20-30% of the unicorns will turn into zombies. chamath: it is a re-trade on value. let's take a company right now that is going through some tribulation.

for example, evernote raised , money at a big valuation. i think that is a great service. if you use it especially for , people trying to consume and digest lots of information, it is valuable. emily: is it the future? chamath: it could be a company if it is worth $300 billion. emily: i do want to ask about apple because i love hearing your thoughts on apple. you are here with your new rose gold iphone. i also have a rose gold iphone. i'm surprised to see you in one. you came out two years ago with this controversial op-ed saying steve jobs would have and should have bought tesla. and tim cook is "milquetoast, say nothing, uninspiring tweaker ceo." chamath: that was probably a little over the top. emily: ok, now that we know that apple is proceeding on his plans

it's plans to make cars. chamath: so exciting. emily: what is your view on apple today, and tim? chamath: we have used that company. we have been running an internal public equity fund for while. and whenever we think about holding cash, we actually hold apple. for us, it is sort of like the equity of last resort. so, we think that is going to be there forever. my biggest thing is how do you grow as a $500 billion company to $1 trillion or more? you have to attack multi-hundred billion dollars segments of the economy. when i heard that apple is trying to build a car i was so , excited because you're talking about them redefining transport along with elon and tesla. you are talking about them pushing a.i. it is so interesting now again for me to be an equity holder and that company. -- in that company. emily: so it is not a milquetoast ceo, tim cook today. -- what is he today. chamath: i said that not knowing him. i apologize to tim.

i got the clicks. i think those guys are slowly doing the work that is necessary. they have a shot of not going through an emc project three -- trajectory. emily: i want to ask you about something else. the two biggest companies -- are in the crosshairs of the sec. fanduel and draft kings have been facing questions over how much internal data employees have access to and whether that data can help those employees win on other sites. congress has asked the sec to investigate the two companies. fan duel and draft kings have banned employee from playing for money. last week, an employee won $350,000. i know you love your poker. i want to know what you think about this story. it sounds like insider trading. chamath: we have looked at this a lot. you are absolutely right. we looked at a couple companies. we had opportunities to invest in them. we looked at poker.

the problem is that people believe that there is a definition of something called skill based gaming, that creates the safe harbor. this is just like securities trading. we are seeing this play out. if this were not the fantasy mock draft of an nfl game but it was a handful of traders at a bank understanding forward flows of cash, they would be arrested and they would go to jail. i think the thing is, when you are allowing the public to participate in this thing, and we know that only 1% of these people make the money, it is unfair that we are not governing this with a system of rules in the same way we protect the equity markets. from being rigged and taken advantage of by a handful. i think it is basically the same thing. this is the tip of the iceberg were you keep pulling the thread and the doj and the sec will , realize they have to do something to make sure this does not get out of control. emily: it is definitely something we will be watching.

the founder of social capital partners. you will be with us for the entire show. you're behind a big new study in diversity in venture capital. the numbers are staggeringly horrible. we will talk about that. also coming up, sometimes liking something isn't enough. facebook started publicly testing new options besides the thumbs up. new emojis cover angry, sad, wow, ha ha, yay and love. ♪

emily: it is no surprise that diversity among top companies in silicon valley is lacking. while tech giants like apple, facebook, google have been taking fire for not hiring enough women and minorities, the staff in venture capital are even worse. way worse. social capital is out with a study on gender, ethnicity and age diversity. with a somewhat controversial ranking system based on those measures. still with me, our guest from social partner capital. i want to start with you. look, this is not surprising. it may be surprising just how bad it is. what are the trends that were most surprising to? -- to you. chamath: what will were trying to do is document to figure out what makes firms great, and what are they doing when they are successful? there are two major takeaways we saw when we went a collected

this data to try to tease out things that we have the firm should be doing. the first one is that there is a very clear correlation with returns and the age of the investing partner. what is interesting is that most of the great exits, all of the money that is ever been returned to investors over the last 40 years, has all been generated by people between their early 30's and late 40's. what that told us is, we need to make sure we are being really generative really quickly. when we are in our late 40's, we should be guiding people. we should not be taking up all the economics and preventing young, talented people. the second big take away was around the diversity of thought that leads to great outcomes. when we looked at the things that we have done that have frankly been really successful for us, they were all done in ambiguity. nobody could agree. when we looked at who these people were, we saw this beautiful collection of different people, men and women from different backgrounds, who helped us get to what ultimately turned out to be a good

decision. that was the lightning rod that said consensus is really bad. emily: let's talk about the numbers. 92% of top vc's are men, compared to 70 somerset -- 77% of leadership in technology companies in general. four black vc's. 1.3% hispanic. why is it this way? >> i think when you think about historically what has been successful in this community, it's a community that has historically been dominated by older white men. at one point, younger white men. he hit it. when something has been working for you, the notion that homogeneity breeds success is a misnomer. but if you been doing something and have been successful in a -- for a wild, why change?

whereas, i think if you look at what is happened in the tech industry at large and the change we have seen in the last 20 years, the amount of innovation, i would say vc's are not keeping up. what successful in tech has far c's.assed the pace of v chamath: we are supposed to be the ones that are controlling the capital to the disruptors. >> the disruptors are controlling the vc's. emily: let's talk about this ranking system, where you are at the top. social capital is number one. kleiner perkins am a number benchmark 22. five, sequoia 30. entries in horowitz 37. -- andreisen-horowitz 37. chamath: we are not number one. we did this with a great team who did all this work. when you look at the ranking of the firms that did the best, it is smaller firms like cowboy ventures, people who have taken it on themselves to create a diverse situation where

different people can make interesting decisions together. we were fourth or fifth on the list. emily: well, so, some people -- i've been talking to other vc's -- nobody wants to talk on the record. they say is this list fair? , you are at the top. chamath: the ranking methodology was not ours. that is what facebook and google use. we used to that. all of this, by the way, is published in the open source. anybody can quibble with the methodology. it is irrelevant. the real question is what drives long-term interest? -- returns? it is very clear that age is fundamentally correlated with returns. we know that now can to slippery -- conclusively because the data is out in the open. it is transparently available. go to vc diversity. org. you can download the source and see the same conclusion. but the second thing is that i think we are now starting to see enough data point aspect,

floodgate battery where now y-combinator, who is the top for firms under $1 billion. there is a perception that we are the ones doing well. in five years as we start to publish on returns, and that makes it even more of a commitment to me. our firm will publish a returns. and we will show you that having a different, interesting group of people will generate massively outside returns. emily: but lp's are still giving money to the obvious suspects. >> there are two things going on. number one, one of the things all of those firms share in common is they are in fact born and bred of this age ran if we -- age. if we talk about social capital, if we talk about floodgate, if we talk about cowboy, aspect, many of them are bred of a new generation of entrepreneurs who stepped out of traditional firms and into a new model of investments. keep in mind, i think one of the

things that lp's, i think of them as a lagging indicator. like the people they put money in, they will be the last follow. but when they follow, it is a very important signal. emily: so, what is going on with ford lists. this is your effort to get more women and people of color on board. >> it is correlated in his effort. if you think about the board what did we do? , we went out and we went to leading vc's and said, even if you cannot solve the issue of diversity in your own form, you are 100% capable of solving diversity on all the boards you fund. the board list is comprised of abc members and operators nominating women for tech boards. it is as incumbent upon venture capitalists to not look to the excuses of their own lack of diversity to not put women on the boards of their. companies -- their portfolio companies that is one thing they can control today. chamath: can i take also why it is important? it is important today and that

we need to start this war on good ideas versus bad ideas. there are just so many things right now that we should be spending our time fixing. cancer, an educated humanity. why are we not finding the types of people who find those problems interesting, who have the patience and the capital and the risk appetite to put that stuff together? so, another reason why this change is important is that a different class of people, older-younger, different complexions, also look at harder problems and say, let's solve structural inequity because it is a more interesting problem than brownies at 11:00 p.m. emily: you also have a great op-ed. in the information funding brose which i highly suggest reading. . you are sticking with us. thank you so much for stopping by. >> no problem. emily: pandora is buying ticketfly for $450 million. did the music streaming service over pay? we will speak with the founder. ♪

emily: now to pandora buying ticket fly for $450 million. pandora shares closed down 7% today. some analysts thinking pandora overpaid for this deal. ticket fly provides ticketing for events like burning man. joining us now, tim westergren founder of pandora. and still with us, chamath. tim, you know, stuff you have been talking about for a long time, which is getting into the live events business.

but why does this make say and -- makes sense, and why was the price tag the way it was? tim: it was the center of the bull's-eye for us. our company is set up to connect fans. if you are musician, the place you like your money is in my performance. that is a huge problem for musicians. the great problem for artist is how do i get people to see me when i'm not being played on broadcast radio? pandora has a gigantic audience of people about whom we know a lot. we have a sense of their location. it is really the perfect final -- funnel to bring people to live events. just aligns perfectly with our mission. emily: it is a completely different business for you, though. michael packer came out saying we see little value add for pandora beyond promoting artists and pandora has limited experience in hosting concerts. tim: it is not a different business. our business is connecting artists and fans. this is another place to do it. we are not getting into the events business. we are getting in the ticket discovery and delivery business. it lays on top of our existing capabilities and what we do well.

chamath: seems like you are building a stack of experiences. you have the listening experience on the phone, and now you're going to connect. that to the live expense -- experience. while go through that trail of breadcrumbs. what comes after that for you? tim: it does start with listening. radio remains the dominant form of listening, and pandora -- 10% of all listening in the u.s. people come to music and discover it on pandora they are , connected. we are on the web. we are a one-to-one relationship. we can communicate with people. we can create the destination where all things can happen. you start by hearing a band you've never heard before that you love. how do we make it easy for you to discover they are playing someplace nearby? to join the fan club, to get special communications from them. it just is so easy for us to turn that into a marketplace, where artists, fans and venues can meet. it is going to be -- let's check all those boxes.

let's make pandora the place where you go for everything you need and music. emily: how would this change my pandora experience personally? i'm a big user. am i going to be hearing ads for concerts? can i thumbs-up when i hear an ad and get it to get right away? -- and get a ticket right away? tim: maybe the simple way to illustrate his you are walking down the street in san francisco r a tune byu hea blues traveler. when it ends, john poplars force comes on, saying hey, i'm playing at the fillmore tonight. tap the button to buy a ticket. that gives you a taste for how you can make this seamless. chamath: what do you think happens with apple, spotify, everybody else that is loosely now around this space in the absence of something that can connect to the off-line experience? tim: everyone is going to look to create a complete music experience. they do seem to be blending and merging. on-demand is trying to move in to radio. i think the winner here in this space is the one that can aggregate the largest audience,

know them well, and make the rest of the experience intuitive. that is the key -- make it simple and easy. emily: the ceo behind apple music had some harsh work -- words yesterday for the premium side of music yesterday, saying it steals on the back of artists. they are stealing revenues that should be going to the artists. the artist have to kill themselves by going on the road. what is your response to that? do you foresee a day when artists are not making most of their money on live event? -- events? tim: it is an emotional topic. i will answer that two ways. one, online radio pays half its revenue in royalties to artists. broadcast radio does not pay performers a dime. movement from broadcast to web is a huge win. secondly, it is a connected environment to do no people, you can talk to them, build fan bases. that is the future. emily: by the way, tim mentioned that pandora's 50% women, which is great news. tim westergren of pandora.

chamath, thanks so much for joining us. we will be back tomorrow with the jobs movie which is out in theaters tomorrow. ♪ >> what about these people

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