>> you're watching bloomberg technology. let's start with a check of your first word news. the white house said today's senate budget agreement meet the priority on defense spending and providing a two-year budget plan. the agreement on a two-year nearly 400 billion budget deal programsvide domestic with huge spending increases. white house staff secretary rob quarter will resign after a tabloid reported he emotionally and physically abused his ex-wife. he called the allegations outrageous. john kelly defended porter, calling him a man of true integrity and honor. railroad executives are now pgc will not be in place

by the end of the year. now, the train safety technology will not be installed until 2020. the ntsb says it could have prevented sunday's amtrak collision in south carolina. another reason derailment near a yeah, washington. in all, five people were killed and dozens more injured in two new crashes. we have live pictures we would like to bring you from the house floor. nancy pelosi is setting a record for the longest continuous house speech. the house historian says pelosi talked the record speech of five hours, 15 minutes. we will stay on top of that and much more. this is bloomberg news. emily: i am emily chang, and

this is "bloomberg technology." electric carmaker still sees its model three meeting weekly goals. we will break down the results. our exclusive conversation with sheryl sandberg and why she says metoo movement has not gone far enough. travis kalanick once again takes the stand. tesla jumping around in after-hours trading after reporting fourth-quarter results in revenue that the analyst expectations. the electric carmaker burned through cash at a slower clip after making progress building more model three sedans. tesla reported negative free cash flow in the fourth quarter. the least in more than one year. joining us now to further break down a result, nomura managing director and senior director. cory johnson.

corey, break it all down. what do you see? y: i see a company that has been taking a lot of customer deposits for cars they cannot build. we knew was the numbers were, but it is striking that accompanied that was once a 70%g and had year-over-year clip is less than 1% growth in terms of the number of cars it can build. what we are hearing from the model three -- i posted this on my a twitter page. real car guys are looking over the car, the engineering of the model three, and finding real issues. they could put their thumb right through on one side and could barely see through the other side. it just looks really uneven. there are attachments of pieces of felt and things. the door does not close quite right. legally, they are struggling with the production of this model three. it is more than they can handle right now. we see in the earnings release is much more promises about

production, as we always see from tesla, and lots more borrowing and poor free cash flow numbers, which is what we always see from tesla. emily: shares not changed much right now. what do you think? are the things that cory is talking about here a concern? at thean, if you look results, what you're seeing is real progress. they built 220 model three cars in the third quarter. they built over 1500 model three cars in the fourth quarter, and based on their production guidance for the first quarter, they are going to build probably north of 15,000 vehicles. if they can continue on this wasectory, and i thought it important they reiterated their production guidance from the start of the year, then you have got a company that is going to grow their revenues roughly 100%, we think, to 25 billion

dollars. very hard to find a multibillion dollar company growing at this rate. a lookcory, let's take at g #btv 2341. production. tesla cars produced each quarter over the last several orders. we are seeing it holding steady. what does that tell you? they are producing 1500 cars in the quarter, a couple hundred the previous quarter, and that is not what investors thought they were getting involved in it. i would be surprised if rmit believesthe -- romit the production guidelines since they keep missing their estimates over and over. world wants this company to be a great success. the cars look cool, safe, fun to drive. problem is, tesla cannot build them. emily: do you believe it? romit: just look at the numbers. productionsed their of the model three by a factor of 10 in the fourth quarter, and

they are targeting to increase it by another factor of 10 in the first quarter. cory: do you believe those numbers, romit? are you going to say they will put the numbers in? romit: we have these production numbers and our model. if you look at our price target of $500, it is predicated on growing revenues 100% this year. emily: what makes you so confident? andknow, this is a company ceo that has admitted, you know, ell, and hasction h missed many targets. romit: it's true, but you have to think about it this way. the world is moving towards electric vehicles. and tesla is really the only game in town, and will be for the next two years. to 4000whether they get units by the end of q2 or 5000 units misses the point.

you have a multibillion dollar company that is growing at a very significant rate. if you look at the reviews, the customer reviews of the model three, and we have given ourselves, they are phenomenal. for most people, it will probably be the best car they will ever drive, and you see that in the backlog. they have got a backlog of over 500,000 reservations that continues to grow, so it is a premium car in the right segment of the automotive market, and you know, all they need to is get a couple percent -- game 2% market share in the automobile industry, and they are going to be doing, you know, they are going to be doing more than $100 billion in revenue, and i think the stock will be quite a bit higher. emily: cory, i know you have been digging into the cash flow situation here. what do you think? cory: here is why this matters. the company is going to run out of money if it does not get access to more money, and if it

cannot build the cars and sell not gettinghat are built are only going to last so long. free cash flow never got better this year. i have a chart. g #something. it was on the screen here. this tesla free cash flow number looks better. better.ow looks they are interestingly spending a little bit less in capital expenditures in terms of their factory and so on. they have positive cash flow from operations. if they only improve the performance of these new cars a little bit, what happened? you have got to dig into the numbers. tesla does not tell us. one of the great things on the bloomberg terminal is you can hitantly hit kiev on the -- cf.

and so, the question is, how do they do that? what was the change in deposits? the number has been negative most of the recent quarters. they do not give us the full cash flow savings so we can see what those changes are, but they had a $500 million improvement in positive cash flow operations, and virtually all of this comes from likely non-cash changes in operating assets and my abilities. that is why a free cash flow looks better. emily: cory johnson, editor at large. g #btv 2434. thank you. , thank you. thank you for joining us. snapck we are watching, shares soaring 50% after reporting its first earnings beat as a company. sales rose to a better than

expected 72%, and the number of daily active users rose 18%. these q4 result prompted at least five analyst upgrades. vping up, former google megan smith joins us to talk about improving diversity in the workforce. check us out on the radio. bloomberg.com. in the u.s. on sirius xm. this is bloomberg. ♪

emily: the winklevoss brothers are not giving up on cryptocurrency despite bitcoin plunging below the $6000 mark to the lowest since mid-november. >> we are long on the space. we don't sit there and watch the price day-to-day. we're in this for the long haul whether it is a decade or many decades.

like i said earlier, we remember when bitcoin was $8. as far as we are concerned, it is all gravy from here. emily: the twins were early bitcoin investors ,and at one point, their value was $1 billion each. they also say increasing regulation is good for the cryptocurrency space. well over the last few years, , big tech firms and startups have this the gender and racial makeup of their workforces, but for many companies, the numbers remain stagnant with no signs of improvement. i covered the topic in my book, "brotopia: breaking up the boys club of silicon valley," and my next guest has also championed diversity. under president obama and as a vice president as google before that, megan smith joins us now from washington. great to have you back on the show. you have been out over the last

few months on a tech job tour to get more people into technology. i'm curious of what you are seeing in terms of diversity of the people who want to come into this industry and how it compares to the diversity of people who are already a. megan: yeah, we have been all over the country in appalachia, milwaukee. we were just in oakland. we had lines out the door and there were people that would love to be part of the tech sector. when we are coming into town cheyenne, denver, atlanta -- we , get the word out and running an evening career fair. the companies are showing up, and people are showing up for the speed mentoring we are doing. a lot of people want in on these better higher-paying jobs, that pay 50% more than the average american salary. there's hundreds of thousands of jobs up in america. all companies are software tech companies at this point. megan: and yet -- emily: and yet, gender representation in computing women make up 25% of , computing jobs. the statistics for blacks and

latinos are downright depressing. and women-led companies are getting just 2% of funding. why do you think that is still? megan: extraordinary sexism and racism, ageism. all of this. and we have kind of really -- we really have to evolve out of this culture. your book is wonderful, emily. i am halfway through. i know so many people in there. it is just full of -- we got ourselves into this let's pattern-map the person and profile the vc's were funding. it is a huge challenge. over 90% of money from the venture world is going to men. 75% earn the tech jobs, and it is really going to silicon valley, new york, and boston. a lot of the country -- we were in columbus, and ohio is getting in one year what silicon valley is getting in a week. services diversity of location, -- so this is diversity of location, of people. we have so much talent in america. i'm encouraged because i saw

also many entrepreneurs from all backgrounds that we really need to get behind and lift this country. emily: i am not sure if you have got through the google chapter yet, but i write in the book that google founders larry page and -- really focus on hiring strong women in the early days. lots of incredible women like sheryl sandberg and yourself. if you look at the numbers today, google's numbers are simply average and facing this big lawsuit from the department of labor about pay disparity between men and women. what do you think went wrong or what is the lesson? megan: it is in all the companies. we just have extraordinary bias built in. leadership really has to just make this a very top priority. the leaders of all the tech companies -- like all companies , care about diversity, but it needs to move from number 20 to number one. diverse units make better products, so it is shareholder value opportunity and important for everybody.

we really need to do this work. there is lots of stuff that most companies are not doing. we wrote a piece in the white house called "raise the floor," and we listed all the things that leaders, and practices could do to make a huge difference if most people would pick them up. they just own up. we have a reckoning. this is part of time's up. plenty of time. let's go. we have tons of history that brought us to this place, but none of us created this problem. but once we know about it, let's go. emily: you mentioned the time's up movement, an outgrowth of the me too movement. i just spoke with sheryl sandberg. we will hear more from her later about the #metoo movement. i asked her if #metoo has gone too far. sheryl: i think the question is not if #metoo has gone too far , but if #metoo has gone far enough. because it cannot just be a moment in time where people raise their voice. these brave women who have

raised their voices, they want long-standing change. change that is not just for the day or with a month but for the years and the decades. that means we have to have the right institutional policies and those policies have to include due process, investigation. things need to be investigated and swift action needs to be taken. and importantly, we need to end the culture of complicity. we need to end the practice of looking the other way and it is not your responsibility, because it is all of our responsibility. emily: megan, discrimination is one thing. sexual harassment is another. what do you think about the criticism of the #metoo movement that it has crossed a line? megan: sexual harassment is rampant. and it is very clear from the brave people speaking up, many men are in shock learning how rampant it is. we really need women and men to come together and push forward. my sister-in-law, when she was a young engineer in the 1970's, used to have a "hustler" centerfold above her lab. she was doing chip design. that was normal. you open your book with the photograph that was, you

know this is the photograph , people were using to bench test all the different screens and it was a picture of a woman, , but actually it was a , completely naked woman from "playboy." when i was at google -- a story that you don't know -- i found out about this and i asked don eustis, who was head of engineering if we can stop using it, and he said of course. men and women can work together. none of us created that problem, but it is long-standing. you also write about ada lovelace. she was not even allowed to write a proper paper. the founder of algorithms. so she took a piece that she was 20 page piece she was translating and added a 55 , page thesis of what modern computing was. she is the founder of what has become computer programming and coding, and we did not even know about her. i had never even heard of her until i was at 10 downing street sometime and saw her

portrait. emily: i am so glad to here about that story and how receptive management was at google. you mentioned things companies can do. i'm curious, your work at shift7, what are the top three things that people want to make this a priority can do whether the companies are big or small? megan: yeah, i think what is exciting is there are very good things to do. for example, leaders, just talking about it. one of the greatest moves was lou gerstner at ibm prioritized this transition in the 1990's. he took those employee resource groups the lgbt groups, the , women's groups, the veterans group, african-americans, hispanics all these different , groups of talented employees and he connected his executive , team, which was not as thers, and he added it to agenda of the weekly executive meeting. a voice of many more employees was coming up. and then he asked those people , very specifically how to get

more employees, more customers, and more suppliers from your community and how i can make you thrive at ibm? it really made a huge difference. i think the move is a structured, broad conversation , and then look for what is working and share that and make that broader. emily: i appreciate sharing what you have learned with us. megan smith of shift seven, former cto of the usa. thank you for joining us and stopping by. megan: congrats. your book is fabulous. emily: coming up, day three of through,sus uber is and so is kalanick. we take a look at what went down in the courthouse and what is yet to come. this is bloomberg. ♪

emily: travis kalanick's time on the witness stand during the uber-waymo trade secrets trial has come to an end. during the second day the former , ceo of uber's testimony, waymo's lawyers went after him, painting a picture of someone

obsessed with winning the race for self driving supremacy. joel rosenblatt has been in the courtroom for the last several days. joel give us the play-by-play of , kalanick's testimony. joel: this is his second day. waymo's lawyers came at him kind of hard. not as hard as you might expect. and then of course on cross , examination, uber's own lawyers were asking him questions which were clearly, he was very well-prepared for. waymo, the big surprise was that waymo did not come at him very hard. they really -- there were a lot of details that waymo dug up over the course of this litigation that are very troublesome for uber. and they really did not ask travis kalanick about very many of those, and that was a bit of a surprise to me. emily: does that make you think waymo does not have that strong of a case? joel: initially i was kind of , wondering that, and then as i

state in the courtroom after travis kalanick left, you saw what was going on. travis kalanick offered a lot of kind of "i don't know's," "i don't remember" about a lot of the more difficult pieces that they asked about, as you predicted, emily. i should have taken a better cue from you. after he left -- i think waymo has just kind of figured out that is what they will get from him. and then after he left, a , forensic expert, a computer forensic expert that evaluated the case and the most damning evidence, came in and offered testimony about all kinds of data and the technical issues, technical kind of problems that uber had. it got very damning, very problematic, very quickly. it was kind of an interesting contrast in travis kalanick's testimony. emily: so what is next?

, hopefully, fewer "i do not recalls." joel: yeah, there will be fewer of those. it will be interesting. larry page is still up. it will be interesting. he is a very quiet person. he is a very quiet person. he has been a bit awkward. i think he has to kind of show up and be better in court that we have seen him, as a result of kalanick's good performance. it was a good performance for uber. now, we are going to see some very difficult evidence, and technical evidence, and we are going to learn just how deep into the weeds this jury is willing to get. i think that is the real question. it is always kind of a dicey proposition to guess what juries are going to do or what they are thinking. emily: right. joel: in my experience, juries have taken the effort to dig into stuff. if they do that, waymo is still very much alive. emily: ok. ok. joel rosenblatt, i'm larry page -- i am sure i'm larry page is preparing for this. thank you so much.

coming up, has the #metoo movement gone too far? our conversation with sheryl sandberg and her new call for action. this is bloomberg. ♪

bloomberg.watching i am tom mackenzie. checking in on the first word headlines from around the world. nancy pelosi says democrats in ant chamber won't back agreement without a commitment from speaker paul ryan for an open debate on immigration. she spoke for a record eight sealed aer they bipartisan deal for $300 billion in additional funding. the agreement should avert a friday government shutdown. china's foreign exchange reserves rose for a 12 straight month in january as the yuan strengthened. the pboc said the stockpile to 3.1 trillion dollars,

fractionally below estimates. turkey's prime minister has insisted relations with the west are stable despite what he calls huge disagreements over syria. president erdogan is reported to have told turkish media that barack obama light on the issue of syrian-kurdish fighters in the region. and that donald trump follows the same path. despite the tensions, simtech told bloomberg he is optimistic about relationships. >> turkey is not drifting away. turkey is not breaking up. i just want to make that clear. we have had -- >> relations with the u.s. do seem hostile? h ine had the rough patc general. i think the relationship with the u.s., largely, we have huge its agreements of what they are doing in syria.

>> i am juliette saly in singapore. checking markets midsession on thursday, and it is mixed on these asian markets. we had that data coming through out of china, where you saw imports absolutely surge in january exports. in china fallks for a third consecutive session. we are seeing a pickup in the indian market around 1%. japan's nikkei index looking strong, up .8%. technical indicators suggesting japanese stocks have been heavily oversold. the renminbi falling the most in 13 months. the trade balance was a little bit of a mess in china. -- a miss in china. you're seeing most of these asian currencies being sold off today. as have a look at some of the stocks we have been watching in the region. this company rising quite substantially on the hong kong lunch break. japan drilling has been falling after issuing a warning. dbs shares dropping the most

since 2010 after they saw their quarterly profit grow. when you look at the sectors, we are seeing weakness, in theory and energy stocks, up by .7%. overall, a very mixed session in asia. yousef. emily: back to our top story of the day. after a few wild swings, tesla stock pretty much unchanged. revenue beating analyst expectations. the electric carmaker moderated what has been a red-hot pace of cash burn. they took deposits for new electric semitruck. euro chief, david welch, joins us now. david, what do you make of the results? david: overall, more good news and bad. the loss was bigger than expected, that is -- that is not what tesla trades on. the cash flow, much less than analysts expected.

third what the street was expecting, which is good. the main thing everyone is looking at is the model three. is this going to start really getting out there in real numbers for people to buy and bring revenue in? they will be up to 5000 cars per week, which is half of their original target, by the middle of the year. you saw the shares bouncing around. at first, they got up five dollars to six dollars over the close. that is a good thing. sign they that as a are getting their hands on the manufacturing problems they have had. however, if you really dig into haveetter from elon, they not said when they will get the 10,000. if he is not going to give a that says they don't know when they are going to be able to get up to 10,000 cars per week. i was part of the bad news. he was fairly moderate on how he described demand for the model three and others. in other words, new orders and

deposits coming in. he said they were stable. this is a guy who was pretty effusive about his cars and how business was going. that says theyd may be cooling off a bit. perhaps buyers are saying "i like the model three, but until i hear that these manufacturing issues are taking care of, i might hold off a bit." emily: i want to talk about what is on the horizon. elon has talked about a two door roadster coming, a compact suv, new factories in europe and china. you know, what are you looking towards on the horizon in the near versus long-term? sheryl: you forgot a pickup auck -- david: you forgot pickup truck. that's in the plan. the roadster is being developed in stealth, so it sounds like they are further along than people thought. he talked about tesla, the company itself, being the first one to buy this commercial truck, the rig, the semi. and so, that tells you that that

is not too far off. he did not talk at all about the compact suv. he did not talk at all about a pickup truck, so that tells you that is further out. a lot ofy have got spending to do to get to 10,000 vehicles per week for the model three. he did say that they won't get to 10,000 per week until they get to 5000, but what he means is that they will not installing that capacity, additional expenditure. they have got to get the model three up to 10,000 per week and then they have got to spend money on all of these other vehicles. that tells me that, yeah, that they have got issues with, you know, paying for everything that they want to do near-term and long-term. i think the vehicles you mentioned are those that they are going to be working on. no deadline on any of those. i don't think we will be into serious production, 10,000 per week of the model three, until 2019. and you know, for the other cars and trucks beyond that, who knows? emily: bloomberg's david welch

in detroit. thanks for breaking it all down. sheryl sandberg has a new call to action in the wake of the #metoo movement, and it is all about getting more men to mentor women. ar initiative has published survey which says the majority of men are more uncomfortable working alone with women or somethingthem, sandberg calls on acceptable. we sat down for an exclusive interview to talk about her new mentor her movement, the backlash against #metoo, and more. take a listen. sheryl: now is a watershed moment. #metoo has shined a light on the need to end sexual harassment forever. that is critically important. it is important, as you write in your book, that we get more women into leadership roles. today, we are publishing a survey which says that almost half of male managers in the u.s. are afraid to do common work activities with women. it is the reaction to what is going on, men stopping mentoring

women. that is on acceptable because we need more women in leadership roles, and women have long less internships and sponsorships than men, particularly women of color. now is the time to invest more and women, not less. mentor her calls on all leaders to mentor women, but also to make access equal. our survey shows that a senior man today is 3.5 times more likely to hesitate to have dinner with a female -- junior female colleague than a junior male colleague, and five times less likely to feel that they can travel with a junior female colleague than a male colleague. we have to make access equal. if you're not comfortable having dinner alone with a woman, then do not have dinner alone with the men. have lunches and breakfasts with everyone. or have dinner but make sure everyone is behaving appropriately. what matters is that access for women as equal because again,

now is our time to invest more, not less, in getting more women into leadership roles. emily: you have shared your own experiences with harassment, a tablen your leg under a at a meeting, unwanted visits you hotel room, to where had to call security. 25% of the people in your survey think the reports we have heard so far about sexual harassment are just the tip of the iceberg. do you agree? what do you think is the next chapter here? feel fortunate that everyone i have ever worked for has been not just appropriate, but supportive. in my next sentence to myself, it's that that should not be lucky, that should be a basic. every woman and man deserves a safe and secure workplace. that needs to change. in order for it to change, we need institutional come along ranging change. we need -- institutional, long-ranging change. we need policies that when reports are made, things are

investigated him a swift action taken. safe, noictims to feel retribution, the legal support they need, the social support they need, and we need to really end of the culture of complicity where people can look the other way and not feel responsible. we are all responsible for what goes on in the workforce. more women, we need in leadership. it is not a surprise to figure out that organizations that have more women in leadership roles have lower levels of sexual harassment and better worklife policies and perform at a higher rate has more diverse teams perform better. in this watershed moment, we need to make sure that we really, really continue to invest and get more women in leadership roles. emily: some people have complained that the #metoo movant has gone too far, that some of the stories that have been cultured upbeat hold, and this is more of a public lynching. what you think? sheryl: the question is not if #metoo has gone too far, but if #metoo has gone far enough.

it cannot be a moment in time where people raise their voice. these brave women that have raised their voices one long-standing change, change that is not just for the day or the month, but for the years and the decades, and that means we have to have the right institutional policies, and those policies have to include due process investigations. things need to be investigated and swift action needs to be taken, and importantly, we need to and the culture of complicity. ofneed to end the process looking the other way and it is not your responsibility, because it is all of our responsibility. emily: the cofounder of twitter told me that he things if there were more women on the early twitter team early on, maybe online harassment and trolling would not be such a problem. they were thinking about great things that could be done with their product, not how it might be used to send death threats. my understanding is also that when you got to facebook, you started asking questions about the content policies, and that made well be why facebook does a

much better job of this than twitter. how do you think the internet might be different if women had been more involved in more equal numbers at building it early on? do you think might harassment and trolling would be the problem it is today? sheryl: the data is clear that more women in leadership roles in all industry have huge positive benefits. higher performance for those companies, better worklife policies, lower levels of sexual harassment. and i do think that women play an important role in looking out for some of the gender-based harassment that women have long faced. i think facebook is lucky because our leader, mark zuckerberg, take these issues every bit as seriously as i have, but do i think silicon valley would be a better place if there were more women running more companies? absolutely. i think every industry would be a better place if there were more women running more companies and more women in government. when we fought to get here --

women are 20% of the u.s. congress. and i think we often suffer from the tyranny of low expectations. i remember when women got 20% of 2012,ats in the senate in and all the articles were like "women take over the senate." 50% of the population was 20% of the seats is not a takeover. i need to make sure that in this watershed moment, we make the long-standing change we need. no sexual harassment ever for anyone, and investing in women so that women get their share of , the leadership roles. we are very far from that, but this is a moment where we can invest more to make it happen. emily: indeed, absolutely. that was our exclusive interview with facebook coo sheryl sandberg. coming up, how to fix the male-dominated culture in silicon valley. we look at the one group that may hold the key. that's next. this is bloomberg. ♪

emily: well if there is one , thing we have learned about bad behavior in silicon valley, over the last year, it is that it is not just about the people who crossed the line. it is about those who enable it. for prosecutors, the ends justify the means but can that , be an excuse anymore? a," i new book, "brotopi take a look at people who can have a bigger impact, the people who fund the vc's who fund startups. with me is my guests. thank you so much for joining us. limited partners are traditionally very press-shy. i have appreciated you and your colleagues speaking with me how lp'ss issue and

are handling it. i would like to go back to the revelations we have heard over the last year about bad behavior in the communities. as someone who funds the seas, how have you received me with of this that behavior? it likeve received almost everybody else, through the press, through social media, that has been the primary way we see it. has been shocking. it's been disturbing. that is the primary way we have received most of this information. emily: i spoke with your calling. she told me that of course she would love to see more women around the table, ultimately you guys invest on returns. do you think that should change? do you think maybe there should be more of a focus on who the people are versus what money you are going to get out of it at the end? >> so our primary mandate is based on returns, but diversity

has a role with returns. there are many flavors of diversity. it could be gender diversity race, or even background , experience. over the past few decades you , have seen the operating work diversity implemented where some firms have financial investors and people with operating industry experience. anything, in this environment, you are seeing more emphasis on gender. more today than ever before, there is an active discussion about bringing in more gender diversity and you are seeing it. we have a number of managers and up-and-coming investment professionals are primarily women. it is becoming more of a part of the dialogue and action behind it from venture capitalists out there. emily: historically, lp's haven't cared much about diversity. do you think, ultimately, your firm is the exception and not the rule? atul: no, our firm is not the

exception. we are focused on returns, but for a lot of limited partners, they don't fully get a sense of the type of behavior that was occurring in the industry. and for gp's particularly, if they didn't understand the consequences of such behavior, they definitely understand it today. and vc's, today more than ever before -- lp's more than ever won't tolerate that behavior. it is part of the dialogue may have with vc's. and you know, if there is ever an indication of continued bad behavior, i think they will get a very rude awakening that they will be able to raise capital -- will not be able to raise capital going forward. emily: i know you are invested into a wide range of funds, what kind of conversations are you having with them about this topic? atul: so, for many of them, they have established partnership groups, and the partnership group -- there is not turnover on a regular basis. where there has been movement is on the junior and up-and-coming

professionals, where there has been an emphasis on gender diversity. and for some of the firms that are newer in nature, more of a on bringing senior professionals that are female. with established firms where there is less turnover, there is less leeway, but they are active in trying to incorporate more gender diversity at junior levels, and at some point, those individuals will become partners there and someone else. emily: we have 30 seconds left. how do you expect funding to change over the next year given sort of the backdrop that we are operating against? atul: i think, going forward if , there is any indication of bad behavior or questionable behavior, there will be little support for those types of managers. where there might have been leeway before, there is no leeway going forward, nor should there be. it is not only top of mind for the general partners themselves,

so i am hopeful this type of behavior, given what we have seen over the past year, will be eliminated going forward. because, you know it is , unacceptable and should never have been there, and it is so apparent to everybody that it should not occur going forward. i am hopeful. emily: absolutely. ok. tul, thankky -- a you so much for stopping by and sharing traditionally not shared views from the lp community. coming up, our guest explains why facebook should change the business model and not for -- not rely on advertising. this is bloomberg. ♪

emily: in the latest episode, we sit down with elevation partners and silver lake co-founder, roger mcnamee. we talk where he thinks the social media giant is falling short. roger: all i am saying to facebook is "guys, you have won.

you don't need to have this kind of business model. there is a way to have a business model that is actually better." my point is i would like to spend $10 a month, and i would like to be able to control my newsfeed. want to take the ads out and make it more valuable to them, and have one version that is politics, one version that is family, sports, health and fitness, work related. being able to toggle through them and control things, and i want them to be successful and they can be. emily: they say they are hiring 10,000 people to handle the issues, whether it is fake news or abuse. is that not enough? is -- is itnly it not enough, it is irrelevant. you cannot fix this damage after the fact by having people police it. you have companies who make it a perfect platform for bad actors to abuse people. you only can fix this problem by

fixing the algorithm. emily: how so? roger: you're essentially had to change the business model. you have to make it so that anger and fear are not the predominant ways that people are motivated to act on facebook. again, without advertising, if you are not dependent on advertising or not as dependent on advertising, you don't need people to be addicted or fearful. emily: if they don't have ads then -- roger: i want them to have a subscription. name the price. you want to have ads for some people? fine. give me the option. what they are doing now is the lazy way out. these people are smarter and better than that. emily: what about regulation? roger: i think regulation is important. the way to think about this is that the most important thing is for the employees of facebook to

recognize that things have come off the rails and they have the power to fix it. emily: have you heard from mark and cheryl -- sheryl? roger: they have the power to fix it, but i suspect their lawyers have told them not to -- my point here is that i would love to -- the way you know when people have a problem and are serious about fixing it is if they reach out to their critics to understand the issues. i am sitting here and i understand that people would be mad at me. i really do. but i would have everybody asked the question, what is actually in this for me? ok? i mean, seriously. i don't need this. emily: if they don't do this, what you think will happen? is in our democracy extreme peril right now, and we don't have a lot of time to fix this. elections are coming up in november, and we don't have time to essentially safeguard them. this time, it is not just the russians you have to worry about. emily: that was silver lake co-founder roger mcnamee, and you can catch the interview tonight, 9:30 p.m. eastern time.

and that does it for this edition of "bloomberg technology." this is bloomberg. ♪

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