♪ emily: i'm emily chang, and this is the best of "bloomberg technology," where we bring you all our top interviews from this week in tech. coming up, the broadcom bombshell. why it went to the white house, and why it failed. plus, tesla's talent turnover, three senior executives hit the road just weeks before a critical progress report for the model three goes public. and lots chain seizes the spotlight at sxsw.

you'll hear from the rival later this hour. first, to our lead. it was supposed to be the largest tech deal ever, but now it is dead. broadcom's $117 billion hostile takeover of qualcomm has been blocked by president trump at citing concerns over national security saying, there is credible evidence that leads me to believe that broadcom, by acquiring qualcomm, might take action that threatens to impair the national security of the united states. so, what happens now? i spoke to brooke sutherland who covers industrial companies in new york and bloomberg's ian king on tuesday after the news broke. ian: it might drag on and of the ceo of broadcom was in the pentagon yesterday afternoon trying to explain himself. he was trying to find a way forward. a matter of hours later, the white house comes out and says no you don't, and that's the end of it. emily: so very unexpected. ian: we expected to go further.

emily: what kind of implications with us have more broadly on m&a? let's start with tech and the tech industry. brooke: i think the clearest signal the government is sending is that u.s. tech is off-limits to foreign uyers. this is not the first deal that has been blocked under president trump's administration because of national security concerns. if you will remember, canyon bridge capital got blocked by trump. i think the other more broad implication of this is that it's not necessarily china that is the problem here. at the end of the day, broadcom's nationality played a minor role. their primary push back was what type of company broadcom was. they were worried that broadcom would use cost cuts and and got qualcomm's r&d and that would hamper the company's ability to compete in the race for 5g. that has broader applications n m&a. that's what companies do when

they do large m&a. that's now off theconsidered a security risk, table and that means that people have to it the pause button. emily: is there any way forward? is it definitely dead? ian: they haven't formally given up and we believe meetings are on the way. emily: meeting with who? ian: we think they are trying to decide what is they can do. the only way forward for them would be a legal challenge but even then, according to what we have been told, the most they would get is an explanation of why. emily: what is the explanation of why? ian: they don't have to explain themselves. security concerns, that's the end. but broadly, they say we don't like the fact that we believe you don't invest in echnology.

that's a security concern. apparently, the definition of what is a concern has spread. emily: this administration has put over red flags about non-foreign takeovers. we are doing with that with at&t-time warner. talk about what this means for m&a in general. brooke: this administration is going to take a much tougher look at all types of m&a we are doing with that with which, is not exactly what we expected. trump pushes himself as his great deal maker but he's pushing back against deals. with time warner and at&t, it's a vertical integration deal. the two companies don't necessarily have a lot of overlap. historically, the u.s. hasn't looked at that on an antitrust basis. they have only looked at specific businesses with overlap. it seems like they are shifting the purview to look

at integration the way chinese and european regulators do. we have an expanding definition of what is a national security concern. you will only see that expanded further. there is legislation in front of congress that would allow them to look at real estate transactions and further define what a national security issue is to include technology and other issues. emily: qualcomm shares dropped. broadcom shares only slightly down. our executives at qualcomm in san diego celebrating? they still have a lot to figure out. ian: effectively, they won by default. the competitor was disqualified that it did not convince their shareholders to vote this down. going into that shareholder meeting which was canceled at the last minute, they were losing and it was looking like that board was going to be taken over by broadcom. they have a vote of no-confidence from the

management, and it's something they will have to address pretty quickly. emily: what are next steps? ian: they have to get the apple situation sorted. they are saying they don't want to pay technology licensing anymore. licensing revenue is importance for them and very high margins here that pays for the r&d. they need to get that back to get shareholders back on their side. emily: talk to us more about broader markets and how they might react to this bigger idea that the administration is not going to be friendly to m&a. brooke: i think one big question is qualcomm's other deal. we are still waiting for regulatory signoff from china for a deal. it has been more than 15 months. there is some speculation

among analysts whether china was purposely dragging its feet. now, i think this only feeds the fire. it'll be interesting what happens with that. given what these companies is based in bermuda, is that a national security risk? it opens the floodgates for all of these questions. it is something they have never had to consider. emily: what is next for broadcom? ian: qualcomm is an american company. they registered in singapore or tax purposes. they but these that were all american. broadcom come which they acquired was an american company. he's got a chinese name, his malaysian, but he's been a citizen of the u.s. for 22 years. he's had top security clearance. calling them a foreign entity is kind of a stretch.

the concern here is if the policy is to buy new companies, and to grow the mechanism, are they going to be able to do anything? emily: do you think they will appeal? ian: i have no idea on that. it's been a really difficult race to predict. emily: that was bloomberg's ian king and brooke sutherland. now to another top story of the week. goldman sachs has paved the way for copresident david solomon to become the next ceo. he will become the sole president and the other copresident, harvey schwartz, will be leaving. there is no timeline for the retirement of the ceo. we sat down with david solomon at the tech conference and talked about the tech sector this year. david: the year has set up in

a way where it should be very constructive for m & a and ipo activity. it picked up towards the end of 2017. we have a healthy ipo backlog. but we also have a lot of reasons why 2018 should be a pretty active year for strategic m&a in the technology sector. emily: coming up, our conversation with london's mayor about sxsw and his message to uber. if you like us, you can listen on the bloomberg radio app. this is bloomberg. ♪

♪ emily: whatsapp is throwing a new curveball into india's market. they are launching a new payment service where users can transfer money together. they caught fire after the paper currency disrupted markets.

india's payment markets could be worth $1 trillion in five years. in the u.s., sxsw was in full swing. they attended a conference in austin, texas. the mayor of london attended to drum up business for his city. speaking to bloomberg, con had stern words for companies like uber, saying they had to play by the rules if they want to do business in london. the mayor also explained why london is the place to be for technology. >> there are a number of reasons why tech companies and startups and tech giants come to london. the main reasons are access to talent. we have a talented population in london. we are investing in the next generation to have the skills for tomorrow. second is the capital. london is a place to come to an it is the political

capital, financial capital. also our ecosystem. also the proximity to culture, tack, politics, politicians, regulators. it explains why 40% of the world's companies have european headquarters in london. 40%. number two, by the way, is paris with 8%. london is a great city to start a business. it's going to stay that way. >> we've seen the likes of google and facebook investing. uber has been the one under fire under your administration. what do you need to see from the company for them to continue to operate in the ity of london? mayor khan: uber is a very popular service around the world. the idea of linking an app to

a taxi is popular. my message to uber and everyone, no matter how many lawyers you employ or pr experts, you have to play by the rules. if you play by the rules, of course you can do business in london. i want to have london be a place where disruptive and tech tech companies come. but you have to play by the rules. the good news is the global ceo of uber has a different attitude to the previous ceo. the noises coming from him and the language from him bodes well for the resolution of the differences the regulator has with uber. emily: that was london mayor sadiq khan. investors are lapping up blue aprons planned entry into brick and mortar. they say they will sell their prepare dinners in stores. no word on what they will cost but the wall street journal reports the kits will be

available by the end of the year. shares have dropped more than 75% since its ipo last june. coming up, the endgame. the sec accuses elizabeth holmes of outlying and fraud. when it comes to space rockets, elon musk is the king but when it comes to retaining talent, that is another story. that is next. this is bloomberg. ♪

emily: a former equifax executive is facing charges of insider trading. federal prosecutors announce that a grand jury has indicted him for selling off nearly $1 million of equity back stock before the massive data breach was announced. he allegedly received information and late august learning him to the breach, but the company did not disclose it until december 7. ceo elizabeth holmes has been accused of fraud by the fcc.

that's in addition to the two-year ban she was already serving. the lawsuit and settlement announced on wednesday detail how homes and her chief deputy lied for years about the technology. they used the publicity to fork over more than $700 million. you will recall that the company claimed they could run multiple tests on one drop of blood - but had to shut their lab. we go to bloomberg tech's elizabeth zaleski. elizabeth: a fascinating story and filing dropped today, accusing her of this massive fraud which she used the media and defrauded investors. if you step back and look at this company, she was promising that you could do hundreds of different test from the prick of a finger. it turns out you could not do more than a few dozen tests and there were using their

competitors technology. they made statements such that they would have 100 million in revenue in 2014 it was closer to $100,000. all sorts of bold statements. i think it is the symbol of silicon valley where companies feel the need to fake it until they make it and make bold promises and say those promises are a current reality. emily: i remember the customers who came forward saying their tests were wrong and were talking about medical tests about one's health. what is the scale of fraud that holmes is believed to have committed? max: i think that's something that gets forgotten when you have such a long, financial fraud-focused investigation. this company in addition to defrauding investors also ran what amounts to at the very least a badly run if not fraudulent company promising something they couldn't deliver.

they went on to void a bunch of blood tests that people may have made health care decisions based on. even though this sec investigation is settled for elizabeth holmes, this may not be the end of the story for her. there may be criminal charges filed as well. emily: i vividly remember when the wall street journal published its first investigation of elizabeth holmes in october 2015. she appeared at a wall street journal conference to respond. take a listen to what she had o say. >> i read what was written in the article. we disagree with it and think it was false and misleading.

i know what we have done which is the decision to voluntarily work with the agency. we interact with them all the time. we have chosen to take a path that is hard and i believe in it incredibly strongly because the right thing to do. i personally, in arizona, worked very hard to change the law to allow individuals the right to order lab tests directly and i can't do that without knowing the tests that are offered are of the highest quality. emily: the sec has said as a result of this investigation, innovators who seek to revolutionize and disrupt an industry must tell investors the truth about what technology does today, not just what they hope it would do someday. olivia, what is the sec saying here? olivia: this is a huge statement coming from the sec which usually doesn't make such bold pronouncements. they are saying, we are keeping an eye on this and using it as an example for larger unicorns to let them know they are not going to get away with making false tatements. emily: the penalty here, walk

us through what the penalty is, does it seem reasonable? max: i was a little bit surprised. it's severe in certain aspects. she has to give up a large portion of her stake in her company. she won't have voting control. it's only a $500,000 fine personally and considering the scale of the fraud, they raised $700 million while misleading investors, it really seems pretty surprising that that is all that is happening. especially we have a recent point of contrast with martin shkreli, and he got seven years in prison for what the government ended up pegging was a $10 million loss for investors. this may not be the end of the story. emily: what is it mean for investors? olivia: this is an interesting question. i think we'll see more

lawsuits to come. one of the most interesting things we're going to watch for here is that elizabeth holmes is one of the company's largest shareholders, so she is one of the largest investors herself. she is the victim of her own fraud. we know at this point, she needs to return $18.9 million to investors, but that is just a tiny portion of the $700 million she has raised. i wouldn't be surprised if there are more lawsuits and various investors go after members of the board and other people that may have known what was going on at the company. emily: it's unclear how much the company is one of egregious example, or whether other biotech and health tech companies are pushing the boundaries in a similar way. what is your sense of that and whether there will be wider examinations or wider crackdown on other companies in the space? max: i think i come down on the side that this was an isolated, if not isolated,

definitely egregious and unique example. they operated in a regulatory gray area for fda scrutiny and approval for lab tests is not quite as rigorous or consistent as you might get for drugs or other things. i think there's still a lot of interest in the sector for companies that have a better track record of explaining what they do and how they do it. as opposed to this company, which was a lot more secretive. i think you will see a lot more scrutiny and a higher level of diligence, especially in the case of investors who weren't really subject matter experts investing in something that was complicated and scientific. if you want a recent example, one of the biggest recent health tech private investments was in a company that is trying to develop a blood test for cancer. there are still interesting signs to be more careful, and people are going to invest, but they're going to be more

careful in the future. ♪ emily: olivia zaleski and max gleason. after conquering the usable space flight, elon musk is getting ready to take on comedy? after finding himself and tesla the but of some satirical headlines, such as elon musk offering grants to any project that will make them feel complete, musk has been hiring staffers and writers from that same satirical website. no word on whether the comedy project will make its debut before musk gets us to mars? when it comes to shooting a rocket in space and landing it back on earth, for musk, not a problem. but getting the model three out the door and hold onto tesla executives, not so

much. tesla has lost two more financial execs amid reports of quality issues with the model three, which continues to face production delays. what can he do to get them fully charged? we spoke with max jackman in new york. max: i think it is important to point out that the tesla is not a normal company in any sense. elon musk is a very hands-on manager. he has a reputation for being

a hands-on manager, and there's always been this kind of thing going on. we were sort of warned about this. musk has been talking about production hell and even discussing possible circles for production hell they might be in. the idea that you are losing some executives, that makes sense as a sign that it's happening. on the other hand, this is going to be a huge uphill climb and if they are not able to keep people in that factory or managing the factory or running the business, that's going to be a huge problem for the huge numbers they want to get to by the end of this quarter, and later in the year. emily: bloomberg has built a tesla model three production tracker. how is the company doing? max: all credit to our colleague, tom randall, on this. basically, we think that based tesla on the venn's they have been putting out there that customers have been reporting to us in getting from the government, they are doing about the 1000 or a little less than 1000 a week. they are supposed to be up to 2500 by the end of this quarter. there is a long way to go if you believe our model. we don't know how good the model is, but it's a slightly discouraging sign. emily: that was max chafkin. coming up, dropbox scales back ambitions.

the cloud company vowed to raise $648 million in an ipo, giving them a valuation well below the $10 billion it snagged in private fundraising. this is bloomberg. ♪

♪ emily: welcome back to "the best of bloomberg technology." i'm emily chang. the first major ipo tech of the year is upon us. we have more details around the listing this week. dropbox planning to go public at between $6.7 billion and $7.6 billion, well below what it clocked in during the last private funding round. we have the details from alex who first broke the news on the plans. >> dropbox told wall street their marketing shares are at $16 to $18 a share. they are hoping to sell within that range for the initial public offering. that implies a market cap, as you said, about 25% below the $10 billion valuation they clocked in their private

funding round. why is this happening? what i've heard from a lot of people is that today dropbox raised money at a time when valuations were really high. perhaps a little bit too elevated in private funding rounds, it and now they are trying to take their salt. if you look at the last few years, it's actually fundamentally improved. they have gotten positive and closer to profitability. revenue is growing at 30%. some of those premiums, for perhaps the fomo premium, are not something public market investors want to bake into what they pay for the stock. emily: a couple other interesting details. they also privately agreed to sell salesforce $100 million in stock. they also announced a reverse stock split for current inside investors, meaning those investors won't be as diluted. explain what this means. alex: the dilution is to maintain that the employees in the existing investors hold the rights that they had

before hand. the salesforce investment is really interesting. this is a concurrent private placement that means at the same time they're doing the ipo they are selling $100 million worth of stock to salesforce. this comes on the heels of an announcement last week that salesforce will integrate dropbox products with the salesforce customer relations management software. they can upsell each other and integrate the products. not only is it a partnership, now it seems that it's clear that salesforce does have some skin in the game with his large stake. it's akin to what we saw with comcast taking a big stake in snap when it listed about a year ago. that happened after the ipo. interesting move here from salesforce pairing up with dropbox financially. emily: we had the ceo on the show last week. this was of course one of dropbox's biggest

competitors. i asked him if he is concerned about dropbox. this is a company that's bringing in more money than box. take a listen to what he had to say. >> dropbox's numbers are tale of two types of companies. one is a consumer revenue business. and then about a third of the revenue is business-to-business. that's the only part of the business that looks anything like box. our revenue tilts towards midsize companies and large enterprises. emily: would you agree with his take that they don't compete as much as we seem to think? alex: currently, that seems to the case. only 11 million users pay at dropbox. they have not completely laid it out, but it seems like those are the enterprise accounts. one of the big differences is that box has a concerted sales effort and dropbox doesn't. 90% of their revenue comes from self service and you sign up for the products you pay for. that's the difference. i know they are competing but it does seem he and his company have been focusing on large accounts while dropbox is pushing for the guerrilla approach, land and expand and get in with some teams internally have the big companies and try to figure out how to sell across the

ustomer base from there. one of the big differences is that box has a concerted sales effort and dropbox doesn't. 90% of their revenue comes from self service and you sign up for the products you pay for. that's the difference. i know they are competing but it does seem he and his company have been focusing on large accounts while dropbox is pushing for the guerrilla approach, land and expand and get in with some teams internally have the big companies and try to figure out how to sell across the customer base from there. emily: thanks to bloomberg's alex barinka. spotify's public debut, they are bucking convention with a plan for a direct listing on the new york stock xchange. caroline hyde spoke with an early spotify investor in london. >> i think spotify doesn't really need to raise

money. it's a company with lots of cash. they are also a very well-known brand. i think this is rather unconventional, but it really serves the company's purposes. caroline: up against competitors such as apple, which have phenomenal amounts of cash, why go public at all? >> i think it really starts with a relationship with the consumers that are using the product. spotify has, since the launch ack in october 2008, consistently been one step ahead of competitors. they have been extremely good at surprising customers with roducts and suggestions, playlists, and duration that is curation that is heads and shoulders above what the others are doing at the time. apple, which is probably what everyone is thinking about here, they came to the market

uite late. they bet on downloaded as being the predominant way to deliver music and it turned out that was the wrong choice to make. they came too late to the party, consequently. caroline: you think spotify will always be able to remain ahead? we are looking at voice assistants as a way of consuming music. i use my google home. we have speakers coming out from apple as well. are they not putting up roadblocks to allow a seamless use of the spotify? >> it could be a change in how people want to consume their music with voice assistants but spotify is one of the skills of alexa. it's functioning really well there. we see no reason why it

shouldn't be in all the other devices. that has been one of the hallmarks of spotify's success that they have been ubiquitous in every device there is. there is integration that spotify has. caroline: they don't need to tap the market now. they can list in this novel way. why come to the market now? what is driving them? >> it is fair to say the founders early on understood this was a capital-intensive business and they needed to rely on the private capital markets. they raised quite a lot of money over the years. the underlying promise to most of those investors is that at some point in time there will be a liquidity event. when you're building such a

phenomenal company as spotify, the best way to get to the point is through a listing. caroline: so you will be sellers on the first day of trade? >> we are owners for 10 years and this is a fund that is in the very latest stage of its existence. it's natural that we will, at some point in time, exit our position there. it can be done in various ways. one is to sell and another is to distribute our shares that we hold to our fund investors. we know that quite a few of our fund investors are really intrigued about the long-term prospects of spotify and, consequently, that could be a very well functioning option as well. caroline: what price would you have to see for spotify to exit? >> it's hard to say.

they're obviously many good comparables and peers that you can peg spotify against. caroline: like who? >> netflix is a pretty good one. caroline: the think it's a that valuation, you think? >> in other similar growth margin. spotify has a stronger growth rate. it is international. it has a massive amount of subscribers. i think what is perhaps even stronger with spotify is that it's a much more cash efficient model. spotify gets paid on day one for the subscriptions and they don't have to fund entire productions like netflix does. consequently, the cash required to run the operation at spotify is less. caroline: you talked about how

this is a liquidity event which investors such yourself need. what does it mean for the liquidity event mean for the european tech ecosystem? >> i think it's phenomenal that we have the biggest listing ever of a technology company now happening and coming from a small country up north. it has really fueled a dynamism of the stockholm ecosystem that during my 22 years as a vc has really surprised even me. there are lots of companies now springing up in the shadows of spotify and a few of the other big players. that consists of people who have have gotten there first experience with these great companies and spotify is probably the biggest and the inest of them all.

caroline: will we see these istings be copied? we see other people take the same route? >> very few companies could match the kind of branding required, so i think goldman sachs and morgan stanley can still see good business ahead. emily: that was caroline hyde. one of the world's biggest investors wants the board to end talks with dell about a merger. they argue it would be a terrible deal for the company and shareholders. michael dell on's vmware his namesake company. he's trying to bring all the pieces together of his empire under one publicly traded

roof. coming up later, the majority of the venture capital in the u.s. is funneled into companies and new york. the midwest may be the startup world's new darling. we hear about one bc in colonus ohio is a silicon valley is no longer where it's at. we had back to austin and sxsw and talk with the cofounder of the world's second-largest cryptocurrency. this is bloomberg. ♪

♪ emily: yahoo! could be on the hook for a hack. a judge has ruled that victims of the data breach could seek damages because yahoo! execs didn't do enough to protect in sumer's given what they knew about the breach. yahoo! reached an $80 million settlement with investors. now back to our coverage on sxsw in austin, which would be complete without a spot on lockchain.

we talked to a man who aims to build tools and apps that enable to have a decentralized future through blockchain that is perhaps best known for founding he explained the blockchain's another ryptocurrency. role at the festival. >> we hadn't event where he had 4000 or so people in ttendance. we are running a lounge. we have right now a women in blockchain event going on as we speak. we have had vince and steven woolfe from of mathematica fame and a full slate over the last few days. also, walking around, being all the different events around the area, everyone is talking about blockchain either in the event or just peripherally. >> to what extent are they not really highlighting bitcoin?

the bitcoin bubble has seemingly burst even as there's a lot going on once you check out the action from the other platforms. and look into the demand for blockchain cryptocurrencies at large. >> it may be hard to tell because we are focused on building on the platform. we are so much lest focused on bitcoin. i consider it to be a crypto fuel that powers decentralized applications but i would argue that we have seen a correction in our space but calling the bubble to have been popped is a little shortsighted. i think there is tremendous oundational fundamental work being built in our ecosystem and it's very early days for the ecosystem.

>> throughout the first several quarters of 2017, we saw on explosion of initial coin offerings, many built to run on top of the network. there's been a lot of anxiety lately, about a regulatory crackdown and the status of many of these coins. how much does that threaten the interest in it. if one of the main applications of it is understood much regulatory crutiny? >> we are extremely happy about how things are going globally with regulators. there are many different jurisdictions that are excited about tokenized securities or utility tokens that would be not considered securities. that's true in this country as well in the united states. there are many great applications being built worldwide with other blockchain and technologies. but there's many bad projects in many fraudulent projects so

is perfect a reasonable for a bit of a pause in our ecosystem. it's important, i think, for many projects to do their legal homework and issue tokens properly. >> you talk about all the projects launched on it. you describe them as promising. the underlying platform is still not particularly robust with respect to scaling. a few months ago there was a collectible card game that brought the whole thing to a halt. what is the timeframe for launching something without slowing down the network? >> it is remarkably robust with respect to security and drug history software developers have in pushing the bounds of scalability for all platforms. we have traded high transactions for the new trust infrastructure that enables better collaboration. we are seeing technologies like state channels.

we're seeing technologies like plasma that will ramify in the next few months. the cryptocurrency application was one excellent test showing us where some of our clients were weak and some of those issues have been fixed already. short-term, there will be some excellent fixes in 2018 over the next two years. were going to see dramatic skill ability increases. emily: that was the cofounder of consensus speaking to bloomberg from sxsw in austin texas. still ahead, a new frontier for venture capitalists. why start up investors are looking harder at america's midwest. this is bloomberg. ♪

♪ emily: more than half of all venture capital in the united states goes to companies in california alone. but is half of all the innovation in the u.s. happening here? enter an ohio-based venture-capital firm. drive is now on its second funded through in a million dollars and is invested in 29 companies to date. chris olson, the cofounder, joined us from columbus, ohio. chris: i think what we're seeing is they have dramatically exceeded our expectations. to give you some statistics, when we first got here, we did no harm the companies we see on the year. we saw about 1800 companies on the year. last year, we saw about 3500 investment opportunities coming into drive. these are inbound referrals of midwest companies. hat compares to what a

typical silicon valley would see at about 4000. we are not quite silicon valley, but there's a lot more here than even when we first anticipated. emily: leaving silicon valley for l.a., calling it toxic, the new york times just did a big story about silicon valley vcs visiting the midwest. you agree or disagree? chris: i don't know that silicon valley is over. the amount of $50 billion or so that gets invested into bay area companies from the venture world on an annual basis, to see that's the end, i don't know how that happens. what i do see is what is happening out here is just starting. what we are seeing today is a thriving ecosystem of lots of technology startups with real innovation. entrepreneurs and founders

that are creating next generation technologies and agriculture, all kinds of things and robotics. it's hard for me to look at what is going on here and seeing anything but the frontier of innovation. i'm seeing this emerge and catch up to what was started in silicon valley. emily: is the investment going to california and new york, is that a mistake or misallocation of capital? are companies in the midwest just coming into their own and going to garner a larger share of the investment going forward? chris: i can only tell you what i see in our portfolio, which is our companies are raising more money. if i look at our portfolio now, we have raised about half $1 billion of capital from the coast. venture firms from silicon valley, and new york, they're flying on airplanes, coming here, saying they would rather invest in these companies in the midwest than those in my

backyard. that's a new thing and it's a growing number. the number for us continues to double on a year on year basis. it's inevitable that more of the ec are going to start staying here. what you will find is that more founders will get more capital and the efficiency of the capital go so much farther. we've also seen a lot of technology companies that start on the coast, they are moving their businesses here. we have seven companies in our portfolio that have moved here. i think this a trend you're going to read a lot more about as his companies get bigger. there going to be more the newspapers and they have been in the past i think people are paying more attention. emily: hiring talent must be a huge hurdle. you hired your first female partner. what is the argument to move there, aside from its cheaper than most the town is on the coast? chris: cheaper does not help. the midwest as always been

cheaper than the coast. it's always probably going to be that way. the only reason people should move here and join jobs in midwestern technology companies is because they believe this is their opportunity of a lifetime. if you are somebody who is highly skilled and highly technical, and you are somebody where you can have the opportunity to work in any place you could work and planet earth, you're going to choose to go the place for you personally have the best opportunity. people measure that in different ways. one of those is in impact an individual can have in these companies. we have seen a plethora of people from companies like twitter and facebook and amazon, google, go down the list that are joining the senior leadership of our portfolio companies. those are great. but there's also an awful lot of people in these midwestern cities that are now trained as

engineers who have a fundamental understanding of these industries in which they have been working and if they apply that to what is now a west coast approach to uilding startups, they can really unleash a lot of potential. we are seeing that if we have 1800 people in our portfolio, that's up from about 900 a year ago. the number will probably double again this year. access to talent here has been a lot easier than it is in markets that have a lot more startups that are competing for that same level of engineers in that same level of senior managers. ♪ emily: thanks to chris olson with drive capital. that does it for this edition of "the best of bloomberg technology." we will bring you all the latest throughout the eek. tune in this tuesday when we speak to facebook vice president for the ema region. remember, all episodes of bloomberg technology are live treaming on twitter. check us out weekdays.

that's all for now. this is bloomberg. ♪ mom, dad, can we talk?

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carol: welcome to "bloomberg businessweek." i'm carol massar. jason: we are inside our headquarters in new york. carol: what is new about the leaders on wall street. jason: plus, the hottest local economies across the country. carol: and amazon hitting its prime. jason: all of that is ahead on "bloomberg businessweek." ♪ carol: we are with the editor in chief of "bloomberg businessweek," joel webber. and a very timely story that looks at succession planning