the ideology of the court and the idea of a partisan battle. does not carry over to personal interactions of supreme court justices saying they like to eat that they like to eat meals together, and occasionally get a drink together. ginsburgr t commented that when someone has a birthday, they toast the birthday boy or girl, and seeing happy birthday. she said, it is not pretty, most cannot carry a tune. guest: justice scalia used to say, i don't attack people, i attack ideas. they have to get along. it is an arranged marriage with mar divorce.y for

that is true on the personal side, does not always carry over to decision-making. singing, justice scalia was also known for his singing. .p next, we have brian calling caller: my question is whether or not i would like to hear your thoughts on whether what the isublicans are doing constitutional. my reading of the constitution is that the constitution shall the supremees to court. it seems unequivocal. to follow that the advice of the senate cannot be to not nominate someone. the defense therefore cannot be

never. i would like to hear your thoughts. guest: that is one reading, but one.he generally accepted if you need the sentenc senate's consent, they can withhold the consent or withhold it wholesale. it not be pretty, but probably what the constitution envisions is political accountability. if people are not happy, they office. them out of host: what are the chances that there be a hearing or any other action on judge garland's nomination? guest: i'm not an expert and legislative congressional stuff, by take the republicans at their word that they will not do anything until at least the election. od,re is a lame-duck peri

and should hillary be nominated, they should accept merrick garland who is both reasonable and also old. host: let's talk about what is still remaining on the docket in this term for the end of the month when the final decisions come out. abortion, affirmative action -- guest: those are big cases. affirmative action is back for a second time. it is a challenge to the ' admissionsf tec texas plan. that is a case where interesting interestingly, justice scalia's death a limited at the possibility of a deadlock. it means we will get a decision. on the other hand, the court may be wary on making a decision on

something as important as affirmative action with only seven justices participating. that said, i would not be surprised if justice kennedy writes a fairly narrow decision that says what texas is doing, which is idiosyncratic, and i will not get into it, is no good, but perhaps not doing any damage to affirmative action across the nation. host: our next caller is lydia from illinois. caller: first, i have a point, and then the question. west of all, i believe that are in a serious condition of denial which could be demonstrated by the word, "oversight."

one side is attention and the other site is in attention. both of them are in the dictionary as valid definitions of that word. also on junent is 15, the magna carta last year, was800 anniversary obviously not recognized in this country. because that is the cornerstone of our legal system, that needs .o take place host: you said you had a specific question. can you get to that? you know, on the magna carta, i think i have a slightly different recollection because i

went to a beautiful exhibit at the library is the target with a ceremony in which the chief justice of the supreme court participated. there is a through line in it in the constitution. host: you wrote of out donald saying that scholars are worried that the rhetoric on his recent attacks in the trump university case and also his valid to open up the libel laws make it easier to go after your folks like you and i. talk little bit about that. guest: i have this idea that we should call around and talk scholars -- people who may

be inclined to support the republican nominee. what i got back was a uniform thee of dread about separation of powers are a crisis.or the this is someone who does not take seriously the foundational legal concepts. these are people who think that maybe president obama made even far. has gone to they say to hear donald trump .alk, it would be much worse i was surprised by how hard and uniform that point was. i should say that trump talks a lot and talks loosely and does not have legal training, so it is a little unclear what he

means to be saying on a lot of these points. even the republican leadership disagreementsome on this. it is congress, the courts, the press, but at least some people think that as a practical matter the legal branch has so much practical power on personnel and to military, if mr. trump is be taken at his word, there is cause for concern. host: at the same time, he released a list of potential supreme court nominees, and it the likes ofisfy conservatives on this list.

guest: almost everyone on the right thinks it is a great list. they are not sure they can trust trump. it is not exclusive. there may be other people he has in mind. there also -- i'm not sure what you think -- if you asked donald trump why diane sykes is on the he would not give you a response. host: our next caller is on for adam liptak. caller: i just want to say that i completely agree with the gentelman who called before about these people being anti-constitutionalist. this is absurd. this has never happened in our history. judges have ever been appointed -- have always been appointed whether the president was on the way out or not. as you said, they are all upset

about executive orders. what was the man supposed to do? sit around and do nothing all of this time? that profoundly upsetting these folks would do this. interestingis an perspective. it is probably a political point that i should stay out of. host: x, we have alley calling ali- up next, we have calling in. caller: the last caller touch on what i wanted to say. one thing i wanted to comment about was the fact that our founders set up the supreme tort to be nonpartisan, guard the constitution. it has become so political.

basicallyes are now agreecians and i don't with everything that they do. considered the united states. that is pretty much all i had. host: let me ask you this. the supreme court is set up to be an apolitical branch of the government, but they have always been involved in politics. right? they have always played a role in the cases that have been .ecided thet: all it does is allow court to affirm people with life tenure, a life sentence.

don't vote politically all of the time are most of the time. they are unanimous most of the time. 5-4 about 20%oes of the time. whereis a subset of cases it is hard to think there is going on.ut politics: liam up next, we have calling from north carolina. you are on with adam liptak. caller: yes, i happen to be ay.acial and also g i'm independent, but i'm going to vote republican this year. there are a lot more people like me out there. mrs. clinton needs to get used

to that. i have studied american history my whole life. i take things seriously. i check out both sides. that is why i am independent. if this were the other way like back in 1992 -- they would do the same thing if it were the other way around, all of these democrats colleague and , crying. it is ridiculous. i love to watch this fight. explodings are because of mr. trump. i don't even like the man, but i would vote for him over anyone like this is clinton. guest: it is a very good thought experiment, what would happen if

the shoe was on the other foot or if the democrats controlled the senate or the appointment which shifts the balance. i think the caller is right that the exact same thing would happen. it is quite rational for the party to want to put someone on the court that they like to serve for 20-30 years. we don't know. it is hypothetical. let's talk for a moment about cameras which is a perennial issue. there was a report on supreme court transparency and some of the things that they do. they do not allow cameras in the courtroom. they released recordings later in the week of proceedings and transcripts during the same day.

do you think ever be allowed in the supreme court? guest: not anytime soon. the report you mentioned does courtslots and lots of in the u.s. that have cameras. it works just fine. citizens inis that a democracy ought to be able to see the government at work when they are making a public session. they line up for days to see a supreme court case, which is deeply troubling. they are afraid that people will take soundbites and put them on youtube or late-night television. there have been, even without cameras, protests in the courtroom lately. i think the only fear that cameras would encourage people to do that thing.

i think the case for cameras in the courtroom is as a practical matter is going backwards, not forward. taking apan has been very active role pushing for camera access in the supreme court. you can learn more about that on c-span's website, c-span.org. a little more about what happens inside the supreme court. the solicitor general announcing that he would be stepping down this week. argued a lot of cases, including the big health care case. talk about his career. guest: here is someone representing a democratic administration with the supreme completelyt dominated by conservatives. he helps to persuade the court

same-sexish a right to marriage. this is someone who got .riticized and beat up it turns out that even though there is a mixed record and the court can be skeptical, he turned out to have a very good run. host: we are speaking with adam liptak, the supreme court correspondent for the "new york times." attorney,covering like myself, and also worked in the legal department. we have bob on the line. good morning. caller: i want to ask a question. what with the supreme court say president ordered a

citizen of the united it's killed in a foreign country without a trial? guest: we don't know, the case has not gone to the court. it is a very hard case. i would start thinking that they generally defer to the executive branch on anything dealing with national security. that would start the conversation in favor of presidential power. this is off-the-cuff. you would need to know a lot before you make any prediction about the case. it is an interesting question. host: one case we are still waiting for is the decision on the presence immigration orders. is it anything that we could read on that? but ani have a sense, intuition only that the court will find a way to sustain the in the roberts

court, which you think would be totile, might find a way sustain it. i cannot back that up with evidence. whatever you can say about this program, the state of texas does not have standing. that is a point that the chief justice often adopts. while i say i have this intuition, i really do not know where the case is going. host: we are talking next to ann from montana. you are on with adam liptak. yes, i want to ask about the citizens united thing. how can that be changed?

congress could change it, i imagine. guest: actually it is a constitutional ruling. it.ress cannot change constitutional ruling. moreess could order exposure are more spending, but you would need a subsequent ruling to change citizens united. we have heard the candidates say that is something they would like them to do. host: are you surprised to the extent which -- i know the vacancy has changed a bit -- the extent which the vacancy is becoming an issue on the campaign trail? citizens united is one point that was brought up on the campaign trail. guest: maybe i would say, but it

is because it is all i think about, it should be a bigger issue. there's nothing more significant than who of president appoints to the court. we have several justices who are older, and the next president may well appoint not one, but three, or four justices. the power of the supreme court on the major issues of our time is enormous. people might want to talk about it more and not only in the context of merrick garland, but in a larger sense. host: next, we have sheila calling on the republican line. good morning. caller: good morning. host: you are on with adam liptak. caller: i have a question. cnn manystened to times, and it has been more than one -- reference i'm not pointing out just president obama -- it has happened before,

and will happen again that presidents have overstepped their boundaries. our founding fathers wrote the constitution. the laws, wetepped are a nation of laws, are they -- aren't they breaking the laws? guest: if they do, they are. executes the laws, .oes not make them and many, not all cases, someone can go to court, and challenge them. host: we have seen an increase in these cases making that claim . is it just because it is reported now because it gets more attention? we talk about the immigration case and the claim that the president overstepped his bounds on that and a number of other issues. is that on the uptick?

guest: i feel that the states are much more active and challenging lots of lots of things that the obama administration does. about transgender bathrooms -- all of a sudden, you see 15 states file suit right away. attorney general of texas day, het he does every goes to the office, and sues the government. there are certainly more. jim, you are on with adam liptak. voice sayheard your live in a democracy. that is the confusing part to the american people. we have lost our

education in this country. people do not even know what a black law dictionary book is. the definition of a gavel is just a collection of rent and money. we still say we have african-americans, mexican-americans -- we are americans, we, the people. host: do you have a question regarding the supreme court, specifically? caller: the supreme court is supposed to protect we, the people. you know,to protect -- where are we getting separated from? we are being separated. host: do you have a reaction to that? guest: that is an interesting perspective. i always think, if you ask people 10-20 years ago, whether things have gotten worse, whether people used to know more

stuff, it is easy to think that the past was better. jule: up next, we have a calling in from florida. you are on. caller: good morning. i was calling in to find out about -- we keep paying people to do their job. we don't get paid and do our job in the public sector. i was calling to ask you about why do we have to have nine judges and not three judges? also, hello? host: you are still on. caller: also, does it cost extra money to keep fighting these ?ases over and over again does it take money out of the taxpayer budget to keep fighting cases the keep going on and on? guest: a couple of things there.

there's no special reason why it needs to be nine justices. congress gets to decide. there have been courts with 10 justices on it. for a long time, we have been at night, and it seems to work well. when you get stopped at the supreme court, you probably want more. the second question is is all of the litigation expensive? .he answer is yes and no if you'd in isolation, pity expensive. viewed as part of the federal budget, miniscule. .ost: it is not inconsequential we have seen millions of dollars of legal fees. guest: modern litigation, as we lawyers, cannsive turn out to be a lot of money. host: up next, we have michael calling in from celina, ohio.

you are on with adam liptak. caller: i have three questions for you. are you there? number one, the supreme court judges should not be for life. be for only 10 years. i am a physician. their mental faculties should be judge when they are 80. they are not gods. guest: that is question one. caller: number two, on obamacare, i am a physician, healthy, and retired. go to a v.a. hospital, and employees who are not military, there is this and question again about small they should be

evaluated by groups like on, the president of the united states, or be voted on during presidential elections. host: let's give adam a chance to unpack that. guest: there was a lot going on there. let's start with the interesting point you started off with which is should supreme court justices be appointed for life and served as justice stevens did until he was 90. the cottagers and does, in effect, require -- allow lifetime appointments during good behavior. it would require a constitutional amendment to change the state of things. we are, around the world, quite distinctive in this process. most courts around the world limits.ed

if the framers knew what the life expectancy for a to be, they might have thought differently. that is not to say it should not be long-term. you want to have judicial independence. if we were to start from scratch, that might be a good idea. host: is there a concern or possibility that by imposing term limits, even if they are 18 years, but you can count them out in terms of what administration might get them might make it more likely for a court to take a case or declined to take a case? an interesting point. i think can think of analogous situations where justices time their retirements, an interesting way to show there is

a political element. they retire under presidencies whose views they favor. i don't think justice ginsburg trumpretire during a administration. host: we have bob on. it seems like a way to minimize the life term things that requires a constitutional amendment expands the supreme court to maybe 21 members. am i right that it would simply need an act of congress? guest: you are right. you're not the only one to stop this. courte to be known as the packing plan. soundlyticular plan

rejected it because it was meddling in the affairs of the other branch. host: up next, we have robert colligan from the method, georgia. you are on with adam liptak. caller: i suggest you use the word ideological as opposed to political in describing the court. as you pointed out before, these are very difficult issues. i am an attorney. i have been trained, as we have, to look at both sides of an issue. not everyone concludes equally on things like search and seizure, privacy, so on, and so forth. that is reflected in this election cycle. there are people who have, i hope, honest, but different views on these issues. it is no surprise that on these very difficult issues, nine people appointed by president of

different philosophical ideologies, and yes, political, will have different ideas. when you use the word political, it suggests that there is something wrong full of foot. i believe we had nine very thoughtful, bright people, and i respect the analysis that they go through. that is what is missing when people call the court decisions political. guest: i do not think there is a lot of daylight between ideological or political. it is true, i don't think the justices are partisan politicians in terms of what is the democratic party platform for the republican party platform, and that is how i am going to vote. no matter what term you use, the

you can use to get words, and that is fine. i don't mean to suggest that the judges are acting in anything but perfectly good faith. they believe what they are doing and would call the judicial philosophy. the caller calls it ideologies y. i don't think political is a bad word. eachare bumping up against other. host: coming up sunday morning, several presidential primaries are held this month, "washington post" columnist stewart rothenberg and nathan gonzalez, elections editor for roll call talk about key 2016 house and senate races. and the impact of the presidential campaign on those contests. then dr. ezekiel emanuel, medical ethics and health

policy chair at the university of pennsylvania, on how antibiotic resistance is leading to what he calls inevitable superbugs. and how to slow down this development. and peneil joseph, author of stokley, the life, talks about the rise of the black power movement and the influence of ivil rights activist stokley carmichael. watch washington journal beginning live at 7:00 a.m. eastern on sunday morning. join the zucks. -- discussion. >> now a look at the economic state of silicon valley with technology investors and venture capitalists. this was part of the annual techcrunch disrupt conference in new york. it's 25 minutes. >> i'm excited to do this panel. valuations are down. the i.p.o. market for tech companies seems all but shut.

there's a lot of nervousness out there and yet how v.c.'s get more capital commitments they've in the first quarter of this year since 2006. if you're wondering what's going on join the club. we're hoping these three savvy investors can help us out today. thank you so much for joining us. >> thank you. >> so chris, you are an l.p. and you're an investor in josh's fund. it seems v.c.'s are returning to their investors faster than historically. it was standard to raise a fund either three or four years and that might have been conservative and we're seeing excel and founder's fund coming back in two years. what's going on? >> for people who don't know about the voodoo that i do, as an l.p. i'm the money behind the money. so people in my seat fund people like josh and andy and i used to be a princeton's endowment and i work at a fund to fund groups. and we're kind of the sunlight

in the sense of the venture world. and all of the energy in a sense comes from us. if the l.p.'s stop showing up the trees will wither. o in a sounds grandiose maybe. but one of the challenges the pool of l.p. capital isn't infinite like people think it is. doctors going into venture capital compete at the institutions where these dollars come from against other asset classes in terms of what the most attractive risk-adjusted return. so one of the challenges that venture gaces is that it is further dated options most out of the money that most institutions buy. as a result there's a lot of pressure on venture. and one of the things that's been challenging is you discuss over the last few years, the period of fundraising has shortened. today it is a two-year cycle. the challenge is that investing nirvana for an l.p. is when you

got -- when to a point where your fund is mature enough and recycling distributions. the money you send out hopefully each dollar comes back with three of its friends in short order. historically fundraising cycles are four to five years and liquidity cycles were five or six or seven years. so you'd send out dollars and come back and they would fund your subsequent commitments. what's going on now is that as fundraising cycles have shortened, liquidity cycles have gotten longer. and so the way i describe it is a huge exit sfinkter. >> he did say you what thought he said. >> and we're feeding this snake and l.p.'s give g.p.'s money and g.p.'s give it to startups and startups get licked and comes back to the l.p.'s and then the cycle starts over again. when you got this exit sfinkter and the snake is getting fuller and fuller and fuller we're in brooklyn. so not exactly the shallow end but for those familiar, there's a song from the wu-tang clan

"method man" and one of the methods of torture they talk about i'm going to sew your rectum shut and keep feeding you and feeding you and feeding you. and that's what it's like to be an l.p. because the dynamic you describe is an unsettling long-term dynamic for long-term ecosystem health. >> but why is it happening? i know that -- on the one hand it did seem like startups were raising funding every six months or so. but critics including gil gurley who i spoke with very recently said these guys are racing back to their investors before their paper gains disappear. is that -- do you think there's -- that's -- >> that's a really important point. because right now, a lot of venture funds are looking amazing on paper. right? and in fact, one thing that's a pet peeve of mine is i get emails every day that say our fund is marked at whatever and somebody said to me the other day we had a bunch of markups. so our fund is at a 3-x cash on cash. no. it's paper on cash. and there's this moment, when i was doing public market stuff

before business school we always talked about that you get -- the pit in your stop being a when a trade turns into an investment. something went bad and hold it a long time. similarly i fear as an industry we're headed for this moment where the unrealized because everybody has unrealized gains in the portfolio. and there's this moment where the unrealized b. the unrealizeable. and that's going to be the moment of nausea. bill is absolutely right. everybody is rushing back and nobody wants to be the last fund in the market when the music stops. it's going to be a game of musical chairs. and from the l.p. perspective, everybody is tapped out. in terms of capital, people have blown through their budgets because things have -- companies have come back so fast. and we're all also just exhausted. and there's this psychic exhaustion among l.p.'s. everybody has been running too hard. and kind of reacting rather than being proactive. >> so andy, your firm union square ventures, just closed a $166 million fund. >> we don't really talk about

our fund. >> you filed a form with the s.e.c. suggesting as much. and you had last raised a fund in 2012 so you're sticking to your traditional trajectory it sounds like. josh, what about you? you raised your last fund in 2014. $175 million. are you in the market this year? >> so we typically raise -- we target raising every 2 1/2 years. >> ok. >> that puts us on pace to raise at the end of this year. >> ok. great. i guess -- chris, do you feel like -- you can say no. obviously you would never say no to josh for good reason. but, you know, when i smoke to bill, he lgs made this point it's very hard for l.p.'s because if you say no you can lose your seat at the table possibly for the duration of your career as an l.p. do you feel that that -- true? >> absolutely true. and it's interesting. because we were just talking about this back stage. the yale investment office which is the exemplar of --

they basically invented the game in a sense from the institutional investments perspective. one of their secrets to success historically is geth off the base one stop too early rather than one stop too late. and -- that takes a lot of courage. and most investors lack courage because they focus too much on career risk. and there's a whole principal agent problem there. and furthermore once you say no to a fund you're forever in that g.p.'s bad graces. >> right. >> and look, we all have examples. i wrote a blog post a long time ago called the epivot moling of investing and what is our justified true belief? and the thing that made me think of that when i wrote it was i said no to the ex-he will facebook fund twice. when i was at princeton and when i went to tiff because i left as they were raising. and everything in that moment said that that was -- that was an easy no. and boom, they put up one of the greatest funds ever. and i've been persona non grata there and not explicitly.

but let's just say i'm not on their speed dial. >> andy, you -- u.s.c. has famously wonderful returns. but sort of speaking more broadly this is a very funky market. how do v.c.'s turn their paper gains into cash on cash returns? >> well, it's not really up to us. we don't have control over it, right? the companies have control over it. my partner fred mab pretty outspoken that companies should be going public as a way to get liquidity. more companies should be going public and that's one way to do it and that's one of the issues is the number of i.p.o.'s is dramatically decreased and companies don't get liquid and we don't get liquid and chris doesn't get liquid. >> i'm sorry. i'm having trouble hearing you but josh, what do you think? >> i tend to agree with andy that we're seeing a lack of i.p.o. arings in the market. i think part of that is caused by the fact that there's a massive dislocation between how private markets are valuing companies and how public

markets are valuing companies. we're at this rare moment in fime, it used to be that private companies would aspire to go public so that they could achieve the public market valuation. we're in the rare moment in time where it's almost the opposite. it's as if the minor league ball players are getting paid far more than the professional all-star m.v.p. major pleeg ball players. >> right. >> and until that works itself out in the market, it's going to create a really challenging time for these companies that are being valued in the private markets to realize anything near that price in the public market. >> right. >> but if markets are efficient that equilibrium should occur at some point, correct? >> and it looks like we might be seeing some of that correction now in the market. >> right. >> it's interesting because there's a real echo chamber dynamic. and one thing that always strikes me as an l.p. is when you do get these disconnects,

it's very difficult to kind of -- glide back to this rational ordering. and as a result, you get -- you get these funky kind of risk-adjusted return inflections where you got kind of private companies, more valued than public companies. and if i were -- if i could wave a magic wand i would invent a way to short private companies. because that would kind of re-create the equilibrium. but the steal prices -- >> public companies trade every day. the good news, they trade, bad news, they trade. private companies typically trade on one of two reasons. when there's good news, and the company wants to fundraise, or when the company needs cash so badly they're willing to trade on bad news and capitulate on price. and what that means then is that you're going to need to see companies end up having to

-- some of these companies will have to work through their cash before these private companies trade to sort of where the market should be. i also think that we're at this interesting point where we don't know -- where the industry is trying to figure out are we using the right -- the right comps? are lending companies, a thin tech innovative marketplace and should be valued as such or should they be valued as lenders? should disruptive e-commerce companies be labeled as real and technology innovators or a mattress company? and they get valued differently based on that. >> right. and even companies that are very clearly creating markets like uber nobody knows how to price. and coastal ventures talked to business insiders maybe friday of this weekend and thought that uber if traded publicly would probably go out at around $25 billion. which is obviously far less than it's private company

value. do you think there's going to be maybe a watershed moment? sometimes when i talk to i.p.o. experts they're like oh, i think this stock exchange operator bats global went public and maybe that would be it. i believe we may be seeing the first tech company go public this year, this week. i don't know -- i think it's a networking company. acacia communications. are you thinking maybe once uber goes or -- is there like a certain company that everybody is kind of waiting on to open up this market? not necessarily? >> i'm a c-stage investor so for me i typically fund at the earliest end of the cycle. and i'll leave the sort of prognosticating on what is that watershed moment to the public market investor. >> what do you guys see in m&a? investors also like to point out the fact that these companies, google, microsoft, apple, facebook, have these enormous balance sheets. but they seem like very

reluctant buyers. -- are you -- companies talking to these companies and -- >> we're -- there's a high level of activity. i don't know if there's a high level of desire to pay prices that maybe divorced a little bit from fundamentals. and maybe there's more of that in the past. and it seems like there's less of that right now. >> i guess probably also sort of a catching a falling knife sort of thing. why not wait another six months and see where prices are? >> yeah. there are obviously some companies where they buy them for far more strategic reasons in terms of access to technology, access to talent, filling a critical strategic call. or access to customers. so you can look at the what's app acquisition by facebook in that regard. but if it's financially driven, it's obviously going to be subject to the same market forces that the i.p.o. market

are going to be subject to. >> and what do you see in terms of valuation? on the west coast at least, it seems like valuations are down a little bit. george zachary of c.r.v. who you interviewed maybe last week was saying the one exception is celebrity investor meaning serial entrepreneurs who are creating companies in the space where they already have some expert -- expertise sthafment true on the east coast as well? >> we've seen it on both coasts. we've seen valuations have taken a slight dip. but in the last four years the erage valuation has almost tripled so even if it's down 10% or 20% it's still a very attractive time to be an entrepreneur. >> what do you think, andy? >> we don't really track valuations that much. every deal there's a moment in time where -- where there's a companies that desires to have an investor and has a certain price and an investor desires

to invest at a certain price. so i don't see any generalizations that it's higher or lower than before. i do sense there's some uncertainty in the market. and so entrepreneurs maybe are more flexible than they have been in the past. but i don't really track valuation. >> and the v.c.'s you don't think are more price sensitive than they have been in the past? >> you know, we look at -- as a firm, we're from -- we don't invest that often. eight to 10 times a year so eight to 10 data points so it doesn't expand out to generalization. >> you do see -- you see many companies. >> yeah, sure. >> and we're focused on it obviously. but we need to invest in what we any is the right amount of money and get an ownership position that allows us to deliver people like chris their returns. and it happens and sometimes it doesn't happen. >> can you get more for your dollar? and maybe a couple of years ago they're like we'll give you 15% and now take 20%, 25%? >> we don't -- i don't know how

you think about it. we don't attempt to try to get more for our dollar. not like a commodity. like the right amount relative to the risk relative to our expectations and -- to deliver our l.p. some money. for us we don't want it to be that much. because that means it comes out of the other side. the entrepreneur side. >> great point. >> but it's interesting. because i talked to a lot of portfolio companies pause they see me as -- maybe an honest broker in a sense. and not one of these sharks from shark tank -- just kidding -- but it's interesting. because in palo alto where i live, valuation expectations had been kind of cranking ever upward. and we're seeing this first kind of chill where we've started to see some tech company layoff and for -- from my seat i invest in a couple dozen funds and i'm a big second derivative guy and not terribly smart but i remember

from math class, it's the rate of change of the rate of change i guess. while the market is still going up, the rate is slowing somewhat in terms of markups. that's what we saw kind of in q-4 and q-1. and as we see the kind of market maybe plateau in terms of expectations, i am seeing some investors, the market is not clearing for some companies. right? so the transaction are starting to get done and hopefully we'll see reset of investor expectations and entrepreneur expectations i should say. and kind of get us back to an interesting kind of return, potential opportunity. >> right. >> the market has gotten choppy over the last couple of quarters. you know, it's also important to realize that you have a whole generation of founders and to some degree funders, investors, who have never been through a downturn. right? like if you've been in the industry for the last seven years, you've seen straight up. so it's also just important that -- i don't think it's ever as bad as people think it is.

and it's -- and probably wasn't as good for last seven years in terms of if you look at where the markets are, and most venture firms probably have inflated markets right now. >> and on that topic, josh, identifies seven years. you know, and i'll even kind of say that i think 2008 was kind of a gag. right? most companies -- and i shouldn't say that. most companies have cash for 12 to 18 months at any given time. and that was a very short downturn. that was more of a slide nanne a downturn. good times and everybody felt -- i meet with a lot of folks that are raising funds and say in 2008, this is what i did. did i x, y and z. i remember 2001 and 2002 and i was at princeton then and relearned what -- speaking of math term what asentote meant and every quarter grinding down 0% and point two value and

asentoting and a downturn where you had operation risk and all kinds of syndicate risks. that nobody has seen for 15 years. >> and you don't necessarily -- you don't think we're heading into that? >> i don't think we're heading into that. but i think people, if you say -- pump their chests and say i've lived through a turn turn have no clue. and two generations removed in terms of companies from the last real downturn. >> but at some level it is different this time. >> yes. >> right? >> yes. >> and part of the challenge is to figure out how it's different or in what way it's different. and i agree. it's a challenge. when you've been in an environment of 10 years of rising asset prices, that's -- that's the rhythm or the cadence that you know. rising asset prices. and when they're not rising anymore, you need to learn new resms or new cadences. at the same time in that 10-year period, we all got computers in our pockets. >> right. >> and so the dynamic does -- it does feel like it's different. obviously our job -- our job is to figure out what ways it's different and find the right clearing prices. but at the same time it's not

that -- it doesn't feel like the world is falling apart here. >> absolutely. >> right? >> it doesn't feel like the world is falling apart but the question is how different is it? i mean, it seems to me like it's different. but then again you hear investors say, you know, there's this fundamental misunderstanding. even though the opportunity is global and everybody has a smart phone in their pocket, there are still going to be like this very small number of breakout winners. do you guys agree, disagree? has the opportunity set -- is the size of the winner circle changing or are the winners just getting bigger? i think that's sort of always -- >> yes and yes. at some level, the pleading companies today, who are the incumbents, really didn't exist 10 years ago are incredibly powerful position. they have incredible advantage to them. at the same time the opportunity set seems broader, too. as well. and that's a tough balance to

strike. >> i founded my first company, co-funded it in 1992. and right when -- the year before the web browser was invented and saw the internet sort of rise, and i remember everyone talking of how the internet is going to disrupt every portion of daily life. and it really has. and yes, while you now can go global and yes, you now are mobile, i don't believe that we're done creating amazing companies. but i also don't believe that this time is fundamentally different and this time is 3-x larger than the last time. and the market is going to need to figure out as andy said how to price that. everyone was talking about a speculative bubble when amazon went public and they went public at a value of $500 million. and you now have like jet.com which is the amazon 2.0 which is raising in the private market at a $1.5 billion price. so the opportunities are still

there. but i'm not a believer that you're going to see a massive increase in the number of epic companies that are created. >> and from my seat, one thing i'm always cog antioxidant of is the return on any asset -- cognizant of is the return of any asset is the function of the price you pay and the capital you assume. as we've seen, pricing go up and up and up, in terms of startups, jet is an example or literally you can point at any startup, they're raising -- and one thing that actually always strikes me as a quick aside if i look at my portfolio, and josh's and my portfolio, first round. and first round has a bunch of companies that would be in the s&p mid cap 400. which is amazing. right? and i see entrepreneurs raise money in the private market to these valuations. and at the end of the day you got to think about now am i going to put the moolah in the koala? -- coola? from the valuations right now to the exits and we open up

that exit sfinkter and the capital comes back to me, are we -- are we getting the kind of return that we expect? or are the returns becoming more pedestrian? what do you need to believe? so if -- as andy says and i believe this, this time it is different, and that you will see larger outcomes. that's great. but all of the losses portend bigger holes. that's what i worry about. >> and there's -- the paradox is that i think that -- maybe i disagree with josh. i think the opportunity that's much greater than 3-x than it was when you started your first company. it could be 1020r or 100-x. and so i don't think -- that to me is a reality. the question is where do investment returns come from that? and that's uncertain. and then if the investment returns don't come that feed what we need to return to you, what are the implications of that? what are the implications of that to the next generation of funds or generation of entrepreneurs? i don't have an answer to that. i find that to be a key question. for me the question is left those great opportunities, i

think there are. >> i'm -- >> fundamentally bigger. >> in the meantime, are you guys -- since the i.p.o. market is shut right now, and m&a is slow, you're series a investors, are you seeing that your follow-on investors are changing at all? i keep hearing about hedge funds and mutual funds retrenching and an opportunity to do -- a couple of funds, mellono, mellono ventures and mayfield raised opportunity funds to attack this perceived or real gap, is it real? >> it's hard to take one quarter or two quarters and try to extrapolate. we're still seeing that good companies can get funded in the follow-on market by good investors. so yeah. there are -- as the markets have grown, we've seen -- as the valuations have gone up, as more companies have sort of achieved unicorn status, we've

seen more investors, nontraditional investors come into the space. but i haven't yet seen the surrender of the existing traditional venture investors. >> yeah. and i want -- i want to go back to something i said. the i.p.o. market is never either opened -- neither opened nor shut. it is what it is. it's a company's choice to go public. and they might not like the process or like the prospects. but it's always open. and your choice and the challenge that some of us are facing is there's the disconnect between the private valuations and what companies they think they can get and the i.p.o. market. the i.p.o. market is always open. >> we're almost out of time, chris, any last thoughts? >> put the moolah in the coola, guys. >> thank you so much for being here. >> thank you. >> thanks, guys. [applause] >> on newsmakers this weekend

our guest is air force secretary deborah lee james. she talks about military operations against isis. defense policy debate in congress and whether women should be required to next, c-span looks at 30 years of senate coverage on c-span2. with the weekly addresses president obama and house speaker paul ryan. after that, the communicators and a discussion of consumer privacy on the internet.