pa we have to see you right here next week and on in 2019. ♪ and i will be here every step of the way for a new journey. have a wonderful new year. maria bartiromo wall street is right now #metoo >> happy new year everybody and welcome to the program that analyzes week that was and helps position you for the week ahead i'm maria bartiromo. we're so happy you're with us this weekend and coming up in just a few moments one of the most respect ared lead percentek in the venture capital world grey croft cofounder alan is with me this weekend. and then later my sit down with investment ceo john on what we can expect from the investing front in 20189 meanwhile new year is gearing up to be a huge one for ipo one of the pioneers in venture capitol alan is with the perfect guest to weigh in on what's happening with

entrepreneurialism and alan played a expanding over ten years ago patrick cofounded grey partnerses a firm focusing on digital media investment and he has more than a million under management enalan joins me right now. thanks forking us and i love talking to you because you get a chance to see all of the growth stories of america and world early on when they're small companies you get to decide what you like and where you want to put your money. so -- characterize entrepreneurialism today characterize what you're seeing from your venture capital seat right now. >> actually it is probably the best i've seen in last certainly in last decade, i mean, i don't to go back to refer to the boom times. before the bust of early 2,000 but we're seeing enormous entrepreneurial set enthusiasm permeating major cities but there are incubator and startup

labs there are work spaces, in every city in the country columbus, ohio, nancy pelosi, sioux city, iowa, every -- locality wants to encourage the young people to start businesses and are making it easier for them not just with tax benefits because most young companies don't pay taxes because they're lose money they're funded by people like myself who put equity in the companies but they're making it easier in terms of the environment and it's a very exciting time. >> some of the company it is that you've invested in are very exciting actually, and they've started small an they've become big companies like the real real or -- like wondering or some of the others let's go through some of your newscast 789s tell us what you see here and why these are growth stories how would you characterize your portfolio today and pinpoint a couple of growth stories for us. >> well it is interesting i've done some of had this reflection in saying to my team an saying

do you realize we started this company and fact that it is doing 50 or 100 million dollars now, it started out at a very tiny company now there's a big loss ratio in the way so let's not kid ourselves but -- well you mentioned real, with real probably will be -- the approaching a billion dollar company. >> how great. i can't remember exactlyoa the number but a small, small company and went into it powrp or five years and they are leading online -- merchandise of not vintage necessarily but -- high end luxury brands a woman has in her closet. i have a ton of stuff i want to get rid of so calling real, with real. >> they'll call you if you don't call in. top podcast doctor death dirty wjohn, podcasts are hot. >> podcast is in my opinion has been audio has been around forever i was involved in early stage of audible which was almost 20 years ago over 20

years ago, and now -- we're seeing a ground swell of interest in pod cast because people don't have as much time to sit and read as they used to. and -- they are listening every place whether walking down the street riding on train and they have a very -- hot guy running it who actually run original fox international television he's from argentinian lopez has a great set of content in his -- he has american business force he's got gladiator and dirty john adapted for a television show in which part of this the strategy. >> how great, and doctor death and none of your listeners should miss either one of those. >> those are some of the best podcasts out there. >> there's a rate are on podcast like there is on everything else typically speaking do they come

to you say do you find out about companies that you think well let me go talk you think could be growth stories and let my contact them and talk to them? how does one come to you and get you excited about investing in their business? skts not flattering myself but my whole -- part well my other partners in mymy team we all have a followig of some sort mine is longer than most because i've been in the business so long. but well my partners have people coming to see them we're all going to conferences and going to see -- >> is there a theme alan i know that you are interested in health care. this podcast company is just specific to podcast are hot i know highlight of the media industry right now. but are there themes in terms of industries that you particularly look for -- opportunities? >> you know, there's a -- there's a -- trend that happen. right now in -- online insurance is hot. of course crypto has been very hot we've been very, very, very select in whole crypto area.

>> plummeted this year. we haven't been affected by it because we're looking more at the -- what they call pick and shovels in other words the -- forces that the sources you use to effect and marketplace for we just -- committed to making investment and it will do secure -- security for -- for people in the crypto business. >> so cybersecurity and we have security companies and flash point which had is dealing with cybersecurity of concern for -- for the dark sources around the world that are d trying to invae even. websites, for the first time last week, i actually got hacked myself so i now have the experience of what it's like and what you have to do when you do get hacked it is -- permeates everything you've got. >> how horrible. and you never know exactly how it got there.

so you have a lot of new names comeing in as well are are you expecting to have a bigger bite in term a bigger investment in small early stage companies in new year? >> one of our hottest companies is acon which we invested in a year ago you may have heard of it start at ground zero and no i i sky is rocketing which is dealing with -- the millennial generation younger people in terms of signing on and using what is calledn found money it is interesting concept if you're a member of acorns you go into starbucks you go into any department store and you haveonn acorns account, if you buy something for 22 dollarss and 12 cents, if my math is good 88 cents will be put into your invested int and the stock market and education young people about investing. >> how many of the companies what had percentage of the company nays you invest in ultimately go public? i mean how much of it is your exit strategy and ipo? >> you're feeding the questions

i like to answer. [laughter] my previous life and i wases running -- built to a huge ipos were critical element when i started concern in 2006 the reality that set in that ipos were not in every company's future and we -- appropriately had the presence -- presence to say let's not count on ipo's let's build companies that are properly financed -- at the right pricing, and expect have a realistic expectation and don't expect billion dollar public offering, and we were right. >> meanwhile there were -- there are ten billion dollar company it is that went public this year. it was a great ipo year actually even we had tough market and next year is is so stay with us when we come back i want to you what you think is behind this surge in ipos of some very familiar names. stay with us more on alan when we come right back. familiar

names. more with alan t3 when we come back

>> welcome back we continue my conversation right now with a cofounder of we have a tough end of year in 2018 with majorities up. down, down again, with these wild moves did that impact funding ofga small companies? did that impact your -- ability or desire to invest in some of these early stage companies? >> you know the private market venture and private equity but particularly venture, is almost impervious if you tell them, with joe, the majority has been

down 20% in the last two months. you were out raising money for two months and evaluation was -- 50 million dollars. it is down -- he doesn't want to hear what you have to say, and as a result the private markets hang up there. andd it takes -- a good amount of time before the reality sets in. they have to be out there for three, four, five months raising money, and then it will be reflected. so it doesn't go down when the public markets go down so we're not -- it hasn't happened yet. >> i think one of the reasons that we're seeing -- a big slate of ipo is all of this money slashing around venture capital included ipo companies that want to go public next year, continues to rise and in 2018 you have 191 companies raisingti 47 billion dollars up 32% from a year ago global ipo is 327 companies with 170 billion dollars in 2018.

and a lot of health care a lot of biotech what do you think is look at these names very going public this upcoming year alan über, lyft, slack pin interest air a b&b what's your take on why we're seeing so many teals. >> über has been around for many years. >> going public. >> when i started 2006, ipo market slowed down so we said let's not count on it. i honest believe i have to change my view based onen ipo market has finally open up but when you say companies have gone public do you realize out of how many thousands ofsa private deas thafn financed over last years -- >> that they kopght sitting there in private hands most -- transactions of the venture business are -- donene in m and a transaction that's the realistic i would say 98% of the companies in my portfolio and most get done in a private -- way to sell it out to another

company and a sold a company recently called ship, we sold early this year. for large price to google, facebook those are our buyers. >> does price today seem right to you? are you getting right price in order to come in and invest or have evaluations outsized you know getting you to invest -- whatever it is, millions of dollars at a low price is sort of beyond? can you still get the price you want? >> there's a lot of money -- out there -- that's what i mean in funds. they've been raised last several years so a lot of competition particularly in later stage in earlier stage it is more glinned and -- it goes back to whats i was saying before. we try to be as we can, and say to people, the value you're asking for was last year, it is not in the current environment. and you have to get their mindset adjusted, and

entrepreneur who only sees one way up -- is takes time for that to set in. but it does set in at some point. so -- but on the whole evaluation withs honestly have been relatively fair at the lower level, you know which is c round a round when you get soft bank vision fund and get into hundred, 200, 300 million dollars that are being put into a deal at a -- you know i'll call it b plus or c round where -- that's big money. and there aren't enough opportunities at that level. let's see you where is a a transaction are being done in -- über at very high prices at 120 billion dollars. >> exactly right. >> we have to wait they're all called preipo rounds so these people are buying it with idea this is going to be public at something more than 120 billion. and you know, the market has to justify it.

has -- they have to justify by performance. >>12 are they even profitable? >> not yet. at 120 billion dollar market evaluation. wow i would have expect some profit for it. >> what has been proported is losing a billion a quarter but a lot of thatfi is expanding a new market. but one of the most important things is after they go ipo -- what's happened it in the two or three quarters afterwards because we have a lot of b companies i remember when s.n.a.p. went public and -- the first or second quarter was a disappointment. stock collapsed, and it is very hard to come back from that. >> give me a prediction for 2019 here we are at year end what would you look at -- as sort of one of the expectations that you have for the venture capital market or whatever -- >> let's talk about too, let's in public market when our president got elected. i was on tv a lot at the time, anded asking prognosticate what market was going to be -- i said the market hates surprises. and it hates volatility.

and we are getting we've gotten it day one volatility in surprises an i've been totally wrong until the last two months. the market now is say, we doapght like volatility and surprises now go to venture market.li so in terms of the market the the overall stock market, i am nervous as long as we have what we're seeing here in the from the political scene and the international scene. we dongt know what's going to happen with terrorist, taxes, the election cycle. sort of falling apart right now. get that. so in the venture scene, that -- and you talked to venture capital they may have political beliefs but they're not out there in front end of working -- they're not looking they don't care about interest rates because they've funded with equity. they all they're concerned with is -- can i sell my product? can i raise money? on pect basis, and i would say there's going to bera a continuation of -- strong private equity or venture market particularly.

and -- not i docu think that ipo market has is back again. and we're going to see a lot more ipos coming up from a lot of household names that have been waiting in the q for a long time. >> all right well, mom and pop will be able to buy into some very familiar names in the year ahead. alan it is wonderful to see you. thank you very much. alanan thanks for joining us hay new year alan come back soon. up next taking a look at the year ahead with one of the country leading managers investment ceo john is with me. stay with us. us. . >> 2018 was your volatility can we expect more of the same in 2019? . >> that will be the constant. >> john gives maria his take >> john gives maria his take when wall street returns.

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simple. easy. awesome. >> welcome back well what a volatile year it has for markets now we're looking ahead to the new year what can we expect out of 2019 in after the last two months ofhe the year, had had wd swings. i spoke with one of the countries's leading money managers john krrk oh of investments and here's what he said about investing in the year

ahead.e >> we're going to continue to see volatility. with the administration and what's beginning on in the world and with the market with the fed. geopolitical so ting that is had the constant that we're going to see going forward. in terms of rates, the tenure i think we're going to trade in this range i don't think we have any huge surprises you know anywhere between -- where we are now, to maybe as high as 3.5%. but not much higher than that. i think curve will continue to maybe to steepen a little bit more. and short part of curve will come down a little bit in yields. in terms of equities it shall i think that people are going to have to i think still believe in the growth story but it is a lot more tactical i think we might see a shift in allocation from some of the more crowded tax based like the fangs intoless crowded sectors, and financials i think will -- start to do even better here.

as rates start to creep up a little bit. now i don't see rates creeping up because of inflation. had is naturally creeping up because they were at zero for so long we have four interest rate hikes in 2018. we're expecting there should be at least three in 2019 what has been what the impact of higher rates on your business? >> well, first, i'm not in the camp that it's that in terms of how many rates are going to be -- >> maybe you think it won't be three? >> fed has to have a script. and when they go offscript we see market moves. up or town and we're anticipating what they're going to do. i think going forward the fed will be very accommodative nobody wins if you choke the economy. so -- if the economy continues to be extremely robust, we might get those three moves. i think the economy is beginning to continue to do better but not as robust to actually need those

three moves and as the continue to take down liquidity and supply as well that count as a move up in the rates as well. so i think it is a balance they have tods and surprised if they do more than one rate hike for 2019. certainly we've seen the market not really sure how to react. to higher rates because when you've got 10% in three year, you can say well okay well maybe i'm sorryrc 10% two year you may say y maybe i'll shift money out of the equities into fixed income what kind of shifting are you seeing in terms of your clients and a portfolio managers dealing with higher race in one area of the market and perhaps the idea that i could get that with safety let me shift money out of the equities. >> well, i think the last three years have been extremely interesting because of volatile ity in the market and seat that i sit in is really an spreeing seat because we see a lot of retail flow, and what is

mom and pop, bring into and what are they looking for in so they're looking for downward protection. they're looking for preservation of capital and so -- some of our funds market neutral, our long short, our hedge equity fund those have seen a tremendous amount of increase in assets under management because it solves for some of the issues that our customers are looking for. and that's protection on the downside. >> how does back drop look to you there's worry about slowdown coming. how does back drop look on global economy at this point? >> well, there's no question we're end of cycle. what does that mean? and end of cycle in past means okay, stop you know pencils down. that's not the the case. this is a different type of cycle. rates have never been low and in this cycle can mean two years. can mean three years. and our invest the professionals in our downward protection in terms of risk management will

prove continue to do really well in thesk cycle environment we fl it is going to last a lot longer than it has in theis past. so that's what we have to look at yes end of cycle but the cycle can take a lot longer than it has in the past so you have to defensive a lot of our strategies are increasing hedges by more maybe 10% next year than we have in the past because this end of cycle we feel is going to last a lot longer and so we don't want to leave a lot of upset on table we want to protect ourself. >> my thanks to john from calmos. more wall street right after this. 't go anywhere more wall street right after this. "wall street"

>> well thank you so much for watching wall street this week, and all year, thank you to our fantastic viewers you can catch up every friday night at 9 p.m. eastern on fox business. plus i'll see you supgd morning on fox news channel or for sunday morning futures got a big show this weekend so do join us live 10 a.m. on sunday, plus start smart every weekday tune in here on fox business weekdays for mornings with maria from 6 to 89 a.m. eastern, we hope you'll join us every morning.

that will do it for us for now thank you so much for being with us from everyone here at wall street. we wish you all a happy and prosperous 2019 i'll see you again next year. ♪ ♪ >> hello and welcome to wall street journal at large. well the clock is running down on 2018, and inevitably this tile of the year we find ourselfves looking backward and forward. back over year that brought us plenty to rejoice and refret and forward as always with much hope but not a little trepidation about what may come in 2019. this was above all a good year for the u.s. economy. whenen the data in it may prove, in fact, to be best year in more than a decade. the nation was largely at peace