AI Data Broker Master Guide
There are about to be a lot of new data brokers. There are going to be far fewer brokers that buyers want to work with.
Being a Data Broker and making introductions sounds easy, but will quickly be competed away. To stand out, you'll want to become a Value Add Data Broker
This article is going to breakdown how to be a Value Add Data Broker so you get buyer preference by making opportunities easier to evaluate, easier to negotiate and faster to close.
- Organizing a Seller's Data
If you help sellers organize their data and know what buyers look for or find interesting before making an introduction, you timesave most of the due diligence process that we need to go through on each data set to evaluate if it is the right fit for us.
Start by preparing a Seller's Data Inventory
- List out each software
- Add years available for export per software
- Add total quantity of data in TBs, messages, or other metric
We talk to 20+ sellers per day and this is commonly one of the friction points preventing us from progressing forward to a valuation because the seller can't clearly define what their data shape looks like.
If you are the Data Broker that is walking in with their data inventory in hand before we start a conversation, that will move deals faster and I will want to do more deals with you in the future.
- Setting Proper Seller Expectations
Not everyone's baby is adorable. If the seller walks in with an unrealistic valuation, then it hurts your and my ability to get a deal done and we end up investing a lot of time when there are plenty of other deals out there.
Try to learn more from each of your buyers about what drives Value in their mind. There are some buyers that use head count and TB size as their entire valuation calculator. Polyshares uses more of an art based on data quality that requires additional due diligence before we transact on a data set.
Our due diligence calls go deeper into how data moves through their business for different functions, how well is it recorded and how many years do we have full context data not just emails or google drive.
For example, I've seen data sets be marked down in value significantly because the business owner switched between Slack, WhatsApp, Discord etc over the course of his data set. So of the 10+ years of data, we could only give him full context credit for the most recent 2 years since internal messaging is one of the most important context layers.
If you are the broker that is constantly presenting well prepared and reasonable sellers, it will be easier for us to close opportunities together and I will want to prioritize your deals in the future due to their likeliness to close.
- Navigating Date Licensing Deal Terms
Outside of price, there are several other deal term considerations to be mindful of as a Value Add Data Broker.
- Exclusivity Term
- Acceptance Term
- Payout Net Term
- Scope of Use
- Sub-licensing Restrictions
- De-Identification Requirements
- Liability Caps
Exclusivity Term Market Standard: 2 year exclusivity term
- If you ask for shorter, be prepared to trade some of the headline price in return. The Exclusivity Period is the buyer's protected window to make their money on the data set and multiple buyers with the same data set depreciates their monetization ability.
Acceptance Term Market Standard: 30 Days
- Acceptance Term protects the buyer from a fraudulent data set. I've heard crazy stories of sellers uploading Disney Movies to their Google Drive to inflate GB size. The buyer has the option to back out of the deal during the acceptance window for any reason. As long as the data set was properly represented there shouldn't be an issue
Payout Net Terms Market Standard: 60 Days
- Similar to the the exclusivity term, if you ask for shorter be prepared to trade some of the headline price to get paid out faster.
Sub-licensing Restrictions Market Standard: None
- 🇺🇸Polyshares is willing to put in our contracts with penalties attached to only allow for the data to be sub-licensed to US-Based AI Research Companies 🇺🇸
De-Identification Requirements Market Standard: None
- Most buyers in the market don't include seller protective terms for De-Identification. At a minimum, the buyer should be willing to provide a Certificate of Deletion once the raw files have been transformed. I would also start to ask for terms that require the De-ID to be completed with 14 days of extraction (scaled with the size of the data). The period of time between when an extraction happens and when De-ID is the highest risk of exposure for the seller and should be treated as such.
The riskiest period of time for a seller is the time post-extraction until the de-identification is completed.
Polyshares uses world class third party firms to complete de-identification work so we never touch raw files. We end up paying more for the service than the other labs that in house the function, but that investment is worth it for the peace of mind for sellers that work with Polyshares.
Most people have never seen a data licensing agreement in general and their first response is to run the agreement through AI to understand what they are looking at. You can be their trusted expert by guiding them through these new terms and suggesting where to accept market standard and where to push for better terms.
*Disclosure: I am not an attorney nor have I played one on TV. Please consult an attorney if you are reviewing a Data Licensing Agreement before signing and do your own due diligence. Information is for general purpose only.
Working with Polyshares
Polyshares values the seller experience and we invest heavily into staffing our acquisitions team with high quality people that will take the time to work with your sellers. You can trust that we will handle your clients with a high degree of professionalism.
We currently have over 100 brokers on our platform submitting deals everyday and growing quickly.
We pay 6% to our Data Brokers on top of our acquisition price to the client paid on the same terms as when the client is paid.
Ex $300,000 Acquisition Price $300,000 Paid to Seller $18,000 Paid to Broker
We also pay for expanding our network and pay a 1% override for referring another broker to our platform.
The platform has conflict checking built in so if the company name/email matches something in our system it cannot be submitted twice protecting initial attribution.
Come do deals with us - polyshares.com/signup
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