If AngelList provides a foundation for investment “capital as a service,” then Data Elite could be the model for ‘advising-as-a-service.’ Data Elite is launching today as a a venture lab and fund that counts Social+Capital Partnership, Andreessen Horowitz, Formation8, Ron Conway and Anand Rajaraman as backers. Data Elite has declined to reveal the amount of funding it has raised from these investors.
At its core, Data Elite is a new structure that provide startups with funding, three months of physical workspace, and hands-on counsel from many of data science minds from Facebook, Netflix, Zynga and others. Data Elite was founded by Tasso Argyros, founder of Aster Data, which sold to Teradata for $300 million in 2011, as well as Stamos Venios, who has held M&A and investment positions with companies in Europe and Israel.
Data Elite is part investment vehicle that provides funding in turn for equity, and part advising. As Venios explains, he and Argyros felt that there was a gap in the incubator ecosystem that addressed the need for advising big data startups–those companies that are dealing with parsing through and making sense of massive amounts of data. Venios says that these companies need real expertise from data science experts, and there are no real incubators who cater to these needs.
Data Elite will offer startups $50,000 for around 6 percent of the company, and a minimum of $100,000 as convertible note (but startups don’t have to take this). Data Elite will take companies across all stages–but the founding teams need to have least five years of subject matter expertise around data, or proven success in a data-related field (i.e. an acquisition). The program lasts for three months, and the fund plans to back 5-10 companies.
The unique aspect of what Data Elite offers is in its advisors and partners, who together are committed to more than 60 hours per week of coaching time just for the lab’s companies. Startups will be paired with an impressive group of advisors, who will be granted equity in turn for advising certain companies in the portfolio. These advisors include:
“There are many funds, incubators, and accelerators out there that entrepreneurs can turn to today for general business advice. However, none of these programs have the industry knowledge to help highly technical founders in the data sciences to commercialize their research or build out their products,” says Social+Capital founder Palihapitiya. in a release “Data Elite was formed to bridge this gap, with hands-on support from today’s most accomplished and knowledgeable data scientists.”
Conway weighed in: “Big data is solving big problems and we need a home to foster the next generation of this unique breed of scientist. This is the vision of Data Elite and why I’m excited to be on board.”
“World-class advisors are one of the most important determinants of success for a young company, and we couldn’t be more impressed with the quality of mentors on the roster at Data Elite,” says Joe Lonsdale, Partner at Formation8 and Palantir co-founder. “We are extremely excited to support such a unique launch pad which shares our common love of data science and desire to support companies tackling deeply important challenges facing the world today.”
It’s clear that when it comes to serving some of the needs of startups in tackling large-scale data processing, Data Elite is doing something unique that could help founders battle some of the unique challenges they face in the space. I’ve long heard that the traditional incubator doesn’t necessarily serve the best interests of certain categories of startups, especially those in enterprise industries. The true advantage Data Elite offers is in access to the data science talent that have built the analytical backends to companies like Facebook, and others. Can this hands-on help change the trajectory of a data-focuses startup (and is worth a decent amount of equity points in return)?
We’ll find out soon.