Why Investors Don't Sign Non-Disclosure Agreements
15/12/2012 20:11
A common "mistake" among entrepreneurs is thinking that they need to have investors sign NDA's (non-disclosure agreements) before talking about their company.
Generally speaking, investors don't sign NDA's. It's not even worth asking for one.
By asking an investor to sign an NDA one of two things will happen:
1. You turn the investor away - what's the point in killing the deal before you've even had a chance to talk about it?
2. The investor signs it and you have a useless agreement - what are you going to do, sue the investor over a discussion about your idea?
There have been a few really nice (long) posts from some prominent venture capitalists about this issue that have just appeared. Take a look for yourself:
Shhhh - The Promise Not To Tell - This is from Rick Segal, who explains that you should present your intro pitch like you would a keynote presentation to a large audience. Show the benefits, but don't give away the secret sauce (great advice).
VC's and Non Disclosure Agreements - This is from "Ask the VC" a new blog that is a must-read for anyone that wants to see what investors really think about working with entrepreneurs.