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Should I ask potential investors to sign an NDA before pitching my idea?

April 12, 2017 by brian prokopowich0
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A startup, like any new business, is inherently risky, and you’ll want the venture to be as financially and legally secure as possible. But more than that, it’s kind of your baby. It’s something that you have created, and obviously you don’t want someone taking that away from you.

So it seems to make sense to want to make every potential investor you show your work to sign a non-disclosure agreement (NDA). It’s meant to keep an investor from having the ability to pass off your hard work to someone else and cut your competitive advantage.

It is very likely however, that a potential investor will refuse to sign an NDA before you’ve even gotten halfway through sliding it across the desk towards them. In some circles, it’s actually considered a faux pas.

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This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.

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brian prokopowich

I am a technology co-founder and lover of all thing related to Start- ups and entrepreneurship. I created this group so we can all learn from each other to create foster a create tech & Start-up community.


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