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You find one that looks interesting and you reach out. The startup responds by saying you must first sign a NDA. The strength of any legal instrument is directly related to your ability to enforce it. Do you plan on suing investors in the near future? Focus on what you can control, which is what information you show them and what aspects of the business you are willing to share. All of that said, there are some things you should consider protecting as you shop your idea around to investors.
Investors who have investments in similar companies to yours could present a challenge. You are essentially providing them with competitive information that they are free to share with their other portfolio companies.
Most investors will decline meeting based on those grounds in the first place. The other thing to worry about is the dissemination of your information. Pitch decks and business plans can get shared incredibly easily.
Your Fundable profile allows you to grant and revoke access online, allowing you to control who sees what. Alternatively, you could present important documents strictly in person, on your own laptop. Thank you. Thank you for reaching out to us. We appreciate you taking the time to provide feedback on Cooley GO. By using our website, you agree to our use of cookies. Find out more information on how we use cookies and how you can change your settings in our cookie policy.
Business Plan. Related Articles. Finally, the investor is investing in more than your concept — they are investing in you and your team and the value you bring to the table — your vision and ability to execute. If your idea is easily replicated by anyone who hears it, you may want to reconsider whether this is an idea worth pursuing.
Legal: Professional investors talk to hundreds or thousands of entrepreneurs. While each entrepreneur may bring their own unique perspective to a concept, there is often overlap between ideas. If investors pass on one company and choose to invest in another company with a similar concept, they can be opening themselves up to exposure by signing an NDA.
Also, it would result in investors being far more selective about with whom they speak. This is not good for entrepreneurs who may find fewer investors willing to speak with them. And in closing, there's the quote attributed to author, speaker and evangelist, Guy Kawasaki, on asking a venture capitalist to sign an NDA:.
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