Why I Don’t Sign NDA’s

Asking angel investors to sign a non-disclosure agreement makes you look like an amateur.

Never ask a venture capitalist to sign a non-disclosure agreement (NDA). They never do. This is because at any given moment, they are looking at three or four similar deals. They’re not about to create legal issues because they sign a NDA and then fund another, similar company–thereby making the paranoid entrepreneur believe the venture capitalist stole his idea. If you even ask them to sign one, you might as well tattoo “I’m clueless!” on your forehead. – Guy Kawasaki

Let’s explore this further:

  • Good ideas are everywhere and generally they’re worthless. Good execution is where the value is added.
  • If your idea is really good… someone else has likely thought of it.
  • Your NDA puts all the obligation on me and nothing on you.  I have to be sure I don’t reveal anything you say.  What’s your obligation?
  • If you can’t trust me to keep your confidence with your idea,  how can you trust me with anything?
  • I have to read your NDA to see if it has problems… as if I don’t already have enough to do.

Don’t ask me to sign your NDA until I know enough about the project to determine if you have something truly proprietary… and if it’s worth some cash to my attorney just to sign your NDA.

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