Don't bring a NDA to a VC meeting

Don't bring a NDA to a VC meeting

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EveryNDA

It doesn’t matter how special, unique or innovative your project might be.

Venture capitalists have heard it all. They’re not likely to break their "No NDA at our firm" rule just for you.

Venture capital firms have valid reasons to sign your Non-Disclosure Agreement.

INTRODUCTION

Disclaimer: Legal information is not legal advice

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Non-disclosure agreements (shorten as NDA agreements) are everywhere these days.

Newbie industrialists or startup founders are often quick to whip them out at VC meetings.




As a startup founder, this would actually be a bold and wise move in most any other business situation.

Hiring your first employees?

Need a developer for your first mock-up?

Engaging an accountant who needs specifics in order to create accurate financial projections?




Either way, NDA

agreements are important.

So, if they’re so valid and important, why shouldn’t you ask a VC to sign

one?






The point is that VC’s are solely interested in ‘investing.’

They have no desire to do any leg work and their sole aim is to give you the financial boost you need so that your great idea can move forward and make money. Then, when you make money, they make money.




Specific reasons Venture Capitalists

won’t sign

Well, first of all, they simply don’t have the time.

A third point to ponder is that of the hundreds or thousands of other ideas that your (potential) VC is reviewing, at least a handful of those are similar to yours.

A VC’s bread and butter is ‘deal flow.’




The nature of venture capitalism simply makes signing NDA’s impractical.




So, if you’re worried that a VC might steal your precious idea and make it work without you, then you obviously don’t understand venture capitalists; so take the time to do a little more research before you step into the ring.




“For entrepreneurs who think their basic idea is so good they can’t tell anyone —those folks lack the ego it takes to win the entrepreneurial game. In other words,they don’t have the moxie to think they can best execute on their idea.”

Quote from Paul Jones on NDA to VC meetings




So you can’t bring an NDA to a VC meeting, but you still have some proprietary information that’s totally worthy of protection and privacy.

Here are a few ideas for protecting that IP instead of throwing down an NDA agreement at your first meeting.




What you can do instead

First of all, do your homework and research VC companies before knocking on their doors.

Second, many experts suggest using pitch desks. Pitch deck platforms allow information to be easily shared.

Finally, keep in mind that a VC doesn’t need to know your secret ingredient in order to be interested.

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If, and when, a VC is intrigued enough to hear more, they’ll offer a term

sheet and then, by all means, whip out that NDA

agreement so you can reveal your big secret and

seal the deal in confidence.


Icon from slide 1 created by Rflor from the Noun Project

Icon from slide 2 created by Alfredo Hernandez from the Noun Project

Icon from slide 8 created by Alex Fuller from the Noun Project

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Don't bring a NDA to a VC meeting

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