Should I get investors to sign an NDA before sharing my idea?
I have an idea for a company and I want to share it with potential investors. I'm a bit concerned about my ability to protect the idea. Should I get them to sign an NDA? Would that scare investors away?
Legal Investors Intellectual Property NDA
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No. and any real investor would not sign anyway. They may take the time to explain why they won't but most likely they will put you on the list of people who have not reached a certain level of sophistication yet. This is a common question. The answer is always the same. – Tim J 12 years ago
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I have deal with over 50 investors. Only unsophisticated investors would sign any NDA and you absolutely don't want to take any money from them. – Apollo Sinkevicius 12 years ago
1 Answer
The short answer is NO!
Asking your investors to sign an NDA is impractical as most of them see dozens if not hundreds of ideas each years so they will never be able to manage their exposure if they have to sign an NDA for each idea they hear.
At the same time, asking an investor to sign an NDA is telling the investor that you are probably very concerned about sharing your idea and this fear has prevented you from validating your idea enough with the market.
I actually wrote a post about this a few years ago if you want to read a bit more - http://www.yanivnizan.com/2009/08/signing-nda-with-an-investor-good-idea-or-a-bad-one.html
