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Why do VCs have issues signing a Standard NDA?

Recently I was told by an Entrepreneur / VC / EC that he wouldn't sign our NDA, after our discussion regarding products, services and general business plans for a StartUp.

Granted, we should have had him sign prior to the discussion, but it was acknowledged that we would be sending an electronic NDA to cover our discussion.

His contempt for our NDA was boiled down to: "I never sign NDAs and work with StartUps & Fortune500s alike, and quite frankly nothing you have told me is protectable. Sleep assured that your information is safe with me and my integrity."

Obviously, he wasn't the right fit for our StartUp and didn't believe in us at some level, but if you have No interest in spilling our beans, why not sign the document?

Thoughts?

35 Replies

Mitchell Portnoy
11
0
Mitchell Portnoy Entrepreneur
Healthcare Information Executive
All of them will tell you the same. No one signs NDAs.
Jessica Alter
20
0
Jessica Alter Entrepreneur • Advisor
Entrepreneur & Advisor
I interact with investors on a daily basis and I have literally never heard of a VC or investor signing anNDA. Never. Their job is to meet with entrepreneurs and companies - 10-20/day. Quite frankly, they have better things to do than steal your idea and the world is too small for a good investor to do that - consequences are too high.
No one is going to steal your idea, especially a VC. I mean this in the most helpful way possible - any other advice you receive is wrong and probably a less sophisticated investor.
Vijay Goel, MD
4
0
Vijay Goel, MD Entrepreneur • Advisor
Founder Chefalytics, Co-owner Bite Catering Couture, Independent consultant (ex-McKinsey)
None of them will sign. Otherwise they wouldn't be able to talk to anybody before being conflicted.
Ray Sturm
1
0
Ray Sturm Entrepreneur • Advisor
Co-Founder and CEO at AlphaFlow
Never heard of an investor who will sign....would be way too dangerous given the number of similar businesses they see.
Mike Rozlog
1
0
Mike Rozlog Advisor
Advisor at TechColumbus
Humiliation, the first time I asked for the NDA to be signed... they laughed (not in a good way). Found out later, they won't sign them, don't sign them... and as someone already said, amateurish, big rookie mistake.
Eric Wold
0
0
Eric Wold Entrepreneur
CEO @ RingSeven • Web & Mobile Dev • Startups
Sorry, but there is no faster way to show how naive you are than ask a potential funding source to sign an NDA. It's laughable.

A great advisor probably won't do that at an early stage of involvement either.
Sylvain Carle
2
0
Sylvain Carle Advisor
Partner @RealVentures. General Manager @FounderFuel.
Derek Steve Bereit
4
0
Derek Steve Bereit Entrepreneur • Advisor
Startup founder || python neophyte, NY attorney, veteran || general counsel Nimbo || co-founder Symptomly | Techstars

One addition to comments above -- corollary -- don't share stuff that you would typically be covered by an NDA (e.g., trade secrets, source code, financials, Jimmy Hoffa's body)

(not legal advice)
Karin Anne Gregory
0
0
Partner at Furman Gregory Deptula
Having worked as a VC and as counsel for startups in New England, I find the trend is not to sign, you want a trusted partner, and the industry would not value an investor that takes secrets and mis uses them...


Brian Sharwood
3
0
Brian Sharwood Advisor
VP Operations at CareGuide
I'll 100% agree with all the prior voices in the room, but add one small exception. If you're raising money to do an acquisition, there's often a confidentiality clause in the LOI, which will require NDAs be signed before disclosing the target. In that case, most investors will sign - otherwise the presentations look very vague and the investors want to know more.
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