Big News: FounderDating is joining OneVest to build the largest community for entrepreneurs. Details here
Latest Notifications
You have no recent recommendations.
Name
Title
 
MiniBio
FOLLOW
Title
 Followers
FOLLOW TOPIC

Question goes here

1,300 Followers

  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur

How to politely convince VCs to sign NDAs?

The idea is simple and quite generic but the solution (execution) is very innovative. Most VCs and investors are reluctant to sign NDAs. What is your diplomatic communication skill to convince investors to go for signing an NDA?

9 Replies

David Lerner
1
2
David Lerner Entrepreneur
Media Business Development Consultant
You don't. Asking for an NDA is a rookie move. Ideas are a dime a dozen, its about execution. Do you have a good team? Do you have a working product/service? Great, make sure you show them in the best light.

If you have a going concern with real customers, customer list, etc. Then maybe you can ask for an NDA on that information. But an NDA for an idea? You will only open yourself up to ridicule.

The best advice I can give you is to bootstrap your business, and get friends and family to give you some seed money. The best time to get investment is when you really don't need it.
Joseph Wang
2
1
Joseph Wang Entrepreneur
Chief Science Officer at Bitquant Research Laboratories
You don't. As an investor, I say bluntly that I will not sign an NDA on the first meeting, and if you need money from me, you need to think of something else.

VC's and angel investors use an NDA as something of a filter. If you have an idea that is so fragile you need an NDA on the first meeting, then it's likely to be unfundable. Also, I don't want to tie my hands if I happen to come up with the exact same idea. The other thing is that a lot of the value that I add happens to be connecting startups with each other, and signing an NDA will get in the way. Also, I can tell you "yes this is a great idea, but there are five other people that I've talked to that are working on exactly the same idea. Here are their e-mail addresses and you should work with each other."

I do sign NDA's, but its invariably later in the process.

Also, one easy strategy that you can deal with is just don't disclose your secrets. A pitch can be ten minutes to one hour. Rather than getting an investor to sign and NDA, you can just say "here is the secret sauce". If your secret sauce is a basic idea, then the odds are that someone else will think of it. If your "secret sauce" are customer lists, some weird tech or skill that only you can implement, that's great. It's pretty frequent that I've been in conversations with startups, and I've politely asked a question and they've politely told me that the answer is a secret that they'd rather not share with me.






Barry Burr
1
1
Barry Burr Entrepreneur
founder, Barry Beams llc, a startup to re-light your night.
Do not even try. Its a terminal breach of protocol in investor relations. You will be seen as the amateur that you are, projecting an impression that you will be equally unsuccessful and alienating in other contract and business negotiations. Rule without exception, do not ask a VC, Angel, or any outside investor to sign an NDA. If you don't get it yet why not, then you're not ready to be funded by any reputable investor that you would want to get funding from. hth, Barry Helmet Side Up, Barry * Oculus, Re-Light the Night Barry Burr p(323) 487-2002 Barry@BarryBeams.com f (650) 968-1228* "His job is to shed light, and not to master" ... Robert Hunter
Max Garkavtsev
1
0
Max Garkavtsev Entrepreneur
CEO at QArea, TestFort
In general I would agree about VCs (don't try if you care not to lose them), but as for Angels - I think you have chances. And if you don't have funds yet, maybe Angels is your most realistic bet at this stage anway.
Brendon Whateley
1
0
Founder at Kugadi
If you feel the need for an NDA before being deep in the due diligence phase, then you are probably doing things wrong. How in the world are you going to sell a product that you can't discuss?
Stan Podolski
1
1
Stan Podolski Entrepreneur • Advisor
CEO at Nimble Aircraft.
Politely?

... I think .50 should work

Don't ask them to sign an NDA, that's it
Alok Jain
2
0
Alok Jain Advisor
Curious and Creative
VCs get pitched so many ideas, it's not unlikely that multiple entrepreneurs pitch same/similar idea. VCs cannot take legal responsibility by signing an NDA.
Boris Kogan
1
0
Boris Kogan Entrepreneur
Startups and innovation
VCs and investors will not sign an NDA in order to hear a pitch, for many good reasons.
Alan W. Urech
1
0
Alan W. Urech Entrepreneur
Managing Partner, Stoney River Capital Partners, LLC.
I agree with Dean completely. Asking for an NDA to me as an angel investor tells me that you are not very learned in the process. The reason being that moost investors get hundreds of business investment opportunities per year and the likelyhood of some of them being similar is great. That could put the investor in a legal situation if someone says that the idea was used. The completion for investment is the other potential investments the investor could have with less risk. This is all weighed in the wash. Provide publicly available information about the business first though a website to gauge interest. "We design, market, install and service a unique cloud-based personal health portal." Something like that. Don't get down in the weeds about your secret sauce.
Join FounderDating to participate in the discussion
Nothing gets posted to LinkedIn and your information will not be shared.

Just a few more details please.

DO: Start a discussion, share a resource, or ask a question related to entrepreneurship.
DON'T: Post about prohibited topics such as recruiting, cofounder wanted, check out my product
or feedback on the FD site (you can send this to us directly info@founderdating.com).
See the Community Code of Conduct for more details.

Title

Give your question or discussion topic a great title, make it catchy and succinct.

Details

Make sure what you're about to say is specific and relevant - you'll get better responses.

Topics

Tag your discussion so you get more relevant responses.

Question goes here

1,300 Followers

  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
Know someone who should answer this question? Enter their email below
Stay current and follow these discussion topics?