Every now and then an entrepreneur will ask us for an NDA. We do not like signing them and we very rarely do (and never in the beginning of a discussion). We have signed a few in the past and it always had only one effect: it slowed down the discussion between us and the startup.
Below you will find a very quick summary of why I do not think NDAs between startups and VCs are a good idea. Instead of going into the details of each of the points, I will post a list of good blog posts around these topics, since so much has been written about NDAs already. I will aim to expand this list and add new interesting posts as I come across them. Then, I will just send a link to this post to the next startup founder asking for an NDA.
Why NDAs are not a good idea (summary):
- impossible to manage for the VC
- slow down the discussion between startup and VC
- signal lack of trust in the beginning of a relationship
- in practice do not provide protection anyway
- execution of an idea and the team around it is so much more important and defensible than the idea itself
Selected blog posts on the topic of NDAs:
Please let me know if you have any comments or additions to the above lists.