Why we do not sign NDAs

We are often asked to sign NDAs (confidentiality agreements). We never do that and there are good reasons.

Jeremy Liew at LightSpeed Blog, points to two excellent posts on why VCs do not sign NDAs. i strongly advise you to read those

As far as i am concerned, if i had to through NDAs each we receive a new company, then i would need to do that as a full time job. I would add that one of the core assets of a VC is its reputation. Serious VCs can’t afford to break that by disclosing information on other deals, in particular to its portfolio companies. Quoting Ask a VC

Reputable VCs, however, aren’t going to go around town blabbing about your plans. Besides, if I pass on your deal, I really don’t see the reason why I’d want to talk about it.  And if I fund your deal, I'm certainly not going to do anything to injure my investment. 

Eventually, i would say this, the success of a project is very rarely related to the idea itself. I believe it is more a question of execution, people and….chance. Things you cannot explain in a business plan and that certainly cannot be replicated and disclosed…

 

Comments

[Yaron Galai]

Entrepreneurs - I highly recommend using a "FrieNDA" (posted about it here - http://www.webx0.com/2006/08/frienda.html ) instead of an NDA when you're first pitching your idea to people. This is especially true for VC pitches... by asking a VC for an NDA you will only look silly.