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After a phone call, I had my first meeting with a VC 2 weeks ago. He sounded very, very positive, wanted to send me a contract w/ a term sheet etc; and since he has been pretty unresponsive and non-committal...and i'm questioning how much I should have shared...

Now, I have another big meeting this week with a more prominent firm, and I'm curious if it's viable to walk in, share the market research, the size of the opportunity, why competition has failed, and then only show some of my solution. I don't want to continuously disclose my unique approach to everyone with cash... Anyone have any insight to this? It seems like VCs have all the power, and can do what they want with your ideas (like pitch it to their portfolio)...Do they ever sign NDAs up front?

Thanks!

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3 Answers

VCs typically do not sign NDAs early on in a discussion as the opportunity cost is too high. Managing a web of NDAs that have different terms and durations is extremely complex. Perhaps more important for you, VCs want the flexibility to invest in similar companies to yours.

Presenting a limited solution will create more cycle time for you and the VC to make a decision, so it's not ideal. For many VCs that is enough 'evidence' to stop the discussion.

Absent a legal obligation or a limited presentation, you may want to appeal to the VCs emotions and intellect. Be upfront with the fact that you feel like you are sharing what you believe is sensitive information and that you would appreciate the info being held in confidence: it's a soft approach. And VCs may have already seen something similar to your idea.

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that helps a lot, thanks – user7893 Feb 20 '11 at 18:52

My sense is that you should only talk to investors you are willing to trust and tell them everything. It is hard enough to get the attention of an experienced, reputable investor not to have to try to pitch them without the full impact of your proposal. If you are dealing with someone worthwhile, they will not have built a strong reputation by stealing ideas from entrepreneurs. If you waste their time with a meeting in which you are only willing to talk in generalities and withold what you consider to be the essential elements of your plan, they will almost certainly pass and you will not even have given it your best shot.

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I would limit what I share and get a contract for them to sign outlining my plan and stating what we discuss doesn't leave the room. But I also have an excellent idea but Im looking for VC's that can help me. If you dont mind would you please share some info with me on how to get into contact with some good VC's please.

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absent social connections, i would just browse their sites. oftentimes, they invite early-stage entrepreneurs to shop their ideas in exchange for advising...check general catalyst, for instance – user7893 Feb 20 '11 at 18:54

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