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I have an online idea that requires a lot of IT. I am the marketer and can implement on that front but do not have the IT experience or know-how. I would like to find a venture capital company that may want to be involved. It is also an idea that would work well with some other companies if I collaborated. However, if I pitch the idea to another company what will keep them from doing it themselves? Is there any way to protect my idea? Would an investor invest in the idea if it was good enough or should I just find an IT partner and then go to the investor?

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Your answer is here: answers.onstartups.com/questions/22898/… – Joseph Barisonzi Sep 2 '11 at 2:33
Ideas are like babies, we all believe that ours are the best, but it is not usually the case. As Howard Aike once said, "Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats." – A. Garcia Sep 2 '11 at 21:20

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There isn't a whole lot you can do. Very few VCs will sign NDAs and I've heard of several instances of VCs sitting down for a pitch and then funding a similar/competing startup, which means that startup's investment team now has full details on a competitor's business plan, technical implementation, etc.

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up vote 1 down vote

Jodi, protecting your idea while pitching is a tricky one, but basically it comes down to reputation ... many won't sign NDA (confidentiatlity agreements) because they hear 10 pitches that all come "close" every month. It would be a legal nightmare to try and work out what you could and couldn't say, what advice you could and couldn't give.

The key saving grace you have is, they hear 10 pitches which are "close enough" to your pitch every month ... if it stands out to them, they are likely to invest in it. If it doesn't it will be merged in with the others who are competing in the same arena.

Have a listen to the very early "This week in startups" and "This week in venture captial" these topics get discussed on both programs and you get both sides of the picture. What I took away from them in summary is

  • Ripping you off would destory their reputation long term, this is what they really trade on.
  • There are lots of "versions upon a theme" and they will hear many of them, if they are in the space they will back one or two of them, the rest they forget.
  • The idea is the first 5% of the game, the rest is a good team, right market, right approach, lots of hard work and some luck all mixed in. VCs know this and they look for all the elements.
  • They have a lot of irons in a lot of fires, unless you have the perfect plan to replace both google and Apple in one go ... and they think they can do it better without you ... then they may consider getting a team together to take it on, otherwise they are more likely to back you to do it.

That said, yes there are always risks, yes it probably has happened in the past but it would have required more than just hearing the idea for it to have mattered.

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up vote 0 down vote

VCs are not in the business of stealing ideas and most of them will not sign NDAs in the first place. Everyone needs to remembers that these people are sent dozens of ideas every week (if not every day). For the vast majority of them, these business plans are not well thought out or researched. If they signed NDAs before reading all of these "game changing" ideas, they would be dragged into court every other month by a jaded business owner with a bad idea.

As xpda said, ideas are easy, execution is hard. VCs invest in people and patents, not ideas.

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up vote -1 down vote

Mail a copy of your idea to yourself stating that you going to discuss this idea with XYZ. Sign an NDA, if they are fine. In case, they try to hack your idea later, just go to the court and file a case of intellectual property theft. BTW mail the copy using a gmail, hotmail etc. Don't use your own mail service provider.

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Without a signed NDA, you can't sue on the basis of "intellectual property theft". Even then, the NDA cannot necessarily preclude a variation on the idea. Prior use has weight in trademark law when it comes to commercial transactions, but certainly not in the general realm of "ideas". Mailing yourself a statement of the idea is practically useless. – Henry the Hengineer Sep 2 '11 at 6:22
I don't know the exact technicalities, but from my reading on the internet regarding the facebook intellectual theft case, i suggested the answer. There was never an NDA signed between the facebook owner and opposing party(may be the internet records are incorrect). Still the hearings went on, just on the exchange of mails between both parties. – Pankaj Upadhyay Sep 2 '11 at 6:47
The basis of the ConnectU lawsuit wasn't that the "idea" was stolen. Rather, it was based on the breach of an oral contract (supposedly that Zuck's work would belong to ConnectU) and alleged theft of code. Without either of these elements, a "stolen idea" has no chance of standing up in litigation. – Henry the Hengineer Sep 2 '11 at 8:56
No, you can totally sue people for taking your idea, look! xkcd.com/827 – Giles Thomas Sep 2 '11 at 10:09
@Sharply, whats an oral contract ??? , it doesn't mean anything. The case held water only because of the mail exchange. And that's what i am saying – Pankaj Upadhyay Sep 2 '11 at 13:21
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up vote 4 down vote

Don't worry about it. Get them to sign a non-disclosure, and that's it. Your idea is not the valuable part of your venture. It's the execution of your idea that matters. Ideas are cheap. People who can take a good idea and make it a successful venture are what matter. Convince the venture capitalist you're one of these.

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VCs won't sign NDAs and other companies probably won't either unless you give them a very good reason to do so. – Susan Jones Sep 2 '11 at 7:48
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And when you ask for an NDA, they will laugh at you. Sometimes literally. If they aren't total assholes, they might explain to you that no one has time to steal your idea before its sold and you're wasting your short window to impress them with your oh-so-stealable idea. – Sold Out Activist Sep 2 '11 at 12:24
Ideas themselves might be cheap, but in a typical pitch you're going to be revealing your business plan, technical implementation details, marketing plan, etc. When taken together it can all be pretty valuable. – JSstartup Sep 2 '11 at 12:24
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It's not in a VC's best interest to steal ideas: 1) it will harm their reputation which is very important to them, 2) it is easy to prove how the VC stole your work if you did your due diligence, 3) VCs don't have the time, they are generally busy giving out money and sitting in board meetings of other startups who didn't have this personal problem, 4) you're marketing plan will never be unique, ever; your business plan will never be unique, ever; your technical implementation will never be unique, ever. VCs aren't in the business of theft by proxy, they are in the business of making money. – Sold Out Activist Sep 2 '11 at 12:35

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