Tell me more ×
Answers OnStartups is a question and answer site for entrepreneurs looking to start or run a new business. It's 100% free, no registration required.
up vote 4 down vote favorite
1

I have an idea for a company and I want to share it with potential investors. I'm a bit concerned about my ability to protect the idea. Should I get them to sign an NDA? Would that scare investors away?

share|improve this question
3  
No. and any real investor would not sign anyway. They may take the time to explain why they won't but most likely they will put you on the list of people who have not reached a certain level of sophistication yet. This is a common question. The answer is always the same. – TimJ♦ Oct 17 '12 at 21:00
I have deal with over 50 investors. Only unsophisticated investors would sign any NDA and you absolutely don't want to take any money from them. – Apollo Sinkevicius Oct 17 '12 at 22:20

1 Answer

up vote 13 down vote accepted

The short answer is NO!

Asking your investors to sign an NDA is impractical as most of them see dozens if not hundreds of ideas each years so they will never be able to manage their exposure if they have to sign an NDA for each idea they hear.

At the same time, asking an investor to sign an NDA is telling the investor that you are probably very concerned about sharing your idea and this fear has prevented you from validating your idea enough with the market.

I actually wrote a post about this a few years ago if you want to read a bit more - http://www.yanivnizan.com/2009/08/signing-nda-with-an-investor-good-idea-or-a-bad-one.html

share|improve this answer

Your Answer

 
discard

By posting your answer, you agree to the privacy policy and terms of service.

Not the answer you're looking for? Browse other questions tagged or ask your own question.