Every week I get several calls from entrepreneurs looking for funding, investor referrals, or just plain old startup advice. More than a few of these entrepreneurs ask me to sign an NDA before they are willing to ask for my feedback and/or advice. The quick answer is that I don’t want to sign your NDA. Think about it from my perspective. I didn’t call you. You called me. You’re not offering to pay me. You’re actually asking me to do something for you. Asking me to sign a contract isn’t really appropriate. For a while I used to joke that I charge a $1,500 NDA fee — people didn’t get the joke so I stopped telling it. At the end of the day, feel free to solicit free advice from me, but please quit asking me to sign a contract.
Anil Dash wrote a pretty good post titled, “One more time: No NDAs“. Anil points out that a lot of people feel the same way. His reasons were pretty good and worth repeating:
- When you ask me to sign your NDA, you’re basically saying, in writing, that you don’t trust me. It’s your prerogative to say that, but it’s a pretty lousy context in which to ask for a favor.
- I have to pay a lawyer to review a document without having any idea why I’m making that investment. No, I won’t “just sign it” without having a lawyer look it over because it’s a legally binding document whether a lawyer reads it or not.
- If your idea’s that good, it’s probably not that rare. I hate to be the one to point it out, but protecting your idea in general, is a fool’s errand — good execution is hard to find, but good ideas are cheap.
- I could get screwed through no fault of my own if some other random person walks up to me and blurts out the same idea that you’ve had. Being exposed to the risk of a lawsuit even if I haven’t done anything wrong sucks.
- If I couldn’t be trusted with your idea, you’d already know about it. There are folks who don’t like me, or who are annoyed by me, but if I’d broken somebody’s trust in regard to their work, I guarantee it’d be just about the first thing you’d find when you Google my name.
- The biggest value I can probably offer you is that I would talk about what you’re working on. If I honor your NDA, and I meet a great investor or potential employee or valuable partner for your new venture, I wouldn’t be able to tell them about it.
About The Author
Alexander Muse is a serial entrepreneur, author of the StartupMuse, contributor to Forbes and managing partner of Sumo. Check out his podcast on iTunes. You can connect with him on Twitter, Facebook, LinkedIn and Instagram.