Do VCs Sign NDAs? How Does That Impact Your Strategy?

Tomer Dicturel
Sep 3, 2019 · 3 min read
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Photo by Helloquence on Unsplash

A non-disclosure agreement sounds like a very good thing when you are a startup looking for help building your business. Yet, many investors, including VCs, have no intention of signing one.

Can you trust a VC, then, to not tell the world about your product or service? How do you know your investment strategy, pitch deck, and needs are not going to be shared with competitors?

Why They Won’t Sign Your NDA

Most of the time, founders believe their idea is a brand new invention, something no one else has thought of or developed. Many times, that’s not always true, and VCs know its more common for founders not to be the first with their idea, making an NDA worthless anyway.

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Photo by Alex on Unsplash

It’s Also Not the End of the World

Why They Care So Much About Not Signing It

Let’s say you have an idea for a business. The VC decides not to move forward working with you. However, in a few months, you learn about their investment in a company that offers something like your own. Did they steal your idea and run with it?

Most likely, that’s not what happened. Rather, they probably found another entrepreneur with a model they liked better, for whatever reason, and invested in that company. By avoiding the NDA, there’s no risk the VC has to walk away from a better idea that’s similar to your own. No VC wants to put themselves into a position where legal problems are likely.

What About Protecting Your Rights?

Remember this big mistake. If you try to force a VC into signing an NDA, they will walk away without a second thought. There’s always another founder vying for their attention! Instead, seek out an investor you can trust and document any sharing of information with them.

Hey! I’m Tomer, an entrepreneur, and maker. You might know me from Mevee, Crane, Slides and now investorintelligence.io among other products I’ve launched! This article is a part of a more extensive series I’m writing mostly based on my experiences and is mainly made of me and my team’s opinions.

I hope this helps you to avoid making the same mistakes I did, and remember to keep shipping!

Please clap 👏 if you found this valuable, and follow me 👈 for more writing like this as I share stories about what software development and entrepreneurship looks like in real life.

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Tomer Dicturel

Written by

Co-founder of Epic.AI -focuses on building Artificial Intelligence and Blockchain technologies:Crane.ai, Slides.ai,investorintelligence.io, simplelife.ai

The Startup

Medium's largest active publication, followed by +706K people. Follow to join our community.

Tomer Dicturel

Written by

Co-founder of Epic.AI -focuses on building Artificial Intelligence and Blockchain technologies:Crane.ai, Slides.ai,investorintelligence.io, simplelife.ai

The Startup

Medium's largest active publication, followed by +706K people. Follow to join our community.

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