Why Founders shouldn't care about NDAs

Jeffrey Carter - Hyde Park Angels

No Angel Investor or VC Will Sign an NDA

Carter is an experienced angel investor who helped found Hyde Park Angels group. He blogs primarily on politics, economics, trading, and finance. In this post he explains why, as a startup founder, you shouldn't care too much about getting an NDA from a potential investor.

Key Points

1. NDAs take too much time. While you're spending your time going back and forth revising the wording of a legal document so you can talk to an investor, your competition is beating you.
2. It isn't practical for an investor to maintain legal documents on every company they listen to
3. An NDA isn't the only thing that will keep people from stealing your idea

Carter's Conclusion:

Early stage companies are about execution. Who can take their idea from brain to seed stage? Then, who can get it from point A to point B and so on. Those people win the race while the NDA people are waiting for investors to sign.

Takeaway:

A company that is in such an intense competetive environment that they can't speak to anyone without an NDA would be wiser to spend the time beating their competition. Almost all NDAs are too far reaching to be reasonably signed on the first draft. VCs don't want to tarnish their reputation by violating the interests of a company they've met with, so they're pretty much pointless anyway.

Don't waste your time. Don't waste an investors time. Focus on execution, not legal issues.