Several times this quarter entrepreneurs have asked me for advice, I’ve obliged, and then they’ve promptly given me an NDA to sign. My response is always the same: unfortunately, I don’t sign NDAs to hear startup pitches. Mark Suster’s great post On NDAs and Confidentiality covers all the major points:
- Processing more legal documents is time consuming and annoying
- After talking with hundreds of entrepreneurs, it’s not possible to keep track of which ideas came from which entrepreneurs
- Trust needs to be at the core of a successful relationship, and not initiated by a legal document
- NDAs are difficult to enforce resulting in little value
This is the annual no NDAs reminder for most entrepreneurs (note: investors do sign NDAs for growth stage startups).
What else? What are some more thoughts on NDAs between entrepreneurs and investors?