Startup Funding Espresso -- Signing NDAs With Investors (When and Why)

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing. I've had startups approach me and give me one or two lines about their startup. When I start to ask questions, they say they can't tell me anything more without signing a Non-Disclosure Agreement or NDA. I often find this puzzling, as investors don't sign NDAs to find out what the startup business is. They only sign when they understand the startup business and want to find out more about the proprietary details. These details include specific clients, their contact information, details behind the intellectual property, in particular trade secrets, and more. It's best to have non-confidential information available to share with the investor to educate them about the business at a high level. It's best to ask for an NDA when the investor is going into diligence. Startups should examine their business and tease apart what is general information and what is proprietary. If the information is already on your website or could be obtained by a customer using your product, then it's not proprietary. It's best to sign NDAs on information that is truly proprietary and only when the investor is interested in pursuing diligence. Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.Let's go startup something today.___________________________________ For more episodes from Investor Connect, please visit the site at: http://investorconnect.org Check out our other podcasts here: https://investorconnect.org/ For Investors check out: https://tencapital.group/investor-landing/ For Startups check out: https://tencapital.group/company-landing/ For eGuides check out: https://tencapital.group/education/ For upcoming Events, check out https://tencapital.group/events/ For Feedback please contact [email protected]