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Is asking investor to sign non-disclosure document a good idea?

I am meeting up with an investor about an app. I do not have a patent. Is a non-disclosure document a good idea?

Elman

Azerbaijan


2 Responses


Ken Ho

Director @ BEAMSTART

If your company is in the early stage, I highly do not recommend having investors sign a nondisclosure agreement (NDA).

In fact, having investors sign an NDA is a running joke within the investor community - It shows that you as an entrepreneur lack the experience of building a company, and think that your idea is the most important part of the puzzle - It isn't.

Great ideas are everywhere, but great execution isn't.

It is far more important to prove that you're able to execute upon your idea rather than try to "protect" your ideas with legal contracts.

Furthermore at the early stage, even if someone "stole" your idea after signing an NDA, there's little to nothing you can do.

Trust plays a big role when it comes to investing in your business - Having investors sign an NDA shows that you do not trust them, and could even potentially create tension in the relationship (and you will end up losing the deal).

My suggestion is to just execute a lot quicker and better than everybody else.


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Wallace Ho

COO @ BEAMSTART

Asking an investor to sign an NDA is a big red flag for investors. If your product/idea can be easily duplicated by showing people, then probably it ain’t a good one. The executions involved in bringing the product to market & get tractions are far more important than signing NDA

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