But why won't you sign my NDA?
Sat, 07/10/2004 - 06:53 — jpark (not verified)
Question keeps coming up, and the answer is 'because'.
Long answer: I invest in early stage companies; there are a lot of them. If I sign an NDA early in the investigation process, then there comes a whole host of liabilities, without much likelihood of success.
Funds looking at late stage/mezzanine financing can sign NDA's, because the universe of potential investments is smaller, and the companies they are looking at are big enough to generally do well after financing. It's not uncommon for me to put money into a company, and see that money vanish because of market conditions.
Larger companies have enough weight to withstand some market fluctuations. Smaller companies can just die off, or go into hibernation. Either way, I’m then bound by a contract to not do anything that could help a potential investee, or entrepreneur. It’s not a good situation to be in, so I’ll avoid the problems by not signing an NDA.
Long answer: I invest in early stage companies; there are a lot of them. If I sign an NDA early in the investigation process, then there comes a whole host of liabilities, without much likelihood of success.
Funds looking at late stage/mezzanine financing can sign NDA's, because the universe of potential investments is smaller, and the companies they are looking at are big enough to generally do well after financing. It's not uncommon for me to put money into a company, and see that money vanish because of market conditions.
Larger companies have enough weight to withstand some market fluctuations. Smaller companies can just die off, or go into hibernation. Either way, I’m then bound by a contract to not do anything that could help a potential investee, or entrepreneur. It’s not a good situation to be in, so I’ll avoid the problems by not signing an NDA.
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Jean-Luc Park
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