The NDA question

Do you sign NDA/NC?

 

Or If you sign this NDA/NC we can give you more.

 

This is a challenging question to ask and answer.

 

In part, because the perception can be that if you’re asking for an NDA/NC then you don’t know what you’re doing.  Or that you haven’t been asking professional/institutional investors for a while.  Since most all will say no.

 

There is a good reason for people who are examining hundreds of business plans a quarter to say no to an NDA.  We see too many deals to keep track of which ones have which details.  Often time we fail to connect an entrepreneur’s name with a company, a company’s name with a technology, and a technology with a marketspace.  So asking me to remember which ones have an NDA and which ones don’t is too much. 

 

I also can’t help you, or other companies if I’m spending all that effort in remembering which deals have an NDA and which ones don’t.  When do we sign an NDA? When someone is in deep due diligence on a company.  At that point it makes sense since the investor has already put in 45 days of effort into this company, and you’re now one of a few that they might be looking at that year.

 

Asking someone to provide their experience, network, expertise and reputation and then putting up an NDA might leave a bad feeling in the communication.  It’s easy enough, and correct enough to say no to an NDA.  In a role where finding reasons to exclude deals is as important as finding good deals, this can be a fast way to categorize businesses.

 

Remember, it’s OK for an investor to miss a good deal.  Investors are only punished when they say yes to a bad deal.