We get asked “Will you sign a Non-Disclosure Agreement?” fairly often, to the point that we are proactive, suggesting that a prospect take a look at our Mutual NDA [PDF] and sign it if it would increase their comfort level.
A Non-Disclosure Agreement (NDA) allows us to have a deeper and more useful discussion. We will normally have an initial conversation where the prospect can simply decline to answer certain questions but we can have a high level exchange of information.
This surprises some entrepreneurs who are used to Angels and VC’s telling them that they won’t sign NDA (and sometimes being counseled that they were stupid for asking). You can ask a VC them to sign an NDA as a part of their Board of Director seat since they now have a clear fiduciary obligation to the company, but the number of business plans that yield you a VC on your board is perhaps one in 200.
But we are neither VC’s or Angels, aspiring instead to be trusted advisers on strategy and business development. And it seems to me if you are going to provide strategic advice, you have to be willing to sign and honor NDA’s. Since the start of the year we’ve signed three, and will sign two to four a month on an ongoing basis. Obviously it takes more than a piece of paper to inspire trust, but it’s a start.
That being said, I believe that execution is far more important than the idea, and that good execution means that you need to continue to evolve your initial idea.
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