Questions

I'm a tech entrepreneur who recently met with another tech entrepreneur who is in the same industry. He wants to potentially work with me but before he can talk about his venture he wants me to sign a non-disclosure agreement.

+1 for what Chris said. I usually wait to sign NDAs until very late in the process because most deals fall through and NDAs can limit one's freedom to act on ideas you had BEFORE you even met Mr. So-and-So. For example, if I later tell a programmer to start working on an app idea from two years ago, then a particularly litigious company could claim that I had wrongfully disclosed some of their ideas. So when someone asks you to sign an NDA in the first or second conversation, politely decline and offer the reasoning above. Say that you'd like to get to know the person better before signing anything. Say you'll be happy to answer specific questions about your experience and expertise. Say that you don't mean to be a stick in the mud, but you've found that two potential partners can have a meaningful discussion about partnership without inking paper. Over the past several years I've learned several things: 1) the people fondest of NDAs are the people least likely to act on their ideas; 2) as often as not, the person asking you to sign one really just wants free consulting; and 3) experienced businesspeople know that ideas are worthless without execution. Thus, they're typically not worried about divulging a few of their secrets because they know that 99% of listeners will do nothing with the information. The last thing I'll say is this: the bigger the promises, the harder the fall. So perhaps find a way to collaborate on a few smaller tasks or projects before hopping into business bed together.

Hope this helps,
Austin


Answered 6 years ago

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