NDA (Non Disclosure Agreements)

Do you ask  the prospective investor to sign one before going open kimono with your idea?

While it would be great if you could get one, it's truly a bad idea even asking. Why? Well, because it instantly brands you as a complete novice without an inkling of how venture capitalists (or angel investors) work. Indeed, simply asking someone to sign your NDA is an instant deal killer.

Since a venture capitalist may view a thousand or more business plans a year there is no way that he will risk signing an NDA. Too many businesses ideas are simply too much like a host of others. If a venture capitalist were to sign one, he would be open to having an entrepreneur take legal action against him because a year later he happened to invest in a similar idea. Moreover, just imagine the administrative nightmare of trying to keep track of which NDA covers what idea.

Rather than asking for an NDA, make sure that you are dealing with someone who can be trusted.

Venture Capital Documents