You think you have unique ideas for this new cool incredible product. You are in the midst of creating a prototype while also seeking investors, employees, freelancers, and partners. You have been invited to pitch your idea at a local “shark tank” investor meetup. But you are concerned that people will steal your great ideas.
This is a common dilemma that most every first time startup entrepreneur faces.
You get a Standard NDA (Non-Disclosure Agreement ) Form which you adapt for your specific position purpose and company. It is a first good step.vestors
You secure your first meeting with a potentially serious investor. Prior to the meeting you email the NDA to the investor. The following day the you receive a reply from the investor’s assistant notifying you that the investor does not typically sign NDA’s for meetings with first time entrepreneurs.
It’s time for a reality check.
Most seasoned Investors and potential partners will not sign an NDA at an early stage or with a first time startup entrepreneur.
What to do?
You need to strike a balance between “protecting your ideas” and “promoting your ideas” for the purposes of building your business. Too many first time entrepreneurs never get their start-ups off the ground because they are too protective of their ideas.
That said, it’s important to be strike the right balance between sharing information and evangelizing it.
The first thing to remember is that trust plays a key role in all working relationships. Be selective about “Who you share with”, “What you share”, and “When you share.”
Consider what is really unique and proprietary. Most new business ideas I have come across in many years of meeting with startups are not particularly unique or proprietary. What is important is your ability to implement them – and most often successful fast implementation requires good investors and partners.
Thoughtfully research and assess the people who will be talking to. What is their reputation and track record? Do they have a reputation and record of trust and maintaining confidentiality?
For the things you consider truly proprietary, develop sets of communication – some “general and vague” and others more “detailed and explicit”. Use the more general overview to determine and gain interest with potentially important partners and then follow up with NDA’s before presenting the more detailed and proprietary information.
Assess and maintain detailed dated records of what you have, who has worked on them and who has seen them. Follow up on meetings with dated emails or memos which summarize what was discussed, who attended and also… “whats next.?”
Meanwhile, develop your product and prototype to a point when you can get legal protection for protectable assets. (More on this in future posts.)
Understand the Terms and Conditions and details of anything you sign or verbally agree to.
Be especially careful to establish written agreements with anyone writing software code for you. Understand and be explicit in who owns what. Without proper contracts, the cool platform you had the software freelancer develop for you, well, he/she may be able to go and sell it to someone else. (more on this in future posts).
Robert John Rissé, 14 December 2020