I've had three entrepreneurs ask me to sign NDA's recently. As an entrepreneur, everyone knows that NDAs really aren't worth the paper they're printed on. I occasionally used them with big companies, as a means of communicating to the big company that I cared about the value of our intellectual property. But, they generally just slowed things down and became an item that future acquirers asked about why I was inconsistent in the use of them. So, I stopped using them. Now, as an investor, entrepreneurs should know that most knowledgeable investors won't sign NDAs. As an investor, I see lots of deals -- some of which are similar to others and I don't want to have an entrepreneur :
- Feel like they gave me an idea that is theirs and to have a piece of paper that leads to some legal letter. That's lots of unnecesary brain damage for me.
- Angst about their intellectual property so much that they won't talk about it without legal paperwork.
- Believe their intellectual property is so unique that they're afraid to talk about it. I think ideas are only good when feedback is provided and the whole NDA process seems to limit the entrepreneur's ability to get lots of feedback