To NDA or Not to NDA?

We all have heard more than once that "VCs will NOT sign NDAs, don't even ask!". And we've also heard and said many times that "Ideas are cheap" and that many first time entrepreneurs are far too precious about their great ideas. They keep them top top secret, ask prospective customers to sign an NDA, and in general undermine their own ability to get useful real feedback on the thing they want to create. The attached article is interesting in its analysis of those tradeoffs:

"Not everyone agrees. Thom Ruhe, vice president for entrepreneurship at the Kauffman Foundation, said the declining use of N.D.A.s “is certainly not in the interests of entrepreneurs. It favors the V.C.” Although it is rare that an investor steals an idea, Mr. Ruhe said, it does happen. “But in the skewed echo chamber of the Valley, and the sycophantical networks that aspire to be just like them,” he said, “they’ve made the easier and less morally defensible position — no N.D.A.s — the coin of the realm.”

 

Posted on July 3, 2014 .