Truth about non-disclosure

According to Wikipedia, venture capital (VC) is financial capital provided to early-stage, high-potential, high-risk start-up companies on the back of a novel technology or business model – so is it really any wonder so much emphasis is placed on maintaining the confidentiality of information related to an entrepreneur’s innovation, novel technology or business model?

While we encourage a robust trade secret policy, as well as the use of non-disclosure agreements (NDAs) when the situation calls for it, start-ups often jump to the latter with- out considering whether an NDA is appropriately crafted or, more likely, whether it is appropriate at all.

Historically, venture capitalists (VCs) have been loath to sign NDAs, a position which has evolved for a variety of reasons.

Though NDAs are often viewed as commonplace, start-ups must remember that they are, at heart, a legally binding document. Most VCs are unwilling…