Before you can help me, please sign the NDA


I’ve come to see you about a new business venture I have because I think it could be a great opportunity for your business.

This is usually code for “I’ve got a great idea but need your help to make it a great outcome”.

The next thing they usually ask for is for you to sign a NDA.

But hang on, you’re asking for my help and I have to sign a legally binding document before I can help you?

It’s a funny concept when you think about it in the context above; well I reckon it is.

I regularly see entrepreneurs, startups, etc coming in to get advice on and/or present the next big thing that is going to help “make carsales a lot of money”.

The first thing they want is a NDA signed to protect their idea and fair enough I suppose, I would expect the same thing but that’s not to say I can’t help but ask myself “Really; aren’t you asking for my help?”

There is, however, a very good chance that a large online player – not just carsales, I’m sure this applies to all leading online players – has already explored ideas very similar and/or has plans to execute on similar ideas at a point in the future. They wouldn’t be doing their job if they have not.

Of course the online company is not at liberty to say at the time if they have or haven’t looked at similar concepts (this would be commercially sensitive) and in order for them to pursue anything there would need to be documented proof before that meeting and/or signing of the NDA.

Therefore any NDA has to cover this off which can be difficult to understand for the entrepreneur!

I am sure this scenario would be pretty “standard” in any online company of a reasonable size especially with teams of people charged with the responsibility of keeping the company “ahead of the curve”.

I had an example recently where a couple of guys came to see me about their new business. They took me through the plans for their new business showing me their point of difference to anything else out there – “they had done their homework”

“This is leading edge; no one is doing it online and it is waiting to be exploited”, they said.

Before we went to the next step of doing some due diligence on the concept, they wanted me to sign their “standard NDA” which was fine and I explained that it needed to be looked at by our legal experts first.

“But this is a standard NDA that everyone uses”, they said. I countered that “there is no such thing as a standard NDA and I need the right people to look at it first”.

We made a couple of changes that are somewhat mandatory for our business; the changes were pertaining to protecting the business from doing something similar. To them this implied we were going to steal their idea.

What they didn’t realise was that we had looked at a similar technology process some time before – whether we were going to implement the same or a similar process hadn’t been decided but the business reserved the right to do it themselves not remove that right because someone came up with the same idea and wanted to make money from it!

I’ve been a party to literally hundreds dozens of NDA’s and never seen two the same, the other side always needs something changed although the end result sees them usually have the same meaning. They may not though.

Of course getting a NDA signed off before giving away too much detail on your idea is seen as an important step for entrepreneurs and startups; just make sure you always have a legal representative working for you, give you advice before signing one and most importantly, understand that not all ideas are “new”.


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