NDA for Investors

Why many investors won’t sign at the pitch stage

A venture investor hears from a lot of companies, and many of them are working on similar ideas. If they signed an NDA for every pitch, any company they later backed could look like a breach to someone. So many firms simply don’t sign NDAs for introductory meetings, and some will pass rather than make an exception.

That usually isn’t a sign of bad faith. Investors depend on their reputation with founders, and one known for leaking plans would hurt their own business. Still, if there’s no NDA, plan what you share with that in mind.

When an NDA does make sense

Things change once an investor moves from listening to digging in. At that point, asking for an NDA is normal.

• Due diligence, when you open a data room with financials, contracts and customer data
• Sharing source code, technical architecture or unpublished research
• Strategic or corporate investors, especially ones in your market
• Investors who are also weighing an acquisition of your company
• Information you’re contractually required to keep confidential, such as customer contract terms

What to share before there’s an NDA

Design your first conversations to work without one. Early on, investors are mostly judging the team, the market, traction and the size of the opportunity, and none of that requires your secrets.

• Fine to share: the problem, your solution at a high level, market, team, traction, headline metrics and what you’re raising
• Hold back: source code, detailed technical methods, unfiled inventions, full customer lists and the terms of your contracts
• If you might file for a patent, talk to a patent attorney before you describe the invention in detail to anyone, NDA or not

Setting it up

A one-way NDA is the usual fit: your company shares, the investor receives. Add your company name so the business is the party, and the investor’s firm if they invest through a fund or company.

For the purpose, “evaluating a potential investment” is clear and narrow. You can name the round, as in “evaluating a potential investment in Acme, Inc.’s seed financing.” The investor may use your information only for that, and share it only with colleagues and advisers who need to know and are bound by confidentiality.

Nothing in the template stops an investor from backing a competitor. What it prohibits is using your confidential information to do it.

Sending it with FastNDA

Create the NDA as one-way with you sharing, pick a confidentiality period and governing law, read it through and sign. You pay $29 when you send it. The investor signs from a private email link with no account, and you both get the countersigned PDF. Open the data room once it’s back.

If they decline, they can leave a note saying why, such as a firm policy or a preference for their own form. You can edit and resend at no extra charge, and if they never sign, you can ask for a refund within 30 days.