Comments for Why No One Will Sign Your NDA

Why No One Will Sign Your NDA

2010-01-13T02:51:25Z

A year ago ReadWriteWeb published an article in defense of embargoes with an outline of how startups can effectively manage embargoes and special releases. Lately, in place of embargoes we've received a few requests to sign non-disclosure agreements. While this may simply be a rookie mistake made by early-stage entrepreneurs, NDAs and embargoes are completely different requests. Sending an NDA is absurd for a number of reasons.

]]> 1. Confidentiality: You just sent a confidentiality agreement to a news outlet. Why the heck would you want a journalist to keep your secrets? Shouldn't we be revealing the brilliance of your products and services?

2. Legality: An NDA is a legally binding agreement between two parties. As Andrew Warner of Mixergy puts it in his post,"I'm not signing a legal document without a lawyer."

3. Trust: In Venture Hacks' Pitching Hacks book the author advises against presenting an NDA to VCs saying, "You might think an NDA is a barrier to entry for your competitors. Instead, it's just a barrier to getting funded." You likely have competitors in the space and if you're not first to market then we've already seen them. An NDA is making you more difficult than your competitors. We'd rather write the story about the person who works with us than against us.

Photo Credits: Marcin Wichary and See-ming Lee

Comment from Marshall Kirkpatrick on 2010-01-12

2010-01-13T03:51:58Z

Well, "no one" doesn't include consultants, right? They sign NDAs all the time.

Comment from Jolie O'Dell on 2010-01-12

2010-01-13T04:23:27Z

Awesome post, dude! I retweeted it - great points you've made.

Just one question: Bert & Ernie?

Comment from Ron on 2010-01-12

2010-01-13T06:56:20Z

People seriously send you NDAs to sign with a press release? Thats just insane!

Early stage co's need to learn that their stupid NDA is A) useless and B) a huge rookie no-no. No one of any worth is going to sign a legal document just to hear your stupid idea

Comment from Neil Robinson on 2010-01-13

2010-01-13T09:32:21Z

I'm with Marshall on this one. As a strategy consultant, I expect to be taken within an NDA. I'm advising clienst about the future direction of their business and to do that, I have to share their plans.

These are usually commercially sensitive so even if my client doesn't ask me to go under NDA, I will suggest it. By doing that, I'm not only protecting my client's interests, but helping to build trust with my client, too.

NDA's are never a bad thing in consulting circles, but I take your point, an NDA in terms of a press release is contradictory.

An embargo is an act of trust between your source and yourself and should be respected - the time it runs allows a journalist to research and prepare a better article than the rush to press we normally have, so again, a good thing.

Comment from Paul Spence on 2010-01-13

2010-01-13T09:44:43Z

At iWantMyName we gave a lot of thought about how best to approach media releases. To us it seems wholly counter-intuitive to impose restrictions on the use of publicity material. As a small company it is hard enough to get coverage on the global stage without creating additional barriers. Journalists have no shortage of stories to cover and start-up companies in particular need to make it easy for them.

As for NDAs, we work on the basis that ideas are a commodity. It's the ability of a company to execute that matters - and you can't patent that.

Comment from Ray Scott on 2010-01-13

2010-01-13T11:48:17Z

Dana,

The link to the Venture Hacks' Pitching Hacks book doesn't seem to go anywhere but straight back to this page. Do you have the correct link? I'd really love to check out that book. Thanks.

Comment from Anonymous on 2010-01-13

2010-01-13T15:41:08Z

Well, yeah, only an idiot would send a NDA to a news outlet. I guess there must be a lot of idiots out there or you wouldn't have to publish this article, though.

But of course in setting up a business relationship with a customer, vendor, or partner, or in talking to a consultant or other advisor, NDAs are routine, even when they are not strictly speaking all that necessary.

It's true NDAs should be reviewed by a lawyer, so no one should expect instant agreement, no matter how "standard" or "routine" someone may claim their document to be.

Another point is that people often insist on 2-way NDAs even when these are pointless, because they falsely value their own information, even when they are planning to publicize everything they talk about anyway. Remember the "legal protection" aspects of an NDA are not quite the same as the "confidentiality" aspects.

Comment from Dana Oshiro on 2010-01-13

2010-01-13T16:41:39Z

Hey Ray Scott, My apologies, we're fixed. Do check out the Pitching Hacks book it's affordable and extremely useful. M- I guess the title should be "Why No One Here Will Sign Your NDA".

Comment from Paul on 2010-01-13

2010-01-13T16:47:33Z

Journalists I can understand with regard to not signing NDAs but I'm with Marshall on this one, consultants sign them all the time, it's a fact of life.

And to echo a previous question - "Bert and Ernie"?

Comment from exponere.com on 2010-01-14

2010-01-14T11:36:11Z

Whilst I totally agree with Marshall as consultants we are asked to and do sign NDA's regularly but...

I disagree with comment #4 from Neil, trust is not built by enforceable contracts but by an auditable history of trustworthy behaviour. In fact one coule even argue that in order to be trustworthy in the first place you have to be trusted. Maybe a chicken/egg scenerio.

Surely NDA's are a statement of mis-trust providing for legal remedy?