On signing NDAs

On signing NDAs

Recently we have been asked to sign NDAs quite a bit. As a result, we had a long discussion about NDAs and here are our views on them.

The problem is that most NDAs are overkill. They do not acknowledge that we have had other clients in the past and will have more in the future. We do not want to get caught in the no-win situation such an NDA puts us in. We do not want to be exposed to a nonperformance or honest-services prosecution.

And to be honest, we do not have the interest or resources to take your ideas and create anything out of them. Most ideas are worthless to us alone. We need your domain experience, contacts and access to funding to execute on them.

More importantly, we would like to consider ourselves respectable and trustworthy guys. It does not take long to ruin one's reputation by blabbing or stealing other people's ideas. This is especially true in today's digital world. All information is available for anyone with a quick Google search.

We have seen nice NDAs too. It is not a problem to sign something that goes like: "We will not share any materials or ideas conveyed by you to us to third parties. We will not steal your ideas, run and execute on them to create a competing service ourselves. At least for the next year or so.”.

But more often than we would like, the NDA is wide. And we cannot sign something that in effect binds us from doing anything similar for the next two years.

For example, during our discussions together we come up with a way to list information about events on a website in a unique way. Then having signed your wide NDA, there would be a threat of getting sued, for doing something similar in another project that is not in any way competing with what you're doing.

That is the reason why we are against signing an NDA in general. Things change of course when you staple a big enough cheque to it.