NONDISCLOSURE AGREEMENTS

A nondisclosure agreement (NDA) should be the first agreement put in place between the parties of any investment event. Not all investors agree with this, however. Many investors, including some very reputable venture companies, take the position that they are in the business of looking at businesses and an NDA would be needlessly constraining to them. In these situations, the business needs to determine the extent of the risk they are willing to take. It may be obvious, but it’s worth stating here: Not all due diligence is conducted by earnest buyers and investors. Strategic buyers are often competitors who are trying to capture additional market share. There are lots of sharks in the venture capital ocean waiting to ...

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