Why VCs Don’t Sign NDAs and You Shouldn’t Worry About It

Many entrepreneurs are incredibly sensitive to sharing their billion dollar idea with anyone. The thought of sending a pitch deck to a venture firm, or even pitching their idea on stage is scary…what if someone steals the idea?!

Venture capitalists obviously have the money to steal any idea, so why would you just hand them the blueprints to a billion dollars?

NDA’s seem like a great way to protect your valuable idea but this can actually hurt you in the long run. Requiring an NDA stops entrepreneurs from eliciting feedback about the solution to the problem, which probably will need refinement and criticisms. Instead of focusing on the idea, you should focus on the problem it’s trying to solve.

When a VC wants to hear a pitch, and is unwilling to sign an NDA, some entrepreneurs are hesitant to share their idea, even though it could lead to a payout. Here are some reasons why you may want to take a step back from the NDA and encourage a free flow of ideas.

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Originally posted on Entrepreneur.com | By John Rampton

2017-05-23T11:36:47-06:00 August 3rd, 2015|

About the Author:

The Wayne Brown Institute was founded by the late Dr. Wayne Brown in 1983. Dr. Brown held positions in mechanical engineering and served as Dean of the College of Engineering at the University of Utah. In addition to his academic postings, he was a founder of Kenway Engineering (HK Systems), TerraTek, NPI (Agridyne Technologies), the Utah Innovation Center (the world’s first venture accelerator/incubator) and Utah Ventures (now Pelion Partners, Utah’s first and largest venture fund). By virtue of his academic, government, and business background, Dr. Brown was a leading authority in technological innovation and entrepreneurship. Many of the world’s science/research parks, innovation centers, and incubators have their roots with Dr. Brown. In addition to his many accomplishments, he has affected the role of government in innovation and entrepreneurship as the architect with Roland Tibbitts of the national Small Business Innovation Research (SBIR) program. Later, as head of the State’s Science Council he spearheaded legislation to create the Utah Technology Finance Corporation (UTFC, now Innoventures), and Utah’s Centers of Excellence program. He successfully negotiated with the U. S. government to obtain military land for the establishment of the University of Utah’s Research Park, and key in the establishment of the USU Research Park and Timpanogos technology Park in Orem (Novell campus). His knowledge, experience and passion live on in the Wayne Brown Institute, its staff, its investor-led Board, and its countless supporters.