Start-Ups Are Skipping NDAs When Pitching Investors

It used to be common practice, but now it’s rare for an entrepreneur to request, or for a funder to agree to, a non-disclosure agreement, according to an article by Eilene Zimmerman in The New York Times. Reluctance to sign NDAs is driving some start-up entrepreneurs to file for provisional patent protection.The need for NDAs is questionable, at least according to the funders, and there are practical problems involved in both setting them up and enforcing them. IP theft by a funder is rare, and according to a source on the funding side, each NDA that needs to be worked out sets the project back a solid week, which in the high tech development world can be a big deal. The writer concludes with a list of alternative strategies in lieu of non-disclosure agreements, applicable not just with regard to investors, but also to manufacturers, partners and customers.