As noted in another of our
articles, Venture Capital (VC) firms will generally not sign a
Non-Disclosure Agreement (NDA).
Such a situation appears to present an insurmountable hurdle.
Without an NDA in place, trade secrets should not be disclosed to a
VC who doesn't owe an obligation of confidentiality to the
company. Of course, if you expect to receive funding from a VC, you
will be required to reveal information about your venture to
them.
How do you reveal information to VC firms without an NDA and
still protect your trade secrets?
It's important to note that while most reputable VC firms
will want a basic understanding of your vision, they won't be
asking you to reveal trade secrets (certainly not at your first
meeting). Therefore, although the only way to protect a trade
secret fully is not to disclose it, it is possible to find a
balance when working with VC firms. To do this:
