Your Startups Pre-Launch Checklist: Non Disclosure Agreements (Part 6 of 14)

Non Disclosure Agreement from the Startup Garage
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What is a NDA?

This blog post has been prepared by The Startup Garage for informational purposes only and does not constitute advertising, a solicitation, or legal advice. The information contained in this blog post is provided only as general information which may or may not reflect the most current legal developments; accordingly, information in this blog post is not promised or guaranteed to be correct or complete. The Startup Garage expressly disclaims all liability in respect to actions taken or not taken based on any or all the contents of this blog post.

Sometimes when groups are working together, information is discovered that could be detrimental to the other side if it went public. If you are ever in this kind of situation, a non disclosure agreement (NDA) would come in handy. An NDA is a legal agreement between two or more parties that outlines confidential material or knowledge that the parties want to share with each other, but do not want anyone else to know.

When would I get a Non-Disclosure Agreement?

NDAs are most commonly used when two companies or individuals are going to do business together and need to understand each others operational procedures. As you can see, it would be easy for there to be some mistrust between the two parties since one may think the other would steal an idea or process from another. Non disclosure agreements allow the two parties to be able to trust each other, stating that by law one party can not disclose curtain information about another to anyone.

For entrepreneurs, NDAs are extremely important when approaching investors or people who can help them develop their ideas. If an entrepreneur needs to give vital information, that information can be disclosed to outside companies or competitors. Divulging such information can also prevent a startup from filing a patent and claiming trade secret protection. If you are thinking about asking an investor for an NDA, make sure you dont demand it too early in the investing process. Many VCs and angels dont want to sign NDAs early on because it leaves them open to potential lawsuits, and as a result they may sooner throw away your application that sign the document.

What is in a NDA?

NDAs can be unilateral, where only one side wants to share information with the other, or mutual. In general, non disclosure agreements protect information that is not generally known by the public. Common topics that come up in these documents are:

  • An outline that the parties can agree to
  • What confidential means in this case
  • How long this information must be kept confidential
  • Any restrictions or exclusions

Stop by Thursday when we will go over patents, trademarks andcopyrights. Also, stay in the loop by signing up for our RSS feed! Next we will go over what type of business insurance your startup is going to need.


Whether you have a question about Non-Disclosure Agreements or you’d like to discuss our business plan writing services, feel free to contact us for a free consultation!

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About Tyler Jensen

I work with entrepreneurs who are looking to attract investment and get out of the "Garage". I am passionate about helping entrepreneurs start companies that matter. I helped launch over 100 Companies, Non-Profits and Social Enterprises. I consider myself a serial entrepreneur, startup coach & trusted advisor. * Launching New Companies (For Profit, Non-Profit and Social Enterprise) * Expert Business Plan Writer * Extensive Network of Business Relationships focused on Launch & Rapid Growth of New Companies * Startup, Growth, Marketing, Technology, Web, Business Systems * Trusted Advisor to CEO’s & Entrepreneurs * Capital Raising Strategy Development * Startup Team Development The first company I started and sold is VAVi Sport & Social Club which grew to over 25,000 members in six years, was recognized as San Diego’s 30th fastest growing private company in 2006 by the San Diego Business Journal and 32nd fastest in 2007, and sold for over 25X the capital investment.