Up until recently I was actually concerned about looking for business partners to work with. I had some ideas that I felt were, and still are to some extent, really good potential money makers. Whilst researching NDA's (Non-disclosure agreements) I came across a fantastic article explaining how they are, essentially, worthless and unenforceable. I can't find a link to the exact article so i'll summarise here for you.
Picture the scene; you've come up with this fantastic idea that you think can make a lot of money. The problem is you need investors, or developers and designers to help you, but you're worried they'll somehow run off with your idea and make millions off it and leave you for dust trying to find change in the back of the sofa. What do you do? You could ask them to sign an NDA and keep the idea confidential, but this actually causes more harm than good.
In several interviews with head honchos of companies who provide funding to smaller projects, most of these people say that NDA's actually put them off investing. It's a matter of trust. If you can't trust them to listen to your concept fully and no holds barred, how can you expect a potential investor to trust you with their money? It's a 2 way situation. You need them as much as they need you, so just cut straight to the idea. Yes, there's a chance they will take aspects of your idea and potentially use them in other projects, but here's why you don't have to worry.
Unless you have absolutely amazing communication skills, and let's face it - most of us don't, nobody will understand your ideas better than yourself. Nobody will ever have the passion or desire to work and focus on your project than you, the project 'inventor'. Anyone else will simply be in it for financial gain, and thus they suffer and instant disadvantage.
Asking for an NDA to be signed also shows that you somehow arrogantly think that your idea is unique and has never been done before. In most cases this is simply not true. Pretty much ANYTHING you can think of has already been done in one way or another. Your idea is probably a variation of other ideas and projects, and perhaps you're just expanding on the downfalls of those and somehow making them a little better. Your idea is not unique, it's not revolutionary and it's not going to change the world. Your idea is not worth a billion dollars/pounds/yen/insert your currency here.
Also consider this. Once you've developed your idea, what's to stop anyone copying it once it's gone public? Pretty much nothing. Unless you somehow manage to obtain a patent and copyright on it, you're just prolonging the inevitable.
When it comes to the development of ideas, EXECUTION is the key. To start a company, a business or a large scale project requires approximately 5% invention and creation, and 95% execution. Your idea could be the most fantastic idea in the world, but without the right approach it's absolutely meaningless. Without the right approach it probably won't work.
So next time you're worried about disclosing your ideas, think again. Focus on planning and how you can make it work smoothly instead of worrying about the minor details.
Most people will gravitate to a person who has passion about his idea(s) rather than the idea by itself. Youre better off learning how to execute and finish a plan instead of just having one.
Interesting read indeed. I'd have to completely disagree with your article and I'll share some of my thoughts also.
I disagree completely. The point of a non-disclosure agreement is to in fact protect ideas brought to the table, with hand written signatures all adhering to this business venture or idea, would stand up in court of law no problem if their intentions is to exclude you out of your own business plan. That's exactly what would happen without a contract such as an NDA.
Well isn't that too bad for the VC. The rule of the game would be if you want to hear my idea to make you and myself millions, you will sign this NDA put forward. It doesn't matter if you've heard this idea once or 500 times. If you don't want to hear my idea because you are some arrogant business man already with millions to invest (which they all do), go to a VC that actually respects you and your ideas.
That is a clear catch-22 my friend.
You don't just go with some "idea" and expect to reap 500,000 to 1,000,000 of funding. Trust comes along with how you present your business idea, what materials or efforts you will be bringing to the table among other things such as a true business plan, forcast of revenue, highs, lows, you name it.
In fact, I'm more than positive that companies (new and old) have gone to VC's for money. I can guarantee you that if your business idea or plan was already in motion, and just required funding, your trust is already gained since your plan is already in full effect VS the guy who went to the same VC with absolutely no business in motion.
For you to share this information on TRUST with a millionaire without signing any NDA or legal agreement or document is surely a foolish move and will not get you very far. Take the trust out of this equation. What do you have now? Your idea and their money. Then what do you have? Your idea only. It's simple math.
You are missing the point about VC's. Their position is to fund companies they feel that will move forward and succeed, as they have been doing for many years in the past. Trust goes NOWHERE these days, you can't trust anyone. Never share your ideas with millionaires with vested interests in new ideas or business ventures.
You didn't just say that. Wow, I'm hoping I'm not the only one in this thread that feels completely night and day towards this. So what they are saying is by asking people with money to sign an NDA agreement based on your ideas (unique or not) shows you are going into this with an arrogant attitude? Wrong. Well, to me, it shows "Hey, I'm a business man, I've got an amazing idea, you have some money to make it happen, sign the disclosure so we can move on and get started." ... "Ohh, I see you don't like it... no problem, I'll move on, but I'll certainly move on knowing you and your rich VC's partners can do absolutely nothing in terms of my ideas with your hand written signature on it.
Trademark, Copyrights and Infringement rules would easily apply to someone with intentions in the last statement. if I'm hearing things correctly) thats like saying "Just because your idea is good enough for a VC", who's to stop anyone else on the web from copying my entire business flow with my VC's. Simple. Court of law --- Besides, this is nothing new. This namepros forums legal section is growing rapidly, and this is exactly the same thing going on in there.
Yes, true, but of course your VC will easily determine this on their own. They will never give anyone money for showing nothing. You need more than you think with VC's and it's not just that simple to obtain funding (in most cases) if you are a nobody to begin with.
Agreed. But for the youth on this forum getting themselves prepared for their future on the internet, PLEASE DO NOT DO ANYTHING WITHOUT A LEGAL BINDING CONTRACT such as an NDA agreement. It's there for a reason, not to make you feel "arrogant" or like some "smartass" because you want your ideas secretive. Ideas are what build the future. NDA is there because people with millions could easily cut you out of the equation quicker than you made the phone call to them in the first place.
Anyways, I know you didn't write this, so these views are not directed at you personally. I just see the rich getting richer, and the poor getting poorer. Then again, what else is new?
I responded to lots of your points but felt that this discussion was getting too personal and opinionated. You have your opinion, I have mine. I've taken nothing personal with what you've said
At the end of the day if people want to present an NDA, that's fine. But they should be aware that NDA's are NOT, I REPEAT, NOT a "cut and dried solution." Getting someone to sign an NDA does not somehow magically mean that your ideas are protected, and that person cannot divulge them to anyone else. Far, far, far from it.
Breach of an NDA is a difficult thing to prove. It depends on the content of the information provided, whether or not this information is available anywhere else in the world and how/why this person may have violated the NDA. If you really want to go through the hassle of getting someone to sign an NDA, pitching your idea and then having it potentially stolen by some fat-cat who throws millions at it, go ahead. Then you can deal with the potentially long legal battle that may ensure.
If on the other hand you just want an investor for your project, forget about it. Live with the knowledge that everything you can potentially think of has probably already been thought of, and either actioned or dismissed for various financial or business related reasons.
YES you can be cautious and worry about people stealing your ideas. That's fine and natural. Just be aware that certain funders KNOW that NDA's are worthless, and you trying to present one shows how little you know. People seem to think of NDA's as the ultimate protection, they're not. Ask any lawyer or solicitor and if they're worth their salt they'll tell you.
If you really want to persue an idea, the last thing on your mind should be worrying about people copying or stealing your idea. If you put enough work into it, have enough vision and passion, I'm sure you'll accomplish what you set out to do.
I agree NDA's are pretty much worthless. If you have an idea and think a NDA will protect you then i would say this is the most naive thing one could think.
Trust comes along with how you present your business idea, what materials or efforts you will be bringing to the table among other things such as a true business plan, forcast of revenue, highs, lows, you name it. 
