The Cult of the NDA

Sun - September 28, 2003 at 03:37 AM in
Business

excerpt from
http://www.frozennorth.org/C509291565/E1939404619/

The cult of the NDA

To all those entrepreneurs with innovative, unique business ideas who want to capitalize on them before someone else does, I have one piece of advice: Get over it.

Riding the tech boom of the late 1990's, there were an immense number of tech companies founded with thousands of innovative, smart new ideas. As a research analyst at an investment bank during that time, I personally visited with hundreds of these young companies, and even invested personally in a handful, either directly or through my firm's venture fund.

Every one of these companies believed they had a unique idea, either a piece of technology, a business model, or a way of building a product. Non-disclosure agreements (NDA's) were the order of the day. One startup even printed its NDA on the back of visitor's badges, just like a software "shrink wrap" agreement: "By accepting this visitor's badge, you agree to the terms of this Non-Disclosure Agreement."

At one point, there was even a venture capital conference called NDA , sponsored by the now-defunct (but apparently rising from the grave) Red Herring magazine.

Unfortunately, none of these ideas were unique. Certainly not unique enough to bother signing a formal contract of confidentiality. In some cases, I visited a half-dozen companies with essentially identical concepts, each blissfully unaware of the others.

get the rest of the story at:

http://www.frozennorth.org/C509291565/E1939404619/