Being an entrepreneur comes with a number of challenges. You need to find funding, a market for your products, the right team and the right level of protection for your ideas. In some cases it is appropriate to consider your ideas to be worthy of a patent and fall under the protections of intellectual property. Increasingly though, as more and more small businesses are using collaboration as a way to grow, there is another defense that they’re bringing to the table: Non-disclosure Agreements (NDAs).
NDAs are documents which are used to protect the exchange of ideas. For example, if I have an idea for a great new software and I contact a developer, I can choose to have him/her sign an NDA. Depending on the details of the agreement, it more or less binds them to keep their lips sealed and not go on to share or use my idea for any competing purpose. These documents offer a great level of protection and often make entrepreneurs more comfortable in terms of sharing their ideas and collaborating with others.
However an NDA is not always appropriate. It can be misinterpreted as a sign of distrust and preclude any potentially beneficial discussions. Additionally depending on who it is that you’re dealing with, they just might not take you seriously. If I were to walk up to Coca-Cola one day with an idea for a new product and demand that they sign an NDA before I speak with them at all, it is likely that I’ll be shown the door.
It is important to find the appropriate balance to ensure that you protect our ideas without destroying potential opportunities. Speak with a lawyer or someone who is familiar with these agreements and find out whether or not it suits your needs. Form relationships with those who you plan to work with, so that any types of confidentiality agreements that you present will not be misinterpreted.
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