NDAs and Confidentiality — When (and When Not) to Use Them

Non-disclosure agreements can help protect trade secrets, but overuse or poor drafting can hurt trust and enforceability. Founders must strike the right balance.

Why it Matters

A non-disclosure agreement (NDA) can protect your startup’s ideas, code, and confidential plans — but overusing NDAs can signal inexperience and slow down deals. Know when to deploy one, and how to keep it simple.

Founders Checklist

Use NDAs with vendors, contractors, and employees handling sensitive info
Skip NDAs for most investor conversations (unless you’re sharing true trade secrets)
Keep the NDA short and mutual whenever possible
Clearly define what is considered confidential and for how long
Use clickwrap NDAs or lightweight tools when speed matters

Founder Fails

Demanded an NDA from every investor > slowed fundraising
Forgot to sign NDA with contractor > design files reused elsewhere
Used vague NDA > couldn’t enforce it when data was leaked

When to ask for Help

Before discussing sensitive ideas with partners or vendors
If unsure whether an NDA is appropriate
When drafting mutual vs one-way NDAs
If dealing with investors who refuse to sign
If someone breaches your confidentiality terms

Frequently Asked Questions

Q: Do I need an NDA before every pitch or demo?
A: Not usually. Most VCs will not sign NDAs — and asking can be a red flag. Focus on building trust and avoid disclosing secret sauce unless necessary.

Q: What’s the difference between a unilateral and mutual NDA?
A: Unilateral = only one side is disclosing; Mutual = both sides are. Use mutual NDAs with contractors, potential partners, and collaborators.

Q: What should be included in a startup NDA?
A: At minimum:

Definition of “Confidential Information”
Duration of confidentiality (usually 1–3 years)
Carve-outs for public info or required disclosure
Obligations for return or destruction of info