Confidentiality: a non issue (in 99% of cases)

The level of the confidentiality concerns in the entrepreneurs community is in my view inversely correlated with the level of development of the Venture Capital “ecosystem” in a given country.

Here is a non exhaustive list of reasons why entrepreneurs shouldn’t be too concerned in disclosing their plans to Venture Capitalists:

1)      If you cannot or don’t want to you’ll not be funded. Nobody write checks for “good ideas” that cannot be disclosed (obviously). Also most VCs are willing to sign NDA only if and when they are really interested and realize there is some serious IP needing to be protected (first you need to get them interested).

2)      Venture Capitalists aren’t in the business of starting companies themselves (even if they wanted to I guess most won’t be able to)

3)      Most of the time ideas aren’t that important nor really “that” new and what matter is execution. Execution cannot be copied.

4)      Even if your supposed competitor were aware of what you are doing that wouldn’t matter as much as most entrepreneurs think.

What could happen is that Venture Capitalists might be after information to develop some kind of industry knowledge base. Is such case the risk is that knowledge acquired by looking at your BP or meeting with you, allow the VC to better assess other opportunities they are considering (either simultaneously or in the future). Its not a tragedy and in any case you cannot do much about it.

Most (at least those caring about reputation) will refrain from photocopying your data and give them out to others if they invest in them.

In any case my advise is that if as entrepreneur you have valid reasons to be very deeply concerned about confidentiality you should try to limit your contacts to a reasonably low number of investors and possibly pick those with a solid track record (in term of ethical behaviour).

Comments

[MichaelAnn28]

That is understandable that money can make us free. But what to do if one does not have money? The only one way is to receive the mortgage loans or credit loan.