An NDA is an agreement between two entities (can be individuals or companies), where they agree to share certain information for a specific purpose. The one receiving the information agrees not to divulge it to others and there are limits in terms of time the agreement holds etc.
For the Entrepreneur, they should consider do they actually need one? They can be expensive to uphold. However it’s true that by having an NDA in place it is a reminder to those concerned that the information is confidential.
For the Investor, you do need to think how many times a similar idea is going to be coming your way. Some larger groups will not sign NDAs because it would restrict them talking to people with similar concepts. Having said that, it is quite common for individual Investors to sign an NDA.
If you do need an NDA the ideal place to go is to a professional, who will ensure that you have a legal and helpful document. On the web however there are various examples of NDAs. One is reproduced below as an example.
* The Business Angel takes no responsibility for any consequences of using this. It is just meant as an example.
Example Non Disclosure Agreement
[name of person receiving information] having an address of [their address] (hereinafter referred to as “Recipient“), in consideration of receiving information regarding an idea entitled “[name of your confidential information] ” (hereinafter referred to as the “Idea“), for the purpose of [eg. deciding on investment] and [any other purpose] , having an address of [their address] , (hereinafter referred to as “Owner“), hereby agree that:
1. Recipient will maintain the information concerning the Idea obtained from Owner in strict confidence.
2. Recipient will not disclose the Idea to anyone other to its employees or otherwise act upon the Idea with anyone else
3. Notwithstanding any other provisions hereof, Recipient shall not be liable for use, release or disclosure of any information that:
a) is required by judicial action after all available legal remedies to maintain the information in secret have been exhausted;
b) is known to Recipient prior to the disclosure to Recipient by Owner;
c) is independently developed by Recipient without any breach of this agreement; or
d) is approved by Owner for use or public release.
4. This Agreement shall remain in force and effect for one (1) year from the date set forth below.
5. The undersigned has the authority to execute this Agreement to hold confidential on behalf of himself and on behalf of Recipient.
This agreement shall be governed by and construed in accordance with English law.
Company: ______________________ Company:_________________
Name: _________________________ Name: ____________________
Signature: ______________________ Signature: _________________
Date: __________________________ Date: ____________________