Why asking for an NDA makes you look like an amateur.

I get a lot of requests for a “quick cup of coffee” (or maybe a Zoom call) from people who want to bounce their startup idea off of me and get input. I want to be helpful, so I typically say yes, but if you then ask me to sign an NDA you have just exposed yourself as a clueless amateur and I will opt out of the meeting.

Here’s why:

• It creates liability for me. If you tell me about your amazing idea for AI-powered toasters, and then next year Amazon comes out with AI-powered toasters, your Uncle Dave with a law degree will want to sue me claiming I told Amazon about your idea. You’ve asked me for a favor by having a quick chat, and now you’re going to ask me to take on personal liability in order to do you a quick favor? Goodbye.
• It’s a sign of a worthless idea. Experienced entrepreneurs know that ideas are cheap; execution is hard. What makes a venture succeed is the team, the technology, the distribution, the capitalization, the ability to get to Product-Market Fit, etc, etc, etc. Asking for an NDA is like admitting that the only thing you have is an idea that anyone could execute on. You have nothing else. Sad.
• A lack of trust is always giant red flag. If you’re not a very trusting person then you’re probably also not very trustworthy. All business relationships are based on trust, and if you think that “lawyering-up” in advance of a cup of coffee is the way to build relationships then you’re not likely to be someone I want to do business with.
• Your naiveté is showing. If your Uncle Dave with a law degree is telling you to get NDA’s before any meeting, you are getting really bad advice. Talk to an actual startup attorney and they will tell you that NDA’s are very difficult to enforce. They provide you with a false sense of security that is best avoided. Also, you are focusing on the wrong thing and will likely fail.

Here’s the bottom line: No professional investor is ever going to sign your NDA for a first meeting. None. Zero, for all the reasons I’ve outlined above. This doesn’t bother great entrepreneurs because great entrepreneurs are skilled at telling a compelling story without giving away any trade secrets. That’s an incredibly important skill that every great entrepreneur has. Asking for an NDA is admitting that you’re not that entrepreneur.

So let’s have that cup of coffee. I’m looking forward to hearing about your startup and I’ll try to be helpful with input. And certainly if we were to engage further (investment, consulting, etc) then my expectation is that our contract and/or investment docs will have strict nondisclosure language in them. That’s standard.

But don’t ask me for an NDA in return for having a cup of coffee with you. That just annoys me and makes you look silly.