CFI Blog

Eight Reasons Why I Don’t Sign NDAs at Our First Meeting

Secrecy is the enemy of efficiency, but don’t let anyone know it.
– Ric Ocasek

In my last company, I signed NDAs all of the time. There were a couple of reasons that I did so. Firstly, we were in a competitive industry. We partnered with several major defense contractors who were competing with each other all of the time. If A and B were competing, they didn’t want us, a common subcontractor to both, to be telling B what A was doing. The second reason was that we were a small company and didn’t have much negotiating leverage. If we wanted business, we signed NDAs.

As an advisor, I have no such concerns. Entrepreneurs come up with business ideas and it seems like the first thing that 75% of companies do is to draft up NDAs and come armed to every meeting with them.

If you want me to work with you and share my thoughts, don’t expect me to sign an NDA. Here are the reasons why I will not do it:


  • You’ve started out the relationship in a position of mistrust. If you truly expect to have to sweep behind someone you’re working with you ensure that you’ve not found yourself in bed with Aldrich Ames, then you shouldn’t be working with the person in the first place.
  • Your investors won’t sign NDAs. Go to Google. Enter in “do vent” and watch what drops down in the suggested results. It’s a common question: do venture capitalists sign NDAs? By and large, the answer is no. They have a portfolio of investments and do not have the time or the resources to examine every NDA out there and won’t want to expose themselves to needless litigious clients. Neither do I.
  • You don’t have a defensible idea. If it’s truly defensible, get a patent or lock up the people who have the only capabilities to actually do whatever it is that you have in mind. Rare is the idea that is not simply a function of combining two ideas together, and either being first to market or outhustling everyone else should be a much stronger path to success.
  • You should have a rock-solid belief in your ability to execute. You should have passion, a plan, and the idea for the first thirty customers as well as how you’re going to service them before you even consider going to market. And, no, I don’t mean a fifty-page business plan, either.
  • I have better things to do with my life than to try to steal your idea. Helping people is my passion. If you have a business idea that aligns with what I’m doing, then I probably either already have done something similar or, more likely, it’s an opportunity for us to partner together.
  • I have my own reputation to protect. The knowledge of misdeeds will spread like wildfire. Again, I have better things to do with my life than to quell the backlash of doing something I shouldn’t have done.
  • If you’re spending resources lawyering up to get NDAs done, you’re not spending the resources on making your business work. Instead, focus on getting the first customer, then blowing the first customer away, then getting two more, and blowing them away. Lather, rinse, repeat.
  • Even if you think I could steal your idea and harm you, you already have the jump on me. Unless you’re at the idea on a paper napkin stage, you have already thought about your team, researched your industry, and built up a passion for your idea. I have none of those. I would only have an idea and need to get the rest, and by the time I do that, you should already have a customer and be working on a defensible market position.

If this approach means that we can’t work together, I won’t have any hard feelings. Everyone is entitled to make their own decisions about what is important to them, and I am but one voice of billions.

I do ask that you think about whether a questionably defensible document is worth shutting off the free flow and exchange of ideas.

Author Profile

John Davis
John Davis is a nationally recognized expert on credit reporting, credit scoring, and identity theft. He has written four books about his expertise in the field and has been featured extensively in numerous media outlets such as The Wall Street Journal, The Washington Post, CNN, CBS News, CNBC, Fox Business, and many more. With over 20 years of experience helping consumers understand their credit and identity protection rights, John is passionate about empowering people to take control of their finances. He works with financial institutions to develop consumer-friendly policies that promote financial literacy and responsible borrowing habits.

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