An NDA (non-disclosure agreement) is a contract in which one or both sides promise to keep certain information confidential. It's a useful tool, but founders often overestimate how much it protects an idea.
When an NDA makes sense
- Before a possible co-founder sees your code, customer list or detailed plans.
- With freelancers, agencies and contractors who work on your product.
- When you share real business secrets: a recipe, an algorithm, pricing, supplier terms.
- In partnership talks with a larger company.
- Before due diligence with a buyer or a strategic investor.
When it doesn't
- In a first meeting with angels or venture investors. Most of them won't sign one; they see too many similar ideas. Share the pitch, keep the secret details for later.
- When you're just describing the idea. An idea alone is rarely valuable, and asking for an NDA too early can make you look inexperienced.
- In customer interviews. You want people to talk openly, not read legal text.
What a good NDA contains
- Mutual or one-way: who has to keep what secret.
- A clear definition of confidential information, and what's excluded (public information, things they already knew).
- The purpose: what the information can be used for.
- How long it lasts: 2–5 years is common.
- What happens to the information when the talks end (return or delete).
- Governing law.
Your best protection is speed and execution. Share less instead of hiding behind paperwork: tell investors what you do and why it works, not every detail of how.