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Tell Me No Secrets

You may be turning VCs off if you're asking them to sign a nondisclosure agreement.

This story appears in the May 2003 issue of Entrepreneur. Subscribe »

The business plan that arrived in the mail looked normal enough. But as the VC turned the very first page, an ominous legal document stopped him dead in his tracks. The page was a verbose, rambling nondisclosure agreement--the dreaded NDA. The VC recoiled in horror and pitched the packet into the shredder.

Sound like pulp fiction? It's not. Entrepreneurs everywhere are setting themselves up to fail by using nondisclosure agreements inappropriately. All too often, entrepreneurs insist on secrecy--for their technology, their business plans, even their core idea--to the detriment of funding, partnerships, press and even sales.

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