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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 documentstopped him dead in his tracks. The page was a verbose, ramblingnondisclosure agreement--the dreaded NDA. The VC recoiled in horrorand pitched the packet into the shredder.

Sound like pulp fiction? It's not. Entrepreneurs everywhereare setting themselves up to fail by using nondisclosure agreementsinappropriately. All too often, entrepreneurs insist onsecrecy--for their technology, their business plans, even theircore idea--to the detriment of funding, partnerships, press andeven sales.

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