Do any of you consultants out there ever sign non-disclosure agreements prior to reviewing projects or consulting in a business? If so, do you have any set of terms that must be met before you'll sign the document?

I primarily do tech consulting for venture capitalists and start ups. - I get about 6 requests per week for NDA's. (everyone thinks their project is a winner) ... I generally turn them all down or give them a set of terms ... i.e. only for projects whose contract value exceeds $100k, only after we get to X phase of the project, etc. Is that common?

I definitely lose some work as a result ... but I figure I save myself a lot of legal headaches down the road.

bflynn's picture

NDAs in the VC world are not just common, they are every day. Your experience literally averages about one per day. Yes, they are very common. I am actually a little surprised that anyone would let you consult without one.

Unless you're planning to start your own business in the next few years, there should be no reason not to sign the NDA - although you should become familiar with the terms involved and have a lawyer to help you understand an unfamiliar phrasing. All that an NDA basically says is that you will not talk to someone else about this project and you can be held financially liable if you do. They are something to be aware of, but not something to be afraid of.

A term that you probably need to insist on would protect your ability to reuse techniques. Your value is your knowledge, so you want to make sure you still have the right to your own knowledge after you do work. Unless your work is central to the entrepreneur's company, it should be no problem...and if it is central to the company, don't consult, get on board as a founder.

As a consultant in the world of startups, it is probably more critical to understand the importance of copyright and clarification of those rights, but that is a different topic.


dsfsystems's picture

Thanks Brian - I think I've managed not to sign any in almost a year. The main reason I stopped was because the projects I was consulting on overlapped in their areas of focus. Adding terms like you mentioned would probably take care of that problem.

I'll have to get a new NDA drafted that I can sign/send to clients instead of vice versa to make sure it's right each time.


smholland10's picture


I am coming in late here (10 Months), I deal with these issues on behalf of Clients I negotiate for. I agree with your idea to have your own NDA, you will need at least two.

A one-way confidentiality agreement which you give to employees or sub-contractors and a two-way agreement when Confidential Information will be swapped between the Parties.

Both agreements need to protect and define the Confidential Information. You will also need clauses that have protection for Intelluctual Property. The IP you need to protect is that which you bring, that which the Client brings and any IP that is developed as a result of the engagement.

There will also need to indemnity and liability protection for you, the client and third parties. I would also recommend that you be indemnified against the clients exposing you to the IP of others.

You can cover all of this and more in a Contract (that is in Australia anyway), I would highly recommend you engage a Partner from a reputable Firm.

I have recently had a Lawyer and a Partner from a National Firm review the same document set. The differences were astounding, the Lawyer said it was okay, the IP and restraint of trade clauses should be negotiated. The National Firm came back with a raft of changes and a better agreement for both parties.

A good lawyer is worth his fee 3 times other.

Perhaps the value of good Attorneys/Counsel would be a theme of a Podcast on MT.