Innovators and entrepreneurs often encounter a familiar predicament: how do I tell people about my idea without them stealing it?
This conundrum pops up in myriad situations, such as when an entrepreneur engages in discussions with potential sources of capital or when an inventor is looking for a partner to help make his or her idea a reality.
Executing a non-disclosure agreement (“NDA”) prior to sharing any sensitive information provides a simple and effective solution.
What is an NDA and How Does it Protect my Confidential Information?
“Simply put, it is a contract through which parties agree to keep certain information confidential.”
An NDA (sometimes known as a confidentiality agreement) is a binding agreement between two or more parties under which some or all the parties agree to disclose confidential information for certain purposes under the condition that the other party or parties keep the information confidential and restrict access to such information by third parties.
Simply put, it is a contract through which parties agree to keep certain information confidential. NDAs can be used to protect almost any type of confidential and proprietary information, including trade secrets.
An NDA in Action
To illustrate the use of an NDA, consider a person who has a revolutionary concept for a business. They wish to commercialize their idea and draw up a viable business plan. All they need is an injection of capital to help them through some early costs.
Despite knowing several local investors who might be interested in the business, the future jetsetter is reluctant to share their brilliant idea for fear that it may materialize a few months down the road with one of these investor’s backing and a rival executive at the helm.
After all, the entrepreneur does not have any formal protection for their concept, whether in the form of patents, trademarks, or copyright.
The entrepreneur can temper this concern by executing an NDA with each potential investor. The NDA can restrict the investor from discussing or utilizing any of the information or knowledge related to the barbershop concept, thereby facilitating a free and frank discussion between the parties.
Moreover. The use of an NDA allows the entrepreneur to shop the concept around to several different investors in the hopes of finding the ideal backer without the worry of losing control of their idea. The entrepreneur is free to explore the market without risking sensitive and commercially valuable information.
NDAs are a simple and effective option for protecting confidential information across every stage of your business. affordableLaw offers you NDAs tailored to the unique needs of your business for as little as N15,000. Get an NDA drafted for you here.
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