Here is a related HN thread (http://news.ycombinator.com/item?id=986990 http://news.ycombinator.com/item?id=986990) centered around a piece entitled "Reasons to

Here is a related HN thread (http://news.ycombinator.com/item?id=986990 http://news.ycombinator.com/item?id=986990) centered around a piece entitled "Reasons to Drop NDAs." Because the theme is the same in the post here, I repost below my response to the prior piece: "It all depends on what one means by 'NDA.' If it means the piece of paper people ask you to sign before giving you a pitch, the author's points are largely well taken. On the other hand: 1. If a company fails to have its employees sign NDAs, it potentially jeopardizes its trade secrets (to protect something as a trade secret, an employer must show that it took reasonable steps to treat the proprietary information as trade secret information and having employees sign NDAs is a key component of this). 2. If a supposed suitor approaches you about buying your business, and you fail to sign an NDA, then the information disclosed in the buying process - which can include your most intimate and valuable business techniques and plans - can potentially be lifted by the would-be suitor and used competitively against you after the suitor abandons the deal. 3. If you attempt to negotiate a potential strategic partnership, and you trade proprietary information relating to what would be a valuable joint venture, and do so without an NDA, then, again, the prospective partner can betray you and use your valuable information against you. 4. If you let your sales people develop all of a company's leads in their own name and using their own resources, without confidentiality agreements (i.e., NDAs) acknowledging that the customer information is valuable proprietary and confidential information belonging to the company, you leave your company exposed to having its customers raided without any legal recourse. Are sales people prone to do this? Absolutely. They tend to think of customers as belonging to them and not to the company. Without the basic legal protections afforded by NDAs, a company runs serious risks of losing its customer base to those who might chose to raid it. 5. Other examples could be multiplied, almost ad infinitem, depending on the particular business context, of how it is positively naive and, indeed, stupid, to proceed in various business dealings without benefit of the legal protections needed to protect confidential and proprietary information, that is, without an NDA. While I think the author's basic points make perfect sense in the fast and loose world of 'pitches,' they are not generally applicable in the world of startups. As long as there are business dealings in which any party has valuable information that it wants to keep secret, NDAs will continue to serve valuable purposes and are necessary and, indeed, indispensable to the transactions involved. This is from the perspective of one who has specialized in business startup law in Silicon Valley for the past quarter century."