Why my Exploratory calls are NDA-free

NDA Lessons Learned

Post was originally published in August 2021 and has been updated in May 2022 for relevancy

I didn't realize how strongly I felt about the topic of getting asked to sign an NDA before an exploratory,  complimentary call -- until I was giving advice to someone who was asked to sign an NDA before their first interview at a start-up. Spoiler alert: I don't recommend signing one; here's why.



Phase 1: Context

I started out by agreeing to sign every NDA sent my way, before getting on a complimentary strategy call to discuss approaches for solving each company's current business challenges. Because I mentor, advise and consult mostly for start-ups, I wanted to do what seemed like the "right thing" as the time, even if the ask came right after an introduction. After agreeing to sign an NDA, here's what that process actually looked like in reality -- and my lessons learned.

When founders are starting out, especially first-time founders, they don’t know what they don’t know. Understandably they also try to extend their runway as much as possible -- sometimes at the expense of legal (and other) services. They typically don't hire lawyers, or, best case scenario, they have a pro-bono lawyer that's volunteering a few hours of their time a quarter (or similar) to the company. As a result, it seems that the contracts that do get used are those found on the internet, for little or no money, without understanding what the contract actually says and how it does/doesn't apply to their start-up, and how applicable or limiting the disclosure actually is, and the repercussions for doing so.

Phase 2: NDA

You probably see where I'm going with this. I would receive this NDA and send it to my lawyer (to the tune of $100s of dollars for my peace of mind), who would then flag and explain clauses to me. I would then ask the founders to amend/remove certain clauses, and we'd get into a legalese negotiation stage. Sometimes the contracts would be 10+ pages in length, governed out of state, and would have required an additional lawyer licensed in that state to review the contract as well. This is all before we even talked about their business overall -- and it wasn't clear if my services would even be a fit at this time.

To make things more concrete, here are examples of some of the most egregious clauses I've asked to be removed/amended from 6 actual contracts -- clauses that I didn't even know were in the contract without my lawyer's help:

Sometimes I wonder what must have happened for the clauses to make it into the contract? 

As an aside, I've learned that a contract is more likely to be legally binding if both parties stand to benefit from it; it can't just restrict one party without offering anything in return.

Phase 3: Strategy Calls (Finally!)

As you've probably guessed by now, when the dust around all the legal paperwork settled, sometimes many weeks later, I’d get on a call to learn about what the start-up does and why they may need help, and... -- it wasn't the right fit. 

For early-stage start-ups, there were typically 1 of 3 reasons:

Phase 4: Pivot to NDA-free Strategy Calls

After almost a year of paying (many) $100s to protect myself and my business, I decided to pivot to NDA-free strategy calls only, for the following 4 reasons:

After I pivoted, I still receive some push-back from founders to NDA-free strategy calls; typically, their argument is "but my contract is standard". To which I truthfully reply:  I've been doing this for a while and I have yet to see the same contract twice; actually I've found that legal contracts are similar to data sets: each is unique, has gotchas, and you need an expert to help you navigate them. :)

Find what works for you, re-evaluate if it's not, find a lawyer that works for you  (ask your network for recommendations) -- and protect yourself. Good luck!

And if you'd like an NDA-free strategy call to see how you can improve your product, reach out. If we decide to work together, I'll ask to sign your NDA and send over my consulting agreement for your review. :)

PS The day this blog post went live, I was asked to sign an NDA before finding out more about a company I was talking to. I told them that I just posted an opinionated blog post about why I don't sign NDAs: (1) I've seen many that would restrict my consulting business, and (2) I'd need to hire a lawyer to review the conditions to make sure that's not the case before signing. They were surprised, but dropped the requirement. :)

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