The paranoid entrepreneur

A couple of friends asked me about non-disclosure agreements last week, the favorite document of a startup entrepreneur. It must be that time of summer when the ideas are flowing. Here's a quick summary of useful tidbits:

• Have one ready - either get one from your lawyer or, if you don't have one yet, tailor one to your needs (e.g., start with something like Nolo and go from there)
• Work out what you can say without an NDA - you may want to ask folks to sign the NDA after you've started a dialog to initiate a formalized relationship
  
• Do's and do-not's - potential partners/employees should sign them, do not ask VCs to sign them (they see too many deals that may overlap with your idea)
  
• Protect yourself in other ways - mark sensitive material as "confidential" (e.g., include disclaimer at bottom of your e-mails); this could be really handy if disputes occur later
  

A bit of paranoia in an entrepreneur is a good thing - the buzz and adrenalin beats any caffeine in getting you to pull those extra all-nighters to push things out even sooner.

But don't get too carried away - I've seen this one guy at a number of conferences who kept asking anyone who would listen about how he could raise money for his amazing idea that he can't reveal. I even overheard him ask the president of an angel group to sign an NDA. I wish him luck but, so far as I can tell, he hasn't gotten anywhere but he has turned more than a few people off...