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Programming IT Technology

Writing Your Own NDA? 18

Posted by Cliff from the entrepreneurial-tactics-101 dept.
Trak writes "I am not a lawyer, nor can I afford one. I have a cool idea that I think could make some money, and I'd like to pitch this idea to a couple CEO/entrepreneur buddies of mine for a joint venture (they provide the money, I already have the technology). Yes, they are friends, but they are also businessmen and I wouldn't put it past them to take my idea and run with it. How can I protect myself and my idea, such as drafting an NDA and having them sign it before hearing my idea? What would I need to include in such a document?" I'm sure many of us have been in this position before and didn't know what to do. For those who have written one, if you would please share some information and insight on what you did and why?
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Writing Your Own NDA?

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  • Oddly enough, the topic of your post matches what you wrote quite well. You're the greedy bastard, not the one who submitted the question.

    What on earth did you do to deserve free use of his idea? Why should he sacrifice something he came up with instead of trying to profit off of it? What you GPL-loving socialists always seem to forget that without an incentive to create, no creation will take place.

    Stop trying to make others feel guilty for looking out for themselves.
  • You're not helping anyone by demanding he just give up whatever his idea is. What you don't seem to realize is that without an incentive, he (like most people) probably won't bother coming up with new innovations for you to just take from him.

    What the GPL seems to ignore is that money is a great motivation for individuals. In an idealistic world where everyone was motivated to do great things for the good of the community, it'd be just fine. But the fact remains that most of society is motivated by greed and selfishness, instead of being good to others just for the sake of being good.

    GPL toters would do good to realize that greed is a powerful force, and that not everyone shares their idealistic goals. Perhaps this world would be a better place if they did; but that's not how things are, and that's what most slashdotters need to realize.
  • Your in a Fantasy World if you think you can do this yourself and still protect yourself.

    I detest the need for lawyers for many things, but in this case you do not have a significant choice. If you do not have a correct and completely valid NDA it isn't worth the peice of paper it is printed on.

    That only leaves trust.

    I was screwed out of a dream job several years ago by a close friend. It happens. And when it comes to business many people, most businessmen, believe anything is fair game. It's just Business.

  • If you have an economic development department or small business support organisation for your area they might be able to help. At my last job we were asked to sign an NDA by a potential partner. I took it to my boss who was happy to sign it as he'd helped to write it! He'd done some consultancy for the Welsh Development Agency to develop administrative support resources for small firms in the technology sector in Wales and a model NDA was one of the things he'd worked on.
  • You have to be careful when you are trying to get people to sign forms before you will talk to them.

    Remember, the purpose of your conversation is to ultimately get them to give you some of their money. This puts the "money man" into the drivers seat in a lot of ways.

    I know that if someone came to me and said, "I have a great idea and I will discuss it with you but you have to sign this twenty-page agreement first," I would be highly inclined to tell him to go find someone else as I don't want to bind myself to who-knows-what just to hear a guy ramble on about his new idea for growing spaghetti noodles in little cans.

    An agreement is fine but you have to remember to take the other guy's interest into account too when you're drafting it and always remember, it is YOU who are approaching HIM and asking HIM for HIS money, not the other way around.
  • Even cheaper, i went to library, xeroxed an attractive NDA, typed it in, and printed it out. As a bonus, my signers and i found it to be understandable.

    I agree with you. Unless you have a situation that is unique in some way, and not simply "don't steal my idea", why is everyone suggesting spending $100s-$1000s on a lawyer's? You'll have plenty of other opportunities to bleed cash in the coming months if you pursue your idea. Remember that unless you're made of money and have done this before perfection is not a practical goal. If you do use a lawyer, keep him on a short leash. For each job let him give you a price estimate -- it's very dangerous to assume that he has your interests at heart. He's much more likely to be interesting in generating billing fees. If possible, get the price estimates in writing or at least email.

  • Slashdotters do realize this. What they also realize is that if they don't speak up, the world will never change. The world probably won't change when we do speak up, but since speaking up doesn't hurt, we can always try.
    That said, idealism is not the only reason to publish free software. Ego is another. For me, ego is a stronger force then greed. People do stuff in order to make themselves feel better. I would like to have my name in a piece of software that people use, because this is good for my selfesteem. It shows me that my ideas and programming skills mean something.
    A nice analogy:
    I play in a band, but not because I want to get famous and want to make a lot of money, but because of the fact that people can have a good time dancing to my music. This gives me the rush.
    I think a lot of GPL developers just like the feeling that a lot of people use their software, without having to resort to marketing techniques.
  • An agreement is fine but you have to remember to take the other guy's interest into account too when you're drafting it and always remember, it is YOU who are approaching HIM and asking HIM for HIS money, not the other way around.

    Ahh, but on the other hand, he is offering the VC a (hopefully) good idea and potential revenue generation in return for some of the VC's money. The VC doesn't make money without investing money, that's the business he's in, and without good ideas, he has nothing to invest in.

    What your saying is practically like saying to a job hunter that "YOUR approaching an employer asking HIM to pay YOUR bills with HIS money, so take his view in consideration", when after getting some self esteem, you should approach it as "YOUR offering to solve HIS staffing deficiency with YOUR time and skills".

    Just my two cents.. Mike
  • He's right. A few hundred bucks in exchange for a bullet-proof NDA should hold its value. The truth of this statement becomes apparent when you consider that this probably won't be your first good idea. You will always have your NDA to protect you.

    Consider it as an investment, not a cost.
  • It's not a Nolo Press book, but "The Small Business Legal Kit" by J.W. Dicks, Esq. has a template "Confidentiality and Trade Secret Agreement" in it. I've used templates from this book a few times and I haven't had any problems, but I guess the only time problems would really come to the forefront would be when the contract needs to be enforced and that has yet to happen for me. My personal opinion is that these templates are written by a professional lawyer and if I were to go hire a professional lawyer to write me my own custom contracts I'd really have no way of knowing if his contract is better than the template, so I'll just go with the one that is cheaper and has been subjected to wide peer review (I guess using open source software has put me in the mindset that peer review can lead to excellent quality). Anyway, you should decide for yourself if legal templates are right for you and not take what I say as a guarantee of any sort.
  • My first suggestion is to get a lawyer. Since you've already said you cannot, my second suggestion is to contact a local paralegal firm. Around where I live, there is a place called "We the People" that offers legal services for cheap, but they aren't laywers.

    My third suggestion is to find a NDA from someone else (who did consult a lawyer).

    Lastly, if you can't do that, remember this rule. You are not a lawyer. Contracts written by non-lawyers can't reasonable be expected to be as comprehensive as those written by a professional. If you have to enforce the contract and you get a lenient judge (that's a big if), she might give you some credit for not being a lawyer. That being said, write your NDA in plain english. Don't try and sound like a lawyer. Don't use big words. Don't make it long. Make is short, simple, and crystal clear. Give it to a fifth grader and make sure they can understand it. If the intent is clear, you may be able to have it stand in court.

    Dave
  • ...is like doing your own brain surgery.

    The money you invest in a lawyer will pay for itself many times over if you actually have to defend that NDA in court.
  • If you can't afford a lawyer to write your NDA, how will you be able to afford a lawyer to defend your NDA?

    Every business has some risk associated with it. If you're so risk-averse that you never disclose it to anyone, it is very likely that nothing will ever come of your idea. Choose carefully, but ultimately you are going to have to trust who you choose, NDA or not.

  • I by no means am reccomending going without a lawyer. However there will come a time, even with all the protective measures a lawyer can place for you that you will clash with someone who has something similiar. In order to win this you will need all the documentation you can get, and helpful testimony that confirms your documentation for proof of concept dates.

    If you can get your friend under an NDA --- great. If not, you need to evaluate your trust in this friend.


    David Byrd
    CEO - 21st Century Tech., Inc.
    URL: http://www.nite-surfer.com

  • Find a lawyer (Score:3)

    by JabberWokky ( 19442 ) <slashdot.com@timewarp.org> on Tuesday May 29, 2001 @02:38AM (#191689) Homepage Journal
    If your idea is good, really good to the point where you think it can make some money, scrounge a few hundred bucks and have a decent lawyer write one up (a good lawyer will run a few grand). Consider it a test of your own belief in the idea: you can even borrow the money from friends and family on the premise that if you sell the pitch, you'll pay back 200% or something. If it's a good idea, and these are legit investors, they won't have a problem with paying off even several thousand dollars worth of prior commitments to wipe the slate clean for them.

    --
    Evan

  • Same problem, two comments (Score:3)

    by DirkK ( 123364 ) on Tuesday May 29, 2001 @05:03AM (#191690)
    I have the very same problem, and actually two comments on that: one is that I refrain from keeping my ideas under the hood because one desperatly needs some profound feedback on questions like: is the idea really new? did someone try it and failed? is it feasible? etc
    My opinion is that talking to developers and the like is fine because you get responses, comments, criticism and links which all is great.
    Until some point I thought that nobody (like a big company) would steal an idea because if they're smart they will hire you or buy into your business; it's easier for them that way.
    But a VC guy at an entrepreneur party gave me a hint I'd like to share: if your idea is not related to some special skills you (and only you) have, or some special technology you'd like to use, then the ordinairy VC will be tempted to talk you out of your own idea, and give your idea secretly to some not-so-innovative company that he consults, too.
    Since it was a venture capitalist himself saying that, I'd recommend to be cautious while talking to VC's.

    Still, I'd say that Napster before Napster was something that would not have been stolen from Shawn because at this time no one believed that a non-browser based solution would have such big impact on the community (considering that hotline was there before, for example).

  • NDA(s) (Score:3)

    by db_two ( 445268 ) on Tuesday May 29, 2001 @05:53AM (#191691) Homepage
    This a major problem that comes down to one thing --- TRUST!!! As a businessman that has been wrapped in the legal snares of a project... Your attorney will advise to to have an NDA with anyone you talk to, especially the one they write for you. But MANY people won't talk you under the stiff legal parameters within that NDA. Believe me we had an on-going dicussion with a major OEM that lasted for over six months to get an NDA in place. Our attornies worked with theirs, and it came time for the scheduled meeting at their site with their attorney approved NDA, and they would not sign. But we also worked with another OEM who signed after 4 months. Hopefully something will come from this.

    My advice --- run your idea by some of your friends. Do it in a meeting and ask that you can tape it. Also document your idea in multiple media types, and have a hardcopy paper version notarized, and then send it to yourself and leave it sealed.

    Media types:
    electronic like files, documents, emails, placed on a CD..
    a basic presentation on video.


    Also check to see if it is patentable through Delphion (www.delphion.com).

    Good luck and let us know how things go!!!


    David Byrd
    CEO - 21st Century Tech., Inc.
    URL: http://www.nite-surfer.com

  • Get one from Nolo. (Score:4)

    by DeathBunny ( 24311 ) on Tuesday May 29, 2001 @08:56AM (#191692)
    Try checking out Nolo Press (www.nolo.com). They have a bunch of "do-it-yourself" legal books. A quick search on their web site shows several different NDA agreements.

    The downside is you'll have to buy whatever books these agreements are in, the upside is these are supposedly written by actual lawyers.

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