Confidentiality
Investor confidentiality agreement
A confidentiality agreement written for the moment a company opens its books: metrics, contracts, cap table, code, customer names. It is usually one-way, because the company is doing the disclosing, and it is usually narrower than a general NDA — it names the transaction being considered and limits use to evaluating that transaction and nothing else. Many investors decline to sign one at a first meeting, which is why the paper tends to appear at the diligence stage rather than the pitch.
- In the catalogue
- Confidentiality
- Where it can live
- Any of the 184 governing laws
Who uses one
- Founders opening a data room to somebody who has asked for one.
- Companies being looked at by a buyer, a lender or a strategic partner.
- Anyone circulating unpublished financial or customer detail outside the business.
What you are deciding
- What transaction the information is being shared to evaluate
- What is in scope: the data room, the conversations, the fact of the talks themselves
- Whether the existence of the discussions is itself confidential
- Who on the receiving side may see it — advisors, analysts, other funds
- Whether the receiving side may look at competing businesses
- How long the promise lasts, and what happens to the data room at the end
Blanks you leave stay blank and wait in the room. Nothing is filled in from a guess.
The sections a draft usually has
- 1The parties and the purpose
- 2What confidential information means
- 3Permitted use, limited to the transaction
- 4Who else may be told
- 5Confidentiality of the discussions themselves
- 6Exclusions
- 7Return or destruction at the end
- 8How long it runs
A general outline, not a required one. What turns up in a draft follows what you described. A contract is written in the order a contract is read.
What people call it
The names this kind of paper goes by. They are here because people search for them. They also filter the catalogue. They are not a wordlist the door matches. At the composer you describe the deal in your own words instead.
- investor nda
- fundraising nda
- due diligence nda
- nda for investors
- confidentiality agreement for fundraising
Questions people ask
- Do investors normally sign an NDA before a pitch?
- Commonly they do not at the first meeting, and many funds say so publicly. Papers of this kind more often appear once a process is under way and a data room is being opened.
- Can the paper keep the talks themselves secret?
- It often does. A clause of this kind says that the existence of the discussions, as well as their content, is confidential — useful where an announcement would land before anything is agreed.
- What is a residuals clause?
- A term saying the receiving side may still use what a person remembers without notes. It is common where the reader looks at many companies, and it is one of the more heavily negotiated lines in this kind of paper.
General answers about the document. Not advice about your situation. Not written about any one country.
Where it lives
A contract names the legal system it is governed by. That is a separate decision from which paper it is. You pick it at the door, from any of the 184 units in Governing law, including England and Wales, Delaware, California and New York.
You do not start from this page. Describe the deal in one sentence at the door. Read the draft back in plain language, in the order a contract is read.
Start it at the door →Related kinds