Quora Answer: Should a Non-Disclosure Agreement be Part of a Shared Business Plan?

The following is my answer to a Quora question: “Should a non-disclosure agreement be part of a shared business plan, if it is part of a financing agreement?”

The non-disclosure agreement should be signed before you start giving out details of how you run your business to potential investors.  There is no point in giving it out at the same time – they already have your business plan. 

Investors have a legitimate right to understand how the business intends to create that return on investment, but they do not need to know everything.  The business plan you provide to the investors should have enough details for them to do a proper due diligence, and verify that what you have is viable, but not enough that they can say thank you, and do it on their own without you.  In such a case, an NDA is not going to be helpful because you probably do not have the resources to take legal action.