What is an NDA?
A Non-Disclosure Agreement (NDA) — also called a confidentiality agreement — is a legal contract that prevents one or both parties from sharing confidential information with third parties. For startup founders, NDAs are essential tools for protecting your ideas, technology, and business strategies.
Types of NDAs
Unilateral (One-Way) NDA
Only one party shares confidential information. Common when you're sharing your idea with a potential investor, contractor, or employee.
Mutual (Bilateral) NDA
Both parties share confidential information. Common in partnership discussions, joint ventures, or when two companies are exploring a merger.
When Should You Use an NDA?
- Before pitching to investors (though many VCs won't sign them)
- When hiring contractors who will work on proprietary technology
- Before partnership discussions with other companies
- When sharing trade secrets with vendors or suppliers
- During M&A due diligence
Key Elements of a Strong NDA
Definition of Confidential Information
Be specific about what's covered. "All information shared" is too broad. Define categories: source code, financial data, customer lists, business strategies, etc.
Exclusions from Confidentiality
Standard exclusions include information that is already public, independently developed by the receiving party, or required to be disclosed by law.
Term
How long does the confidentiality obligation last? Typical terms range from 1-5 years. For truly sensitive trade secrets, consider an indefinite term.
Remedies for Breach
Include a clause allowing injunctive relief — this lets you seek a court order to stop disclosure immediately, without waiting for a full trial.
Common NDA Mistakes
Using a generic template without customization. NDAs need to be tailored to your specific situation and jurisdiction.
Making it too broad. Courts may refuse to enforce overly broad NDAs. Be specific and reasonable.
Forgetting to include return/destruction of information. Specify that confidential materials must be returned or destroyed upon request.
Generate Your NDA Instantly
DraftDesk generates jurisdiction-aware NDAs in under 30 seconds. Just enter the parties, purpose, and duration — our AI handles the rest.