An NDA can go a long way in protecting your intellectual property, and it is important to have your potential partners, vendors and investors agree to execute one prior to doing business if you have something worth protecting. When I first started pitching Talus’ health care exchange concept, getting an NDA signed by the 800 lb. gorilla Wall Street companies or investment firm used to seem like such a big deal. We were told by other startups, and even our advisors, that the companies we were approaching simply would not sign one. And while it is true that some companies have policies that keep them from entering into this agreement, most do not and will agree to sign one after some negotiating. Following is what I’ve learned to get an NDA executed every time.
Build Story Before Mentioning NDA
“What’s in it for me?” is what everybody wants to know. Well, you need to get your audience involved in what you’re doing. Formulate a story that doesn’t go into your IP (intellectual property) until they’ve bought into what you can accomplish for them. Then, when they want to know the secret sauce, you say “I’d be happy to… we just need to get a mutual NDA in place.” So much easier.
Always Add “Mutual”
You have NDA’s and you have Mutual NDA’s. Difference? The company you are talking to is protected too – and it is good to extend to protection to them regardless. By using the word “mutual”, it takes the attention off of you and makes them feel warm because you’re thinking of them… right?!
Blame Your Legal Council
There’s nothing like making somebody else look like the bad guy, especially lawyers. Well, the lawyer gets paid the big bucks for being the bad guy, so tell your contact that your hands are tied unless you get an NDA in place. Look to the floor like an ashamed child and say “sorry, I don’t have a choice.”
Be Prepared to Walk Away
How loyal do you look to your audience if they sense you’d compromise your own IP? Well, if you ask for an NDA and get push-back, you need to be prepared to move on to the next target. It may well be a test. In addition, you shouldn’t be compromising your IP. That is your asset!
Establish Your Professionalism
How eager do you think a major potential partner, vendor or investor will be to do business with you if you’re weak on the very first negotiation? Yes, this is most likely your first negotiation for this potential relationship and doing the negotiation for an NDA is a great way to establish a positive image in their minds about how professional you are. Do it well and get it done!
I stress to you in holding firm and getting what you want. You’re a professional and you have something they need! No need to compromise.
If you frequently wear a suit, I HIGHLY recommend investing in custom made suits and shirts. I’m not talking about the suits off the rack at Foley’s or Men’s Warehouse where the salesman says they your suite will be ‘custom tailored’. I’m talking about going into a reputable little boutique and going through the process with a professional haberdasher to get every little part of your body measured so that what you get fits perfectly and, most importantly, comfortably.
