PAANDA: The Professional Academic Alternative to Non-Disclosure Agreements
matt.might.net
matt.might.net
Because, you know, the revenue projection you pulled out of thin air and put on your PPT before having even signed the first customer is an absolute trade secret.
"Please accept my apologies. Our corporate bylaws prohibit the use of NDA's."
Done. End of conversation. No need for a long and complicated explanation.
Now, I just pass. I use it as a filter to identify that the other person is an idiot.
The funny part is when people get out of country or outsourced to other countries developers where they think an NDA or contract has much meaning or weight or that they care.
The real contract is money for services paid, while that is happening then it should continue, when that ends both groups/people should go about their business unanchored. This is why so many services companies try to go into products because the customer services/money exchange is much easier and well understood with simple ownership, which is own it upon payment but not the maker, just the product. Money for service and not ownership over everything.
A client or investor deserves to own any idea they fund and there will be NDAs which are ok. But when it starts limiting competition for x years for work on a 3 month contract it starts to get silly.
Although I am not in a sofware business, but what would it take a lead software developer to open up his own shop? Nothing a few bucks and the clients of his/her ex company.
In practice, unless you are comically shafting them or making it readily apparent you aren't going to help them achieve whatever exit they're looking for, the additional effort required to strike out by themselves is easily outweighed by the benefits of staying put.
Also, if your business is more at risk from employees than competitors, I think you need to seriously reconsider either your treatment of your employees, your business model, or your market analysis.
You are always at more risk from employees because they have multiple ways to hose you. Labor disputes, billing issues, intellectual property ownership agreements, etc.
This is why we have things like NDAs, Confidentiality Agreements, Patent Assignments, Stock Agreements, etc.
You don't have to be treating your employees badly for one to cause you issues. Even a disagreement about how much to sell the company for can cause problems, and that's not even a malicious reason to disagree.
That reasoning smells fallacious to me. Just because there are more kinds of risks, doesn't necessarily mean you're at more risk.
Either the company has traction, and good luck to catch up, or it doesn't, and good luck to create a product that has traction.
Luck is also a factor
My standard quote about this is: "If 4 guys and a dog in the Ukraine can do this, what's the business?"