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How is my business plan protected.

Petros Anguridis's Profile

Hello to everyone, I'm just interesting if I will send to potential private investor my idea and business plan, then he will not go thru with me but him self and he will use my know-how? Thanks

Answers

Topic Expert
Simon Westbrook
Title: CFO
Company: Aargo Inc.
( CFO, Aargo Inc.) |

If you are sending to a private investor you know then you may be able to have him sign a non disclosure agreement, however many investors wont sign in order to protect themselves, since they see so many plans they don't remember which plan relates to who.

On a related point, if your plan could be adopted so easily by anyone reading it, there is insufficient barrier to competition and investors probably wont be interested anyway!

Topic Expert
Chester Hurtado
Title: CFO
Company: Tradeworks
(CFO, Tradeworks) |

Petros, I agree with Simon regarding the NDA, no VCs will sign one. However, you should have an NDA drafted because it is good to be able to show your idea to many different people in order to get feedback. Engineers, marketing people, experts in the market you are trying to penetrate, finance people, and possible competitors, should all sign NDAs. You'll need feedback and still feel some degree of security that you are not giving your ideas away.

Topic Expert
Jaime Campbell
Title: Chief Financial Officer
Company: Tier One Services, LLC
(Chief Financial Officer, Tier One Services, LLC) |

I agree with Simon, as do many others in the field. If your "secret sauce" can be duplicated that easily, it's not worth much and an investor wouldn't be interested.

Plus, bear in mind that even an NDA isn't worth anything unless you have the funds set aside for legal prosecution should it come to that.

If you believe that "locks exist to keep honest people honest," then there is your value and you can ahead and prepare an NDA.

Topic Expert
Michael Bateman
Title: Principal
Company: The Bateman Company
(Principal, The Bateman Company) |

Best to assume that the confidentiality of your business plan rests solely on the integrity of the person or persons you're dealing with. Sophisticated investors, as Simon stated above, most likely won't sign an NDA and many unsophisticated investors, if smart, won't sign one either. In our litigious society, who needs the exposure to and the hassle of a frivolous lawsuit. Having said that, most NDAs are all but worthless. Most don't have concrete penalties and good luck getting an investor to sign an NDA with onerous ones. Beyond that proving that someone stole your idea(s) is extremely difficult, costly and unlikely.

As an aside, should you approach a VC, assume the same. As Chester said, they won't sign an NDA and once I had a VC Partner attempt to hand me a competitor's business plan.

So in the end, do your best to assess the integrity of the people with whom you share your plan.

Ken Stumder
Title: Finance Director / Controller
Company: Ken Stumder, CPA
(Finance Director / Controller, Ken Stumder, CPA) |

Have you patented the underlying intellectual property?

Petros Anguridis
Title: builder
Company: rebuild4u
(builder, rebuild4u) |

Thank you very much guys for your time to answer me. It's truth - business partners ( IDEA & MONEY ) should trust each - other from beginning, otherwise is not worth it to be worry about that. Also every business plan has growing plan/idea which is use in practice during business and potential daily change depend on costumers reaction on selling products and service.
Anyway, when my business plan will complete I will first ask some people from business management what they think...

Petros Anguridis
Title: builder
Company: rebuild4u
(builder, rebuild4u) |

No, I didn't ...

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