I get several hundred requests for start-up investments every year. Often just an email with a few KPIs, sometimes a one-pager, but often also complete pitch decks.
From time to time, perhaps every 20th time on average, I get only a very vague description, or none at all, combined with the request to sign an NDA ("Non Disclosure Agreement") first.
When I was new to the investment business a few years ago, I complied with that request.
About ten times, that's how long it took me to figure out a simple correlation: founders who ask for NDAs have the worst start-ups. Every single startup I saw after signing their NDA disappointed me.
After receiving such an email again today, I asked myself, why is this the case? Why this negative correlation? And now, after many years in the start-up investment business, I think I have a plausible answer to it:
So in a nutshell: Please, please, dear founders, spare me, and also other business angels and VCs an NDA right at the first or second inquiry. Sure, feel free to give out information piece-by-piece. And of course, once a due diligence starts, an NDA is completely okay. But only then, please. Thank you!
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