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Keep your mitts off my idea.

Rick Segal has written an obvious post around a very easy to grok concept: VC's shouldn't steal entrepreneurs ideas.  Seems intuitive, right?  Let's see… VC steals entrepreneurs idea, word gets out, deal flow dries up. No more investments, no more investment fund….

Sometimes greed trumps common-sense.  Without naming names, there's at least one firm that I would never do business with, having seen exactly that behaviour. My advice? Do your homework.  Don't show all your cards on the first meeting.  Wait until the signs of a real engagement are there, before revealing too much information. 

{ 2 comments… add one }

  • PaulSweeney March 27, 2007, 6:25 am

    Wow. For real? Very difficult to prove. Most (i.e. all) VC's don't sign NDA's for this very reason. If they have an "investment path" and are looking at a particular area of future value (say, security and Open-ID), they will speak to a lot of companies in that space before plumping for one or even two in the same space. The guys in Bessemer do a great job of explaining this approach on their own blogsite. Even on the edge of Europe, we will eventually get to hear about this particular example, so if a VC did this for real, it will hurt.

  • Sutha Kamal March 28, 2007, 2:41 pm

    Most VC's don't do this … and to be clear: FUNDING a competitive startup is fair game… saying "hey, that's a good idea, let's CREATE a startup to do *just that*" isn't cool… and yes, I can think of at least one VC that's done precisely this.

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