Back to the Basics | Post #9

FIO Legal Solutions
2 days ago
2 min read

Author: Luiza Rey

Your startup’s NDAs are protecting the wrong things.

Every founder wants an NDA signed before the first meeting.

It feels safe — like locking the door before showing the blueprint.

But in practice, most NDAs protect the other side more than they protect you.

Confidentiality ≠ Ownership

An NDA only says: “𝘠𝘰𝘶 𝘤𝘢𝘯’𝘵 𝘥𝘪𝘴𝘤𝘭𝘰𝘴𝘦 𝘸𝘩𝘢𝘵 𝘐 𝘵𝘦𝘭𝘭 𝘺𝘰𝘶.”

It doesn’t say: “𝘐 𝘰𝘸𝘯 𝘵𝘩𝘦 𝘪𝘥𝘦𝘢.”

And it definitely doesn’t stop someone from building their own version later — as long as they didn’t use your confidential info to do it.

So if your “𝘣𝘪𝘨 𝘪𝘥𝘦𝘢” is just a concept — without code, prototype, or trade secret behind it — an NDA is a false sense of security.

Real example

A Portuguese startup pitching a retail AI tool made investors sign NDAs before every demo.

Three months later, one investor passed on the deal — and another portfolio company launched a very similar product.

When the founders tried to claim “idea theft,” their NDA was useless.

Why?

𝘛𝘩𝘦 𝘕𝘋𝘈 𝘤𝘰𝘷𝘦𝘳𝘦𝘥 𝘤𝘰𝘯𝘧𝘪𝘥𝘦𝘯𝘵𝘪𝘢𝘭 𝘪𝘯𝘧𝘰𝘳𝘮𝘢𝘵𝘪𝘰𝘯, 𝘯𝘰𝘵 𝘪𝘥𝘦𝘢𝘴 𝘥𝘪𝘴𝘤𝘶𝘴𝘴𝘦𝘥. And the pitch deck didn’t include any trade secrets — just a concept and public-facing product screenshots.

Result: no breach, no claim, and a lot of frustration.

When NDAs Actually Matter

✅ When sharing technical details (algorithms, source code, pricing models).

✅ When exchanging client lists, financials, or proprietary data.

✅ When hiring freelancers or agencies who’ll access internal systems.

𝘼𝙣𝙙 𝙬𝙝𝙚𝙣 𝙩𝙝𝙚𝙮 𝙙𝙤𝙣’𝙩?

🚫 Intro calls with investors or accelerators.

🚫 Early brainstorming meetings.

🚫 Demo days or public pitch decks.

Overusing NDAs makes you look defensive — and legally, it adds almost no value.

The Smarter Move