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.
March 27th, 2007 at 10:25 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.
March 28th, 2007 at 6:41 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.