Confidentiality
"We're in super stealth mode. Patents are not yet filed. We're in discussions with major launch customers and partners. We need to expose ourselves to as few people as possible."
CEO Problem
The CEO needs tools that aid the in controlling dispersion of confidential information. It is widely known that few venture investors will sign NDAs, due to the large numbers of similar business plans they review. Yet the buyer and seller must exchange certain information to pre-qualify the fit and determine if it makes sense to invest time and money in pursuing the relationship.
Program Features
Venture assessment reports contain tools which describe the maturity of the company, while protecting technical know-how and detailed market strategies. The CEO can use these tools to their advantage when interviewing for investor partners. In fact, many investors are asking for assessment reports before meeting the company to aid them in the pre-qualification process.
Program Benefits
Assessment report tools help keep the key issues in perspective, enabling CEOs shift the focus from the confidential details of their strategy to the investor's value proposition on the value-added that comes with capital.
Recommendations
No deal is perfect and gaps are a fact of life. Success comes with the CEO's ability to understand the gaps and recruit the best-fit solutions that maximize shareholder value. CEOs who fail to ensure an adequate rise in valuation are prone for replacement due to the laws of shareholder leverage that new money brings.
By using tools that help the CEO manage dispersion of confidential information, they improve their negotiating position provided they reveal in step with the investor's contributions. CEOs need to listen and record (using tools) indications of exactly what solutions they can expect investors to bring that serves to raise the overall valuation of the business post-money.
VenLogic pre-qualifies all of its partners and will coordinate the signing of NDAs at the request of the company prior to a program, thus creating a more leveraged program. So, in actuality, every program enables confidentiality of client information, however naturally the dispersion risk goes up with the more parties that are exposed in a panel versus private program. (See Benefit: Leveraged Environment.)
Note
on NDAs:
Many investors will go so far as to reject an entrepreneur outright
at the hint of a request for an NDA. The request alone says they
don't "get it." Yet, there are many reasonable situations
in fast changing markets where confidentiality agreements make a lot
of sense and are considered "best-practices."
However, in the dance to pre-qualify investors and vice versa, the
company needs to learn what information matters and what doesn't.
Tools help this process.
Professionals know that their livelihood depends on referrals, so
does them no good to violate the confidence of their clients.
Therefore, it is rare that VenLogic finds a business opportunity
that truly justifies the signing of an Non-Disclosure Agreement
(NDA), especially since proof of breech is nearly impossible.
While professionals can be interviewed for conflicts of interest
(having other clients in a similar space), there will always be the
existence of innate execution factors that prohibit anyone from
implementing a strategy or product discussed in our programs. Even
in a panel review program, where many professionals gather to assist
one company, the only party that truly benefits from the information
exchanged about the company's business strategy is the company.
In conclusion, NDAs serve both tangible and intangible purposes.
Tangibly: to make it clear that confidentiality that comes with
professional best-practices is a part of the delivered service (not
just a favor). Intangibly: to build comfort, trust and rapport so
the real issues can be addressed and the experts can go to work.
