I am an entrepreneur who has built my own startups and plan to make more in future. But I am about to take on some freelance consultancy work for other startups and I need to be prepared for when I’m asked to sign an NDA.
My view is that there is a danger it will preclude me from working for other clients in the same sector or with similar ideas, or from setting up something similar myself in future.
Of course I treat everything I do in a freelance role confidentially and so some kind of confidentiality agreement makes sense. But NDA documents are very restrictive and have the chance to stop you ever thinking about a particular idea again.
What do other entrepreneur/freelancers do in these situations?
A lot of freelancers get defensive when it comes to a client asking them to sign an NDA. Instead, I've always approached it as an opportunity to help provide a solution. I reply with something like:
I've found signing an NDA adds real costs to my business. Increased liability, added legal fees, and more. So I don’t shy away from that… I run my freelance business like a real business and charge for these added costs.
I've found clients are usually receptive. And I have similar templates for all kinds of situations, including finding new clients.
thanks for the input.
I have made sure that the NDA don't restrict me on technology the last time I signed one. For example I build a web-scraping tool for a company that are using this tool to sell to multiple clients. The first draft of the NDA said things like "Can not build web-scraping tools" which restricted me on technology.
Instead I had something like "Can not compete by building a web-scraping tool that is used for XYZ" or something like that. Now it was that I can't compete straight on with their product which kind of make sense.
Not sure if this was helpful or not.
very useful, thank you.