NDA for investors, from pitch to due diligence

The outline above is the real agreement the generator builds for an investor. Its sections, in order, do the following.

• Definitions. Confidential Information is what the company shares for the Purpose, marked or reasonably understood as confidential, plus the fact and status of the talks. The Purpose is evaluating a possible investment. Representatives include the investor's general partners, investment committee members and bona fide prospective co-investors with a need to know. Limited partners are not Representatives.
• Exclusions. Public information, prior knowledge, independent development and lawful receipt from third parties are excluded.
• Obligations of the investor. Use only for the Purpose, no unauthorized disclosure, at least reasonable care, no reverse engineering, prompt notice of a leak, and an acknowledgment that US securities laws restrict trading on, or tipping others about, material non-public information.
• Permitted and compelled disclosures. Representatives who need to know, a subpoena and court order procedure that also covers securities exchange rules, and no notice requirement for routine regulatory examinations not aimed at the company.
• Return or destruction. Return or destroy on request, with confidentiality continuing for retained backups.
• No license and no warranty. Ownership stays with the company and information is provided as is.
• Investment activities. The investor may evaluate, invest in, advise and sit on the boards of other companies, including competitors, without breaching the NDA unless it uses or discloses your information. Knowledge is not imputed to partners or portfolio companies that never received it. Neither side has to invest or accept an investment until definitive agreements are signed.
• Residual knowledge. General ideas and know-how kept in unaided memory may be used, but not specific financial, customer, pricing or personal data, and not information you identified in writing as a trade secret.
• Optional covenants. A 12-month non-solicit of employees, plus standstill and no-contact clauses for strategic investors.
• Term, survival, remedies and governing law. Your chosen term and confidentiality period, trade secret protection as long as it qualifies, equitable relief, and the state law and courts you select.

The investment activities and residuals clauses are what make an NDA acceptable to many funds. Offering them up front often turns a refusal into a signature.

For a private startup, the securities clause is mostly a reminder. It matters much more when the investor or the company has publicly traded securities, because trading on material non-public information or passing it on can violate federal securities laws enforced by the SEC. Public company investors and hedge funds may also need to restrict trading internally while they hold your information.

A strategic investor that could later want control is a different risk. A standstill stops it, for a set period, from buying your securities, launching a tender offer, soliciting proxies or seeking board seats without an invitation from your board, with a fall-away if a third party agrees to buy you. A no-contact clause keeps it away from your employees, customers and lenders on deal topics. These terms are standard in acquisitions and are explained on the M&A NDA page. For startup-specific advice on what to protect, see startup NDA.

If the investor sends its own form, upload it to AI NDA review to check for a perpetual term, a residuals clause without limits, or missing compelled disclosure carve-outs.

1. Generate the investor NDA with the fund or company name, term and governing law.
2. Send it for e-signature to the investor's signatory, who signs in the browser without an account.
3. Track status per investor and nudge anyone who has not signed before the data room opens.
4. On the Company plan, the nda.signed webhook can unlock a data room folder automatically once the NDA is signed.