Is it unwise for an entrepreneur to sign a non-disclosure agreement?

Non-disclosure agreements are very common. Know that a non-disclosure agreement goes both ways as well. A contract agreement should also protects you from the other party disclosing any trade secrets or know-hows that they may learn from working with you.

Most established entrepreneurs aren't fond of signing NDA's because they can be too open worded and may prevent the entrepreneur from developing ideas and businesses off the fringe of the idea/trade secrets covered within the NDA. I certainly wouldn't sign an NDA unless there was an extremely compelling reason to. I would also be inclined to make sure the NDA was applied equally to both parties involved, and was very specific as to scope.

+1 for what Chris said. I usually wait to sign NDAs until very late in the process because most deals fall through and NDAs can limit one's freedom to act on ideas you had BEFORE you even met Mr. So-and-So. For example, if I later tell a programmer to start working on an app idea from two years ago, then a particularly litigious company could claim that I had wrongfully disclosed some of their ideas. So when someone asks you to sign an NDA in the first or second conversation, politely decline and offer the reasoning above. Say that you'd like to get to know the person better before signing anything. Say you'll be happy to answer specific questions about your experience and expertise. Say that you don't mean to be a stick in the mud, but you've found that two potential partners can have a meaningful discussion about partnership without inking paper. Over the past several years I've learned several things: 1) the people fondest of NDAs are the people least likely to act on their ideas; 2) as often as not, the person asking you to sign one really just wants free consulting; and 3) experienced businesspeople know that ideas are worthless without execution. Thus, they're typically not worried about divulging a few of their secrets because they know that 99% of listeners will do nothing with the information. The last thing I'll say is this: the bigger the promises, the harder the fall. So perhaps find a way to collaborate on a few smaller tasks or projects before hopping into business bed together.

Hope this helps,
Austin

Lots of good input here already. I concur with most of it. Make sure the NDA offers mutual protection and provides for a remedy that is reasonable. I would also suggest adding 'non-circumvention' language.

Just my thoughts...
I have been involved in entrepreneurial endeavors for many years and HATE NDA's. While I understand the importance, most people want you to sign them because they think they have the next best thing! Truth is, I keep my secrets close and will not share them with anyone that I don't trust or only trust if they sign an NDA. NDA's are important in longer term contracts and when working deep in the daily operations of the organization of which whom you are working with, and NEED to protect both parties. That said, they are only as strong as your pockets are deep when it comes to legal standing and there should be a level of trust established prior to sharing information that may be detrimental if in the wrong hands.

I will sign NDA's if it is a requirement in doing business and feel the relationship requires one, however, if it does, I really search my gut as to if it is a relationship that I want to be in long term and if what I am signing is two sided and would we both feel fine moving forward without one.

I have purchased businesses on handshakes and feel you really need to trust your gut and work with people you can trust.

Again, just my thoughts.
-Branden

I personally am very hesitant to sign non-disclosure agreements especially with those in the same industry AND new to my circles. Just my opinion, but the thing about ideas is that they are essentially worthless without the execution. No matter how 'great' or 'innovative' one might think their idea may be, entrepreneurs are usually too busy working on their own 'great' or 'innovative' idea to replace it with another. If the other person is not willing to risk some sort trust level of information then maybe you are better off moving on. If you feel the upside outweighs the downside such as you already have an established relationship with this party/ have validated this lead/feel you want to explore more, make sure the NDA goes both ways.

✅ TL;DR (Too Long; Didn’t Read)
No, it’s not unwise — but it depends.
Signing an NDA early in a conversation can be risky if it’s:
Too broad
One-sided
Poorly written
A good NDA should be mutual, specific, and aligned with the stage of the conversation. In some cases, refusing to sign may halt progress — but that’s not always a bad thing. Trust, judgment, and clarity matter more than a standard template.

🧠 Full Answer
NDAs are a normal part of doing business — but timing, structure, and trust are everything.

Here’s how to think through it:
⚖️ 1. Assess the Stage of Conversation
First call or pitch deck? → Likely too early to sign anything
Diligence stage with serious intent? → Signing may make sense. You shouldn’t be legally bound to secrecy before even knowing whether a real opportunity exists.

🤝 2. Request a Mutual NDA
If you're open to signing:
Ask for a mutual NDA — one that protects both parties
Avoid NDAs that prohibit things like "working on similar ideas" or that are so broad they trap you for years
Always read carefully or have a lawyer skim it.

🧠 3. Know the Real Risk
Ideas are rarely the real asset — execution is.
You won’t lose much by hearing a high-level pitch. But signing a poorly worded NDA can cost you freedom to build your own ideas later, especially if you’re working in the same space.

🔄 4. Flip the Conversation if Needed
If someone insists on an NDA too early, try this:
“I understand your need to protect your IP, but I typically don’t sign NDAs at the exploratory stage. Happy to hear the high-level version and see if we’re aligned. If we go deeper, we can revisit the legal part.”

If they refuse — that tells you something, too.

🔍 What Was Missed or Confused in Previous Answers
❌ “People who use NDAs aren’t serious” – Overgeneralized. Some people use NDAs simply because that’s how they were advised.
❌ “Ideas are worthless” – Not always. Execution is key, but some early-stage IP or tech concepts do require discretion.
❌ “I hate NDAs” – Emotion ≠ legal guidance. Many responses shared opinions but didn’t clarify the legal or strategic risks of signing the wrong NDA.

✅ Correct point that NDAs only matter if you can afford to enforce them. A contract is only as strong as the party willing to defend it.

🧭 Final Word
NDAs are not inherently unwise — but blindly signing one is.
👉 If you're considering it:Ask for mutual terms
Read the scope carefully
Make sure it's tied to a specific opportunity, not every idea under the sun

✅ TL;DR (Too Long; Didn’t Read)
No, it’s not unwise — but it depends.
Signing an NDA early in a conversation can be risky if it’s:

Too broad

One-sided

Poorly written
A good NDA should be mutual, specific, and aligned with the stage of the conversation. In some cases, refusing to sign may halt progress — but that’s not always a bad thing. Trust, judgment, and clarity matter more than a standard template.

🧠 Full Answer
NDAs are a normal part of doing business — but timing, structure, and trust are everything.

Here’s how to think through it:

⚖️ 1. Assess the Stage of Conversation
First call or pitch deck? → Likely too early to sign anything

Diligence stage with serious intent? → Signing may make sense

You shouldn’t be legally bound to secrecy before even knowing whether a real opportunity exists.

🤝 2. Request a Mutual NDA
If you're open to signing:

Ask for a mutual NDA — one that protects both parties

Avoid NDAs that prohibit things like "working on similar ideas" or that are so broad they trap you for years

Always read carefully or have a lawyer skim it.

🧠 3. Know the Real Risk
Ideas are rarely the real asset — execution is.
You won’t lose much by hearing a high-level pitch. But signing a poorly worded NDA can cost you freedom to build your own ideas later, especially if you’re working in the same space.

🔄 4. Flip the Conversation if Needed
If someone insists on an NDA too early, try this:

“I understand your need to protect your IP, but I typically don’t sign NDAs at the exploratory stage. Happy to hear the high-level version and see if we’re aligned. If we go deeper, we can revisit the legal part.”

If they refuse — that tells you something, too.

🔍 What Was Missed or Confused in Previous Answers
❌ “People who use NDAs aren’t serious” – Overgeneralized. Some people use NDAs simply because that’s how they were advised.

❌ “Ideas are worthless” – Not always. Execution is key, but some early-stage IP or tech concepts do require discretion.

❌ “I hate NDAs” – Emotion ≠ legal guidance. Many responses shared opinions but didn’t clarify the legal or strategic risks of signing the wrong NDA.

✅ Correct point that NDAs only matter if you can afford to enforce them. A contract is only as strong as the party willing to defend it.

🧭 Final Word
NDAs are not inherently unwise — but blindly signing one is.
👉 If you're considering it:
Ask for mutual terms
Read the scope carefully
Make sure it's tied to a specific opportunity, not every idea under the sun

Would you like a free mutual NDA template you can suggest instead of accepting theirs? I’m happy to share a vetted one that keeps the conversation fair — and if you’d prefer to talk it through, we can schedule a quick call to walk through it together.