I want to interest the prospective financiers in my venture without giving out the whole plan till an agreement is signed. One way to protect your idea is through the use of confidentiality or non-disclosure agreements. Prior to discussing proprietary information about your company, you have those individuals or companies that you would like to hear your pitch sign one of these agreements. However, most venture capitalists will not sign confidentiality agreements. The majority of confidentiality agreements that are asked to sign are ineffectual.
Venture capitalists receive hundreds of plans, even thousands of plans, a year.
Entrepreneurs tend to present VCs with unique confidentiality agreements. It would be impossible for venture capitalists to remember and abide by all of these different stipulations. Venture capitalists need some flexibility when discussing investment and business strategy with multiple companies in similar or related markets. I'm sure if you ask a number of venture capitalists about this issue, you will get a number of reasons for this practice. I would recommend using good judgment when talking with venture capitalists.