Startup/Investor NDA
Non-disclosure agreement tailored for startup founders sharing confidential information with prospective investors.
Startup / Investor Non-Disclosure Agreement
This Non-Disclosure Agreement (this "Agreement") is entered into as of effective_date (the "Effective Date") by and between:
startup_name, a company organized under the laws of the State of governing_state (the "Company"); and
investor_name (the "Investor").
The Company and the Investor are each referred to herein as a "Party" and collectively as the "Parties."
Recitals
WHEREAS, the Company is engaged in the development and commercialization of certain proprietary technology, products, and services;
WHEREAS, the Investor is considering a potential equity investment in the Company (the "Transaction");
WHEREAS, in connection with the Transaction, the Company may disclose to the Investor certain confidential and proprietary information regarding the Company's business, technology, finances, and operations; and
WHEREAS, the Company desires to protect the confidentiality of such information and the Investor is willing to receive such information subject to the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. Definitions
1.1 Confidential Information
"Confidential Information" means any and all non-public, proprietary, or confidential information disclosed by or on behalf of the Company to the Investor, whether disclosed orally, in writing, electronically, visually, or by inspection of tangible objects, including without limitation:
(a) Business plans, business models, go-to-market strategies, competitive analyses, growth projections, and strategic plans;
(b) Financial information, including financial statements (audited and unaudited), revenue figures, burn rate, runway calculations, budgets, forecasts, and projections;
(c) Capitalization information, including the Company's capitalization table ("cap table"), equity ownership structure, option pool details, convertible note terms, SAFE agreements, and any information relating to the Company's securities;
(d) Technical information, including inventions, trade secrets, algorithms, software (including source code and object code), specifications, architectures, designs, prototypes, databases, data sets, and know-how;
(e) Product information, including product roadmaps, development timelines, unreleased features, product-market fit data, user metrics, engagement data, and retention rates;
(f) Customer and market information, including customer lists, customer contracts, pipeline data, customer acquisition costs, lifetime value metrics, market research, and user demographics;
(g) Intellectual property information, including patent applications (pending and filed), patent strategies, trademark filings, and trade secret portfolios;
(h) Personnel information, including organizational structure, key employee identities, compensation data, employment agreements, vesting schedules, and hiring plans;
(i) Information regarding pending or potential litigation, regulatory matters, compliance issues, or governmental investigations;
(j) Information regarding the Company's relationships with suppliers, vendors, partners, licensors, and licensees; and
(k) Any other information designated as "Confidential," "Proprietary," or with a similar legend at the time of disclosure, or that a reasonable person would understand to be confidential given the nature of the information and the circumstances of disclosure.
1.2 Representatives
"Representatives" means the Investor's officers, directors, partners, members, managers, employees, agents, and advisors, including without limitation attorneys, accountants, financial advisors, and consultants, in each case who have a need to know the Confidential Information in connection with evaluating the Transaction and who are bound by obligations of confidentiality no less restrictive than those set forth in this Agreement.
1.3 Person
"Person" means any individual, corporation, partnership, limited liability company, joint venture, trust, estate, unincorporated organization, governmental authority, or other entity.
2. Non-Disclosure Obligations
2.1 Duty of Confidentiality
The Investor agrees to:
(a) Hold all Confidential Information in strict confidence and not disclose, publish, or otherwise reveal any Confidential Information to any Person except as expressly permitted in this Agreement;
(b) Use the Confidential Information solely for the purpose of evaluating the Transaction and not for any other purpose whatsoever, including without limitation for the Investor's own commercial benefit, for the benefit of any portfolio company, or for the benefit of any third party;
(c) Restrict disclosure of the Confidential Information to its Representatives who have a need to know such information for the purpose of evaluating the Transaction, provided that the Investor shall be responsible for any breach of this Agreement by its Representatives;
(d) Protect the Confidential Information using the same degree of care that the Investor uses to protect its own confidential information of a similar nature, but in no event less than reasonable care;
(e) Not copy, reproduce, summarize, or distribute the Confidential Information except as reasonably necessary for the purpose of evaluating the Transaction; and
(f) Not disclose to any Person the fact that the Confidential Information has been made available to the Investor, that discussions or negotiations are taking place concerning the Transaction, or any of the terms, conditions, or other facts with respect to the Transaction, including the status thereof or the identity of the Parties (collectively, "Transaction Information").
2.2 Disclosure to Portfolio Companies
For the avoidance of doubt, the Investor shall not disclose any Confidential Information to any portfolio company, investee company, or other entity in which the Investor has an equity or economic interest, unless such entity has been specifically authorized in writing by the Company to receive such information and has executed a separate non-disclosure agreement with the Company.
2.3 No Trading on Information
The Investor acknowledges that the Confidential Information may include material non-public information within the meaning of applicable securities laws. The Investor agrees not to use any Confidential Information in connection with the purchase or sale of any securities, whether of the Company or any other Person, in violation of applicable securities laws.
3. Exclusions from Confidential Information
The obligations of this Agreement shall not apply to information that the Investor can demonstrate by clear and convincing evidence:
(a) Was publicly known and generally available in the public domain prior to the time of disclosure by the Company;
(b) Becomes publicly known and generally available after disclosure by the Company through no wrongful action or inaction of the Investor or its Representatives;
(c) Was already in the possession of the Investor, without obligation of confidentiality, at the time of disclosure by the Company, as shown by the Investor's contemporaneous files and records predating such disclosure;
(d) Is obtained by the Investor from a third party without restriction on disclosure and without breach of any obligation of confidentiality to the Company; or
(e) Is independently developed by the Investor without use of or reference to any Confidential Information, as demonstrated by documented evidence.
A specific disclosure shall not be deemed to fall within the foregoing exclusions merely because it is embraced by more general information that is publicly available. A combination of features shall not be deemed within such exclusions merely because individual features are publicly available, unless the combination itself and its principle of operation are publicly available.
4. Permitted Disclosures
4.1 Disclosure to Advisors and Attorneys
The Investor may disclose Confidential Information to its legal counsel, accountants, tax advisors, and other professional advisors retained by the Investor in connection with the evaluation of the Transaction, provided that such advisors are bound by professional obligations of confidentiality or have executed confidentiality agreements no less restrictive than this Agreement.
4.2 Legally Required Disclosures
If the Investor or any of its Representatives becomes legally compelled by applicable law, regulation, or legal process (including a subpoena, civil investigative demand, or similar process) to disclose any Confidential Information or Transaction Information, the Investor shall, to the extent legally permitted:
(a) Provide the Company with prompt written notice (and in any event within forty-eight (48) hours) so that the Company may seek a protective order or other appropriate remedy;
(b) Cooperate with and assist the Company in seeking such protective order at the Company's expense; and
(c) Disclose only that portion of the Confidential Information which is legally required to be disclosed.
5. Return and Destruction of Confidential Information
Upon the written request of the Company, or upon the Investor's decision not to proceed with the Transaction, the Investor shall promptly (and in any event within ten (10) business days):
(a) Return to the Company all tangible materials containing or embodying Confidential Information, including all documents, records, notes, analyses, compilations, studies, memoranda, and copies thereof, whether in paper or electronic form; or
(b) Destroy all such materials and all copies, extracts, and summaries thereof, and provide the Company with a written certification signed by an authorized representative of the Investor confirming that all such materials have been destroyed.
Notwithstanding the foregoing, the Investor may retain copies of Confidential Information: (i) to the extent required by applicable law, regulation, or bona fide internal compliance policies; or (ii) in the files of the Investor's legal counsel solely for the purpose of monitoring compliance with this Agreement. Any retained Confidential Information shall remain subject to all terms of this Agreement.
6. Non-Solicitation of Employees
During the term of this Agreement and for a period of twelve (12) months following the termination or expiration of this Agreement, the Investor shall not, directly or indirectly:
(a) Solicit, recruit, or attempt to solicit or recruit any employee, officer, director, consultant, or independent contractor of the Company to leave the Company's employ or engagement;
(b) Hire or engage any such individual, or assist any third party (including any portfolio company) in hiring or engaging any such individual; or
(c) Encourage or induce any such individual to breach any agreement with the Company.
The foregoing restriction shall not apply to: (i) general solicitations of employment not specifically directed at Company personnel (such as public job postings or advertisements); or (ii) individuals who contact the Investor on their own initiative without any direct or indirect solicitation by the Investor.
7. Non-Circumvention
The Investor agrees not to use any Confidential Information to circumvent, avoid, or bypass the Company, directly or indirectly, for the purpose of entering into any business transaction, relationship, or arrangement with any customer, supplier, partner, or other business contact of the Company that was identified through the Confidential Information, without the prior written consent of the Company.
8. No Obligation to Proceed with Investment
Nothing in this Agreement shall be construed as:
(a) An obligation by either Party to proceed with the Transaction or any other business relationship;
(b) An obligation by the Company to disclose any particular Confidential Information to the Investor;
(c) A commitment by the Investor to make any investment in the Company;
(d) A grant of any rights or license under any patent, copyright, trademark, or other intellectual property right of the Company; or
(e) The creation of any partnership, joint venture, agency, or fiduciary relationship between the Parties.
Either Party may, in its sole discretion, terminate discussions and negotiations at any time without liability to the other Party.
9. Ownership and No License
All Confidential Information shall remain the exclusive property of the Company. Nothing in this Agreement shall be construed as granting any rights, by license or otherwise, in or to any Confidential Information, or under any patent, copyright, trademark, or other intellectual property right of the Company. The Investor acknowledges that the Company retains all right, title, and interest in and to its Confidential Information.
10. No Warranty
ALL CONFIDENTIAL INFORMATION IS PROVIDED "AS IS." THE COMPANY MAKES NO WARRANTIES, EXPRESS, IMPLIED, OR OTHERWISE, REGARDING THE ACCURACY, COMPLETENESS, RELIABILITY, OR PERFORMANCE OF ANY CONFIDENTIAL INFORMATION, AND EXPRESSLY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT. THE COMPANY SHALL NOT BE LIABLE FOR ANY DAMAGES ARISING FROM THE INVESTOR'S USE OF OR RELIANCE ON THE CONFIDENTIAL INFORMATION. THE INVESTOR ACKNOWLEDGES THAT ANY INVESTMENT DECISION SHALL BE BASED SOLELY ON THE INVESTOR'S OWN DUE DILIGENCE AND INVESTIGATION.
11. Remedies
The Investor acknowledges that the Confidential Information is unique and valuable, and that any unauthorized disclosure or use of the Confidential Information in breach of this Agreement would cause irreparable harm to the Company for which monetary damages alone would be an inadequate remedy. Accordingly, the Investor agrees that the Company shall be entitled to seek equitable relief, including injunction and specific performance, in addition to all other remedies available at law or in equity, without the necessity of proving actual damages or posting any bond or other security.
In the event of a breach of this Agreement, the Company shall be entitled to recover its reasonable attorneys' fees, costs, and expenses incurred in enforcing this Agreement from the Investor.
12. Term and Survival
This Agreement shall remain in effect for a period of two (2) years from the Effective Date (the "Term"), unless earlier terminated by either Party upon thirty (30) days written notice to the other Party.
The obligations of confidentiality and non-disclosure set forth in this Agreement shall survive the termination or expiration of this Agreement for a period of three (3) additional years following such termination or expiration, provided that for any Confidential Information constituting a trade secret under applicable law, the obligations of confidentiality shall continue for so long as such information remains a trade secret.
The non-solicitation obligations set forth in Section 6 shall survive the termination or expiration of this Agreement for the period specified therein.
13. Governing Law and Jurisdiction
This Agreement shall be governed by and construed in accordance with the laws of the State of governing_state, without regard to its conflict of law principles. Each Party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts located in governing_state for the purpose of any suit, action, or other proceeding arising out of or relating to this Agreement.
14. General Provisions
14.1 Entire Agreement
This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior or contemporaneous oral or written agreements, representations, and understandings relating to the protection of the Confidential Information.
14.2 Amendments
This Agreement may not be amended or modified except by a written instrument signed by both Parties.
14.3 Assignment
The Investor may not assign this Agreement or any of its rights or obligations hereunder without the prior written consent of the Company. The Company may assign this Agreement to any successor in connection with a merger, acquisition, or sale of all or substantially all of its assets.
14.4 Severability
If any provision of this Agreement is held to be invalid, illegal, or unenforceable, the remaining provisions shall continue in full force and effect, and the invalid or unenforceable provision shall be modified to the minimum extent necessary to make it valid and enforceable while preserving its original intent.
14.5 Waiver
No failure or delay by the Company in exercising any right, power, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power, or privilege preclude any other or further exercise thereof.
14.6 Counterparts
This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Electronic signatures shall be deemed original signatures for all purposes.
14.7 Notices
All notices under this Agreement shall be in writing and shall be deemed duly given when delivered personally, sent by confirmed email, or sent by nationally recognized overnight courier to the addresses set forth below (or to such other address as a Party may designate by written notice).
14.8 Relationship of the Parties
Nothing in this Agreement shall be deemed to create a partnership, joint venture, agency, fiduciary, or employment relationship between the Parties. Neither Party shall have the authority to bind the other Party in any manner.
IN WITNESS WHEREOF, the Parties have executed this Non-Disclosure Agreement as of the Effective Date.
Company
startup_name
[Electronic signature will be collected via zsign]
[Date will be recorded automatically]
Investor
investor_name
[Electronic signature will be collected via zsign]
[Date will be recorded automatically]
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