[marrington]

I'm a former lawyer and currently a VC. I really can't imagine a situation where I'd ask a company to sign an NDA in connection with a potential investment. If the information isn't confidential I'd just tell them. If it was it probably isn't mine to share (something we know from a portfolio company, for example).

So it's weird. It's also a red flag that the investor either doesn't really know what its doing, or that they're willing to share confidential information that they shouldn't, or that they are litigious and like to corner people via a NDA and apply leverage.

I'd walk away unless they are your only funding option. And if they are your only funding option you probably have issues with the startup or product that need to be addressed anyway.

[relaunched]

Listen to this advice. If you need the money, and it's your only source, you have to do what you have to do. This smells all kinds of wrong; and probably won't lead to money or money you'd want.

[neurotech1]

marrington is also the founder of TechCrunch, so he's likely heard about all the subsequent drama that usually follows.

Drama is something that startups need to avoid at all costs. Its an energy drain that isn't worth the money.

[kwiki]

Thank you all for your replies which I'll go on an study further. I'm honoured you all took the part of your busy schedule to suggest us what to do.

To clarify: They are not our only "investing option", but they are the first to introduce us to this market which we haven't considered before.

The "investor" is probably (we are not sure) going to ask to create a new-co, rather than investing money and getting shares of the company. They plan to access funds from other investors or grants.

To their excuse there actually was some information which understandably they wish to keep confidential, mainly names of peoples and charges and relationships. I don't want to give more clues about this as I wish to maintain that "hi-confidentiality" intact; which is why I also created this new account on HN

On one side, I think they want to ensure that we don't develop the project without them. I also think they fear there might be consequences (legal? political? of image? ) for them if we were to disclose their names, charges and some of the things they told us. But I'm not sure.

From a legal point of view I'm not sure if the NDA doesn't define who is the "disclosing" or "receiving" party, nor what were the contents that have been discussed, there might not be any basis to take legal action. Or is there?

[damonpace]

I'd walk away in any scenario. It smells of a trap or a bad investor.