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I have been asked by several clients about NDAs — why they matter, when they make sense, and why some people ask for them far too early.
This is not legal advice. It is a practical view from someone who gets pitched constantly. Every day.
Here is my first rule: If your opening line is, “Before I begin, I need you to sign an NDA,” the answer is 99% no.
Why? Because most early pitches do not justify one.
Unless you are about to show me Coca-Cola’s formula, true source code, a proprietary manufacturing process, or some real secret sauce, I am probably not signing an NDA just to hear a pitch deck and a market thesis.
The problem is practical. NDA terms are often different. Scope is different. Definitions are different. Term lengths are different. Restrictions are different. If I signed an NDA every time someone wanted to pitch me, I would need a filing cabinet, a spreadsheet, and a compliance officer just to keep the papers straight.
Good businesspeople should know how to pitch without immediately reaching for legal friction.
Second point: NDAs usually have a multiple year term and expire for a reason.
Information gets stale. Strategies change. Pricing changes. Teams change. Markets move. A perpetual NDA for ordinary business discussions is usually not a sign of sophistication. It is a sign that nobody thought carefully enough about what actually needs protecting.
The longer the NDA, the harder it is to manage in real life. Unless we are planning to work together for decades, or unless the information is truly a long-life trade secret, indefinite confidentiality is often more theoretical than practical.
That does not mean NDAs are bad. They are useful when they are used at the right time, for the right information, and with reasonable terms.
Third point: No, you should not assume every deal has the same non-disclosure requirements.
Some businesspeople think an NDA is a form that is just signed, like a restaurant receipt. Bad idea. One of the phrases that drives me nuts is when someone says no need to review the terms of an NDA as this is a standard form that a lawyer has already approved.
NDAs are not one size fits all because the real risk in each deal is different. A software company sharing source code, an investor reviewing a pitch deck, a manufacturer disclosing pricing and supplier terms, and two parties discussing a joint venture are not protecting the same kind of information. From a business perspective, the NDA should match what is actually being exchanged, how sensitive it is, who will see it, how long it will remain valuable, and what misuse would cause real harm. A well-crafted NDA should therefore reflect the transaction itself: define confidential information in a commercially realistic way, include sensible exclusions, limit use to the specific evaluation or business purpose, address who may receive the information, and set obligations that are strict enough to protect value without becoming unreasonable. In some deals, issues like non-solicitation, residual knowledge, data security, export controls, intellectual property ownership, or return and destruction of materials may matter; in others, they may be unnecessary. The best NDA is not the “longest” one, but the one that is tailored to the business relationship, the leverage of the parties, and the actual risks on the table.
My practical view is simple:
Do not ask for an NDA just to make a pitch.
Do use one when genuinely sensitive information must be shared.
Keep the scope tight.
Keep the term reasonable.
And remember that a bloated NDA does not make you look more serious. It usually just makes you look less experienced.
In business, the best NDA is not the longest one. It is the one that protects what actually matters.
About the AuthorGary K. Sumihiro is the President and CEO of Sumihiro Investments, LLC, a company he founded in 2009 to provide US and international investment services. Mr. Sumihiro specializes in identifying and supporting companies with the potential to go global, leveraging his expertise in multiple industries. He advises and sits on the boards of several US and international companies and has negotiated deals ranging from Olympic sponsorships to technology transfers. Most recently, he joined the board of EDGE Partners which focuses on foreign direct investment. He is also a recognized leader in his field and was appointed by the Secretary of Commerce to the United States Investment Advisory Council, Steering Committee for SelectUSA, Board of Advisors for the Smart City Alliance, and Leadership Council of the National Small Business Association. He is a frequent speaker and judge for embassies, trade associations, and conferences. Mr. Sumihiro will be judging and speaking at the U.S. Commerce Department’s SelectUSA this May in Washington, DC.