You might be thinking of asking a VC to sign a non-disclosure agreement (NDA) before you tell the VC your brilliant business idea or present your innovative technology. However, it’s not advisable to ask a VC for a NDA, and may even risk stopping your potential VC deal in its tracks.

Venture capitalists may review hundreds or thousands of business plans in any given year. Even if you think your ideas are proprietary, they may be just similar enough to another entrepreneur’s that the VC takes on the added risk of legal action against it just by signing your NDA. Also, for the VC, accepting NDAs adds the administrative burden of having to keep track of which NDA covers what entrepreneur’s ideas.