8 Things To Include In A Startup Confidentiality Agreement


What’s one important thing that you always include in a confidentiality agreement with vendors, business partners, and employees?



The following answers are provided by the Young Entrepreneur Council (YEC), an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, the YEC recently launched #StartupLab, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses via live video chats, an expert content library and email lessons.


1. Include a Non-Compete Clause

“A non-compete clause for a long period of time is really important to have in any contract because once you begin a relationship, there is a lot of sensitive information that is shared and shouldn’t be used against you if the relationship goes bad. The last thing you want is your competitor knowing everything about you. “


Derek Capo, Next Step China


2. Keep the Agreement and Relationship Confidential

“For my clients, I include language that prevents the other party from disclosing the contents, nature of the agreement and relationship between the parties without the prior written consent of my client. For example, you don’t necessarily want your competitors to know which manufacturer or suppliers you use or even which contractors (such as designers, consultants, etc.) you are working with. “


Rachel Rodgers, Rachel Rodgers Law Office



3. Have a Set Termination Date

“In the startup space, I often discourage my clients from asking for non-disclosure and confidentiality agreements as they can often be a bigger hindrance than help. When they are appropriate, it is important to have a set termination date and clear provisions regarding what the party’s rights and responsibilities are once the agreement has terminated. A gray area here is bad news all around.”


Peter Minton, Minton Law Group, P.C.



4. Carefully Look at PR Guidelines

“Pick over contracts with a fine-toothed comb with PR and advertising your relationship with another company. Recently, we found a clause in a contract a vendor was asking us to sign, saying they could use our logo and company name without our consent to promote their work with us! We love PR as much as the next guy, but using our logo and brand without permission is a recipe for disaster.”


Kim Kaupe, ‘ZinePak



5. Add a Region in the Non-Compete Agreement

“I modify the agreement based on the situation. If I have an employee working as a sales rep in Florida, my terms will be in the state of Florida. Your job is to make the agreement as reasonable as possible, explaining this is the only way you can protect your business. If you don’t specify location on your contract, it’s easy for the other party to say they have the right to do business anywhere.”


Yosef Martin, Merchandize Liquidators



6. Protect Your “Secret Sauce” Items

“There are several key pieces of information that should be included in NDAs, or non-disclosure agreements. The most important items include customer lists, financial and profit margin information, product breakdowns, bestselling segments and sales scripting and messaging.”


Ben Rubenstein, Yodle


7. Make NDAs Very Specific

“Always make sure NDAs are specific to the job at hand. Vague NDAs, signed carelessly with dozens of new prospects, will most certainly turn into a battle down the road. Anyone can sue anyone these days, so make sure to be specific about what you are protecting, and be picky about who you sign NDAs with.”


Ziver Birg, ZIVELO


8. Include Non-Solicitation

“Nothing is more important to me than an employee’s agreement to not solicit clients, vendors or other employees.”


Adam Cunningham, 87AM



Photo Credits

The YEC | stockimages | freedigitalphotos.net