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Ask HN: Standard NDA conditions during deeptech due diligence?

6 points throwaway423d | 1 comments | 16 Oct 24 21:27 UTC | HN request time: 0.204s | source

I have co-founded a deep tech startup in the biotechnology sector. After a meeting with some of their partners, a French fund has expressed interest in investing. They have appointed a domain expert and are asking us to sign a non-disclosure agreement (NDA). We're wondering about standard terms for such agreements. What are the standard penalty fees and conditions?

My co-founder is rightfully concerned that the NDA terms we've been sent are too lenient in case of information leaks. We work in a competitive drug development space, and any information leaks to a large pharmaceutical company could cause significant harm to our business. We are far from idea stage.

The expert appointed by the fund is currently an academic, but with some clear connections to the pharmaceutical industry.

1. t_hinman_esq ◴[21 Oct 24 13:16 UTC] No.41903845[source]▶
Hi! I am a startup attorney - I can't give specific legal advice here, of course, but it's not unusual to be required to sign an NDA before discussing confidential company IP. The NDA basically specifies that the information can only be used for the "business purpose."

You should make sure that it covers the information of both parties (i.e., it's mutual and not one-way), and that the term is long enough to protect your IP (3-5 years might be standard; some large companies want shorter terms to shorten their liability window).

Enforcement would be a suit for damages or, in certain cases, injunctive relief that would allow the disclosing party to bring a claim to a judge asking for an injunction that would force the receiving party to do/stop doing whatever it was that violated the NDA.

Hope that helps!