What to Consider When Preparing NDAs with Investors

⏱️ Reading time: 4 min · 📁 Category: Entrepreneurship & Technology

Investor discussions are a stage when startups share highly sensitive information. To protect trade secrets such as business models, financial data, algorithms and customer lists, a non-disclosure agreement (NDA) plays a critical role. However, not every NDA protects the entrepreneur’s interests: its scope, duration and balance of obligations must be defined carefully.

1️⃣ Correct Identification of Parties

The NDA must clearly identify its parties. It should specify whether the startup’s company or its founder is entering into the agreement.

Identification of the parties: “Startup XYZ Teknoloji A.Ş.” or “Ahmet Yılmaz (founder)”
If the investor is a fund, give its full legal name, for example “X Girişim Sermayesi Yatırım Fonu A.Ş.”
Group companies or advisers may also be included in the definition of the receiving party.

2️⃣ Scope of Confidential Information

The confidentiality clause should cover not only documents marked “confidential”, but also information disclosed during discussions.

Include information shared in written, oral, visual and electronic form.
Cover documents even if they are not marked “confidential”.
General information, public data and information that the recipient knows beforehand may be excluded
Clarify the scope with examples such as trade secrets, strategy, software code and customer lists.

3️⃣ Duration, obligations and liability

Although the investment process usually lasts several months, confidentiality obligations should extend beyond it. A common term is 2 to 5 years.

Confidentiality term: “The obligation remains in force for 3 years even after the collaboration ends.”
In the event of a breach, the right to financial compensation and precautionary measures must be regulated.
State clearly that information may be used only for the agreed purpose.
Specify an exception for disclosures required by a court or regulator.

4️⃣ Mutual or Unilateral?

Startups seeking investor funding often sign unilateral NDAs. Where the investor also shares information during due diligence, the article recommends a mutual agreement.

Unilateral NDA: Only the startup’s information is protected.
Mutual NDA: Both parties’ information is protected equally.
The startup should submit its own draft rather than depend entirely on the investor’s legal department.

5️⃣ Jurisdiction and governing law

If the investor is based abroad, the governing-law and jurisdiction clauses are strategically important.

For Turkey-based startups, the article recommends including: “Turkish law applies; the Istanbul (Central) courts have jurisdiction.”
ICC arbitration or the Istanbul Arbitration Centre (ISTAC) may be considered as alternatives for international investors.
The obligation to not disclose confidential information in case of dispute must continue

Conclusion: NDAs with investors are not a formality: they underpin future protection of intellectual property and reputation. Before discussions begin, startups should draft terms that protect their interests and document the limits of information sharing. B10’s Investor NDA Template set provides entrepreneurs with bilingual English–Turkish examples prepared for KVKK compliance.

Explore the Investor NDA Template set