Sharing ideas with a potential investor

[yhelothar]

Any of you ATOTers have any legal background or know the proper protocol to set up a contract?

 

[olds]

Yes. Call a lawyer.

 

[yhelothar]

How about something that's a little easier on the wallet?

 

[olds]

This spot reserved for the "I got ripped off becuase of my contract" post.

 

[yhelothar]

Anyone else?

 

[kranky]

It's not clear what you want the contract to do.

 

[yhelothar]

Well I would suppose a contract in this kind of a situation would serve to prevent the investor for just taking my idea and profiting on it himself.
Secondly, this contract would specifically define how the profits would be divided.

 

[kranky]

You probably don't want to hear this, but trying to protect an investing idea with a contract is a long shot. If your partner wants to cheat you, there's nothing you can really do. All your partner would have to do is agree to your proposal about sharing profits, invest a little with you, then invest more money where you can't see it and you won't get your share of those profits.

If your partner is going to be honest, you won't need to worry. If your partner is going to cheat you, a contract isn't going to stop it.

If your partner is putting up the money, and you are contributing just the idea, you better get a lawyer to work out the contract. Don't cheap out. Because your partner with the money is surely going to protect HIS interest.

 

[yhelothar]

Alright, thanks.
It looks like I won't be needing a contract then.

 

[AgaBoogaBoo]

Unless you're in a field where you have a secret formula like a medicine, you probably can't get investors to sign any kind of NDA. An idea alone isn't worth anything. Even if you have that secret formula, the NDA for that and the release of that information comes after you've presented the rest of the business to them.

What kind of investors are you presenting to and how did you get them interested without already sharing the ideas?