Is it common for VCs in the life sciences to sign NDAs with companies?

Asked by

Community Member

Dec 18, 2023

Is it common for VCs in the life sciences to sign NDAs with companies?

I asked Decile Hub this question and got a slightly different answer on the follow up (i.e., on follow up, that it is permissible for life sciences companies). I am meeting with a company building a hardware product for measuring metabolites in blood, and they requested an NDA when sending us the materials.

I've heard that this is more common for companies in the life sciences space, especially if they have deals with major pharma, who often require such terms. I do not think they are disclosing deals with partners that might require NDAs.

What is the proper way to respond to a request like this?

2 See in Base

Answered by

Mike Suprovici

Dec 18, 2023

It's very difficult for VCs to sign NDAs because it's really challenging to honor them. This is due to the large number of deals they encounter, making it impractical to sign NDAs while keep the info 100% private in 1000s of conversations per year.

Have the founder google 'Why VCs donly't sign NDAs'. Ultimately the choice is yours.

Situations like this are about trust and you can reference the Mensarius Oath to help build that trust.

Answered by

Neal Strickberger

Dec 19, 2023

For initial evaluation you could request a non-NDA version of materials.
If you initiate serious diligence of the deal you can evaluate signing an NDA or bringing on a 3rd party expert to evaluate the technology under NDA.
For an initial review, a basic Google or PubMed search will often provide a surprising number of products, publications and patents in a space - the (non NDA question) can be "how are you substantially better, and poised to dominate this market?"

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