Overview
Partnership discussions require careful information sharing. You need to disclose enough to evaluate synergies and compatibility, but not so much that you've given away your competitive advantage if the deal falls through.
A well-structured NDA creates a safe space for these conversations, establishing clear rules about what can be shared, who can see it, and how long protections last.
💡 Key Principle
Partnership NDAs are almost always mutual. Both parties are typically sharing sensitive information, so both should be bound by the same confidentiality obligations.
What to Protect
Before entering partnership discussions, identify your crown jewels - the information that gives you competitive advantage and would hurt most if disclosed.
Critical Categories to Protect
📈 Financial Data
Revenue figures, margins, pricing models, customer economics, cash flow, funding status
👥 Customer Information
Customer lists, contract terms, relationship details, account sizes, renewal rates
💻 Technology & IP
Source code, algorithms, product roadmaps, pending patents, technical architecture
📊 Strategic Plans
Market expansion plans, M&A targets, competitive strategies, product launch timelines
Information Sharing Stages
| Stage | What to Share | NDA Required? |
|---|---|---|
| Initial Interest | Public information, general capabilities, high-level overview | No - but limit disclosures |
| Exploratory Talks | Non-public business model details, general customer segments, team structure | Yes - basic mutual NDA |
| Deep Dive | Financial details, customer data, technical specifications | Yes - enhanced NDA with specific protections |
| Final Negotiation | Full disclosure, data room access, contract terms | Yes - plus LOI/term sheet exclusivity |
What to Share (Safely)
While protecting your crown jewels, you still need to share enough to make the partnership conversation meaningful. Here's how to share strategically.
Safe Sharing Strategies
- Aggregate data - Share ranges or percentages rather than exact figures
- Anonymized examples - Case studies with customer names removed
- Outdated specifics - Prior year data rather than current numbers
- High-level architecture - System diagrams without implementation details
- Capability statements - What you can do, not exactly how you do it
- Third-party validation - Audited figures, certifications, testimonials
⚠ Verbal Disclosures
Many NDAs only protect information disclosed in writing or marked "Confidential." If you're sharing sensitive information verbally, ensure your NDA covers oral disclosures (typically with a follow-up written summary requirement).
Red Flags in Partner NDAs
When a potential partner presents their NDA, watch for these problematic provisions that could harm your interests.
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One-Way Confidentiality
If you're both sharing information, you both need protection. Insist on mutual obligations or walk away.
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Overly Broad "Residuals" Clause
Allows the other party to use any information they can remember. Essentially negates protection for non-technical trade secrets.
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Non-Compete Hidden in NDA
Some partnership NDAs include restrictions on working with competitors or in certain markets. This goes far beyond confidentiality.
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Unlimited Affiliate Sharing
Permission to share with undefined "affiliates" could mean your information goes to entities you've never evaluated or approved.
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Short Survival Period
Confidentiality that expires in 1 year means they can use your trade secrets against you in year 2. Trade secrets should be protected indefinitely.
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Broad IP Assignment
Language suggesting that anything developed during discussions belongs to them. This should never appear in an NDA.
Recommended NDA Terms
When drafting or negotiating your partnership NDA, include these protective provisions.
Essential Partnership NDA Terms
Special Considerations for Joint Ventures
Joint venture discussions often require deeper information sharing than typical partnerships. Consider these additional protections.
JV-Specific NDA Provisions
- Ringfencing: Information shared only for JV evaluation, not for competitive use in other businesses
- Named individuals: Limit access to specific people on both sides who are directly involved
- Clean team provisions: For sensitive competitive information, use advisors not involved in day-to-day competitive operations
- Purpose limitation: Explicitly state that information is only for evaluating the JV opportunity
- Standstill provisions: Prevent using information to make unsolicited acquisition attempts
✓ Best Practice
For joint ventures, consider a two-tier NDA approach: a basic NDA for initial discussions, then a more detailed agreement with enhanced protections once you move to deep-dive due diligence.
Template Recommendations
When generating an NDA for partnership discussions, configure these settings for optimal protection.
| Setting | Recommended Value | Rationale |
|---|---|---|
| Type | Mutual | Both parties share information in partnerships |
| Definition Style | Specific categories + marking | Clear boundaries, easier enforcement |
| Disclosure Term | 2 years | Reasonable exploration period |
| Survival Period | 3 years (trade secrets: indefinite) | Protects value after talks end |
| Permitted Recipients | Employees + professional advisors | Standard, controllable scope |
| Oral Disclosures | Covered with 30-day written summary | Protects verbal discussions |
| Residuals | Excluded or heavily limited | Prevents memory-based workarounds |
| Return Obligation | Yes, upon request or termination | Limits ongoing exposure |
Next Steps
- Inventory your sensitive information - Know what needs protection before you start sharing
- Prepare a tiered sharing plan - Map what to share at each stage of discussions
- Generate or review the NDA - Use our generator or analyze their draft
- Establish ground rules - Agree on marking requirements and permitted recipients
- Document disclosures - Keep records of what was shared and when
📝 Related Resources
NDA Negotiation Playbook - Email templates and pushback strategies
Breach Response Guide - What to do if confidentiality is violated