family office in dallas reached out, said they want to invest in our seed round. before the call they sent over a one-way NDA where I'm the discloser and they're the recipient. seems backwards because I'm the one with confidential pitch info, not them.
but they're a real fund (i checked) and the partner sounds legit. is this just unusual or a red flag?
most VCs won't sign NDAs at all because they see hundreds of pitches. a one-way where YOU disclose to THEM but they don't reciprocate is actually the standard family office / strategic posture (they don't want claims that they "stole" your idea).
if you must protect something specific (proprietary algorithm, unique customer data), redact it from the deck. otherwise just sign and move on.
read the actual NDA carefully — some have crazy term lengths or non-compete-adjacent restrictions on YOU. 2-year confidentiality is normal, 7-year is not. zero restriction on the investor's own activities is normal.
I'm Sergei Tokmakov, California attorney (Bar #279869). The prior comments are right that one-way NDAs are common from sophisticated investors, but here's what to actually watch for in the doc:
(1) Definition of confidential information — should exclude info already public, independently developed, or learned from third parties. (2) Term of confidentiality — 2 years standard, 5 years acceptable, longer is a flag. (3) Permitted disclosures — internal team, advisors, lawyers, accountants on need-to-know. (4) Residuals clause — many investor NDAs include a residuals clause letting them use anything remembered without notes; in early-stage SaaS this is usually fine but read it. (5) No non-solicitation clause — should not bind you to anything beyond confidentiality.
If the term is over 5 years, residuals is overbroad, or there's any non-compete language, push back politely. Most legitimate investors will redline. Informational only.