Negotiating with an investor

Good evening

I met a person that asked me if I need an investor in my business. So, how do I negotiate with him in a way that he will not steal my business idea?


A very difficult balancing act.

You are correct, it is always difficult to be sure it is an enquiry from a genuine investor, and not someone who wants to steal a march on your business.

Why did he approach you ?

You can ask him to sign a non-disclosure agreement, or NDA.  You will find templates on the internet. That in theory prohibits him from talking about your idea, but is not enforceable. It is therefore of very limited value, but may serve to flag up how seriously you are taking the issue

So, tell him a little, but hold something back. Tell him enough to interest him, but keep your key and unique ideas and processes confidential. If he pushes you for more detail, say you will tell him more if and when he invests

However, think very carefully. Do you know and trust him? Do you want to go into business with someone you don’t trust enough to share your business plan with?

Do you need an investment partner? You say that he approached you. if you can manage without an investment from him and don’t trust him, I would not get involved.

I suggest you talk to him without giving too much away, and see how you two get on. How do you feel about working with him, do you trust him?

Critically evaluate your business plan and your cash flow forecast to determine if you need an investor. And if you are not sure of him, them look to banks or other institutions to provide investment capital.

Good luck in your venture