Lateral Capital Management

Our Confidentiality Policy

We Do Not Promise Confidentiality On What Is Sent To Us?

Most entrepreneurs are very protective of their ideas – and rightfully so. Typically, this means they try to protect everything by marking it “Confidential,” “Secret” or our favorite, “Destroy Before Reading!” We try to honor the spirit of these words and we do our best, as a matter of principle, not to disclose information which could disadvantage the companies we have talked to – whether or not we invest. In fifteen years of investing, we have never had an issue in this regard.

That said, we want to offer some very specific guidance as it relates to confidentiality and our approach to protecting what people send us:

  • Please don’t send us anything which is truly confidential or proprietary. As we say specifically at the bottom of every email, anything sent to us by any means becomes our property upon receipt. This sounds a bit harsh, perhaps, but it is based on how the Early Stage investing market really works. In short, we have observed that these days, everyone seems to share everything with everyone, no matter what words are used to try to control the use of various documents. The truth is that most companies can probably say a great deal about their business plans and results to date that is already known to others. Remember, if anyone outside of your company already knows about what is shared with us outside of a Confidentiality Agreement, it is already “non-confidential” anyhow. Here is the language which governs our approach to confidentiality:
No confidentiality is provided as to any submission or communication with any Lateral Capital entity, absent a confidentiality/non-disclosure agreement manually signed by the parties prior to receipt of such submission or communication.
  • Please don’t ask us to sign NDAs. We don’t and we won’t. The reason is twofold. First, with the number of businesses we look at, it would be impossible to remember what we read where and what is truly confidential about any individual proposal. Second, we find that most of what people want to cover in Confidentiality or Non-Disclosure Agreements – really isn’t confidential! That means that piece-by-piece, the information “covered” by the CDA/NDA has already been disclosed to suppliers, customers or aunts and uncles. We don’t want to put ourselves in the position of holding confidential what other people have already been told. This rule is hard and fast: we have walked away from more than one opportunity because we would not sign a CDA/NDA.
  • If your idea is not patented, you should discuss with an intellectual property attorney how best to protect your rights.. Your state’s Bar Association can provide you with guidance regarding the names of attorneys who practice in your field. If there isn’t something ownably proprietary about your idea – something which is patented, patent pending or otherwise defendable – it probably isn’t a business we would invest in anyhow. Think of it this way:
    • If your idea is patentable, you should file a Patent.
    • If you have filed a Patent, you are protected.
    • If it’s not patentable, or protectable in some other way, you can still show us – but we probably won’t be interested in investing.

One other thought. We have a great attorney in Kevin Spreng at Fredrikson & Byron. Across dozens of deals which he has negotiated on behalf of Lateral Capital, we have had nothing but positive reactions to his approach and demeanor. If you want to have your lawyer talk to Kevin about any of these issues, please let us know.