You have assembled your team, pooled your funds, or secured a backer; now, you just have to find the right asset to be the launchpad for your company’s growth. However, before potential sellers will show you their cards and invite you into their data room or sales process, they will inevitably require that you sign a Confidentiality and/or Non-disclosure Agreement (we will just call them “NDAs”). Typically, these NDAs aren’t very long and don’t appear very complicated…but don’t let this fool you.

The reality is that you aren’t likely to find your dream asset or be the winning bidder in your first data room, or the second, or the third. You may have to look at dozens of packages to find the right fit. If you are required to enter into separate NDAs for each potential asset acquisition, you could quickly find your company boxed in with Areas of Mutual Interest (“AMI”), non-competition, non-solicitation, and non-disclosure obligations.  The last thing you want is for these obligations that you incurred for an asset that you didn’t buy to prevent you from acquiring that asset that you want to buy. Each of these NDAs has its own wrinkles, its own timelines, and different counterparties, which you may not know well until you are already in their data room.

Avoiding the potential pitfalls of this situation is easier than you might think.  First, reach out to your RR&A attorney to develop a plan.  We have guided dozens of companies through this process and can help you tailor your approach to fit your company’s goals.  Together, we can establish your tolerances for language and restrictions that you can live with and then apply those consistently in the review and negotiation of each NDA.  Next, establish a tracker or ask us to do so, so you always have a line of sight on the obligations that each NDA imposes on you.

If you don’t have a plan, NDAs have the potential to tangle your company and stifle growth.  Let RR&A simplify the process.