hello! i have recently been asked to take over negotiating NDAs at my mid-west PE firm (we have decent size). i am not a lawyer by training. how can i learn about what i should and shouldn't accept in a PE NDA? dont want to blow up the firm and agree to something accidentally.
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Hey VivvianeOrVivv, I think you deserve a response...heck, everyone does. We're listening, sorry about the delay ...my best guess at places on WSO that could help:
You're welcome.
Ask the team what has been acceptable / non-acceptable in the past.
Are there deal breakers?
Pay attention to: - length of term - scope of non-solicit - venue - representations - injunctive relief - tail provisions and other restrictive covenants
Ask your deal Partners what is make or break for the firm, i.e. the things that you absolutely cannot accept.
Retention of information is a big one
I love NDAs. They're an incredibly effective tool in the early stages of a deal, but not for the reasons you think.
For a banker, the NDA negotiation process is for one purpose: finding out how tough someone will be to work with through the deal.
I know, I know ... the protections in NDAs are important, don't want employees poached or information leaked, yadda yadda yadda. Everyone has their hot-button issue that they absolutely won't bend on. But of however many hundreds of deals the people in my previous firms have worked on, none of us have ever seen an NDA litigated. Not once.
So the point, then, is to show me what you're like. If you sign an NDA and send it back immediately to get on with the stuff that matters, I know you're responsive and interested. If you take three days and come back with a marked-up NDA that makes sentence structure suggestions, then you're going to be a giant pain in the ass with the term sheet or the PSA or any other document to be negotiated, and you've just shown me that this whole interaction is going to be a grind. Bottom of my list you go.
To get back to the actual question that was asked: @m8" had it right, your job on the buy-side is to channel the partners' attitudes, so ask them for their primary concerns and then act as if you were an extra pair of hands for them. But be conscious of the message it sends if you are a hard-ass on the NDA.
Can confirm. Many of the worst mark-ups these days come from incloud or other outsourced NDA negotiators.
Decent size PE firm doesn’t have a lawyer?
Associates help negotiate NDAs (with outside counsel) at many funds incl my old firm which is large cap
To date I always received NDAs from associates who directly cited mark-ups from their counsel
Are there any resources you recommend to learn up on NDAs as an associate with a non-legal background?
Having worked with PE firms as a consultant, I just want to throw out there that NDAs seem to be a pretty common pain point - that is, everyone hates their process and it's a huge thorn in the side of the front office
So I don't have an answer for you as I've never worked PE, but am chiming in to say there may not really be a great answer
Ontra/InCloud/whatever they are called are the absolute worst. They will go through 5 turns of NDA just for kicks.
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