1. Evaluate the situation in which Mason and Shepherd find themselves with respect to their existing employers. What legal and ethical issues do you see and how would you advise them to proceed? Mason's endeavor for the venture creation is strictly bounded by her employment agreement with ATS. That is to say, she will be in clear violation of the Noncompetition, Nonsolicitation, Nondisclosure and Development provisions, if she plans to pursue the venture within one year by utilizing the information and social network she gained from the company. So the first barrier she need to tackle is to prove this new business is not in competition with ATS at all. Also she cannot speak with any current customers of ATS. These limitations…show more content… 2. Evaluate the Non-Disclosure Agreement and its potential impact on venture capitalists considering an investment in Intlisoft. If you were a venture capitalist, why would or wouldn’t you sign? (Ge Tian)
If I were a venture capitalist, I would not sign the Non-Disclosure Agreement (NDA). As a matter of fact, most of the venture capitalists would not sign such kind of agreements. Entrepreneurs sometimes request the venture capitalist to sign Non-Disclosure Agreement because they are worried about the security of their intellectual properties. As a result they are seeking protection from the NDA to comfort themselves in that way they think their intellectual properties are protected by law. However, this kind of thought is naive in reality. If venture capitalist signed NDA, it could put them under the risk to face prosecution. NDA will also severely limit the amount and type of transactions, VCs will have to reevaluate their portfolio; as a result their interests will be badly damaged.
Besides the potential risks and interests loss that might incur by signing NDA, there are some other reasons for VCs not to sign NDA. Nowadays, VC need to read thousands of business plan every year, if they hire lawyers to spend time reading thousands copies of NDA, they would not have extra money and time to do other things. The opportunity cost is huge. Furthermore, many entrepreneurs when they start their first company