GPs can spend months finding the right investment opportunity. By the time you’re ready to present an offering, you’ve spent countless hours on due diligence, projections, and analysis. As $3.7 trillion in dry powder sits on the sidelines, and great opportunities become scarcer, your intellectual property is more critical than ever. The last thing you want is this information getting into your competitor’s hands.
A Non-Disclosure Agreement (NDA) protects your data and your business by preventing potential investors from sharing your data with someone else.
What is an NDA?
A Non-Disclosure Agreement (NDA) is a legally binding contract that protects confidentiality between parties. GPs and fund managers can leverage NDAs as part of the fundraising process to give investors access to decision-making details like:
- Financial statements
- Market analyses
- Projections and forecasts
- Property details and valuations
Why NDAs matter in real estate fundraising
The benefits of NDA for GPs and fund managers include:
Protecting sensitive information
To help investors make a decision about your specific project, they need access to financial and strategic data. Examples can include property valuations or future development plans. If competitors gain access to this information it can undermine deal negotiations and disrupt the entire project.
Maintaining a competitive edge
Deal flow and underwriting are part of your competitive advantage, so keeping tight control over intellectual property and proprietary information helps protect your market position. If other operators gain access to your methods, it can threaten your long-term growth.
Building trust with investors
Investors trust your operations and share their sensitive information, like accreditation status and bank account details. NDAs show that you prioritize privacy and security, giving LPs confidence that their information is in safe hands.
Avoiding legal and financial risk
Most real estate projects require GPs to sign NDAs as part of the purchasing process. If an investor shares this information with outside parties, it can lead to legal disputes and financial losses. NDAs provide legal recourse to protect GPs and fund managers from data breaches.
NDAs: virtual vs. physical use cases
GPs and fund managers may use virtual or physical NDAs to support your operations depending on the use case:
| Use case | NDA type | Details |
| Investor deal review | Virtual | Investors sign NDAs prior to accessing deal documentation through online platforms like Agora. |
| Distribution of brochures | Virtual | GPs share digital brochures, presentations, and financial projections through virtual deal rooms. |
| In-person meetings and site visits | Physical | Investors receive physical copies of project documents during face-to-face meetings. |
Virtual NDAs
Virtual NDAs provide a streamlined way to secure sensitive information in online fundraising, investor portals, and digital data rooms. Integrated platforms like Agora allow investors to electronically sign agreements before accessing deal information. These use cases provide convenience and speed to better support your fundraising efforts.
Virtual NDAs support situations where:
- Investors access online platforms to review deal documentation.
- GPs distribute digital brochures and investor presentations.
- Virtual data rooms store and share financial details, projections, and property valuations.
Physical NDAs
Any in-person meetings like site visits or face-to-face negotiations might require a physical NDA to protect proprietary information. An example might be if an investor visits a property site or joins a private strategy session.
Physical NDAs apply in scenarios where:
- Investors need to attend in-person meetings or site visits.
- GPs share physical copies of project documents or financial statements.
- Investors and GPs hold private discussions around future project strategies.
How Agora enhances security and confidentiality
GPs and fund managers can raise capital faster and more securely with Agora’s built-in NDA features. Our integrated platform lets you quickly customize NDAs for your project in just a few clicks. Investors sign your NDA before accessing any materials, making the process simple, automated, and secure.
This seamless process verifies that:
- Your sensitive info stays safe, online and in person.
- Investors sign NDAs before seeing project details, lowering data breach risks.
- Investors can review opportunities without risking your project’s privacy.
Conclusion
Keeping critical information confidential and secure protects your intellectual property. Using Agora’s investor management platform to ensure it all happens is just one less thing you have to worry about. With an integrated NDA process, you can focus on what really matters – growing your business and closing the deal.
