1630 – Taking Away The Pain of NDA’s with NDAOK’s James Weir

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0:58with us right now james we're james you are the ceo and founder of ndaok your website is ndaok.com james thank you so much for joining us uh it's great to be here thanks for having me all right i i i think just based on the name i folks can probably guess what ndaok does but i'll We'd love to hear it from you. Yeah, it should be obvious. NDAOK is, in short, just an automated platform for reviewing and revising non-disclosure agreements. So we work primarily with investment banks, private equity firms, companies that have to, and enterprise sales organizations, companies that have to process hundreds of NDAs each year.

1:48And we make that process simple for them by using a combination of artificial intelligence and legal professionals to review and redline documents for them so that they don't have to. So what before NDA, what are what are folks typically doing? So the current process, well, before NDA, OK, the process was tedious. It was painful. It was time consuming. It was a major nuisance. people would, well, back up a second. When an investment bank goes out with a potential deal, they'll reach out to one to 200 potential buyers. But before those buyers can actually look at the deal and learn what company they're evaluating, they have to sign a non-disclosure agreement.

2:34So before, firms would have their associates read the agreement. Maybe they had some guidance from a lawyer, you know, a playbook that they would use, and they would review the document, mark it up, and send it back to the investment bank, who would then have to, you know, either send it to their client or review it themselves. And it was just a, it's a massive pain to go back and forth for a document that has, you know, very little value, ultimately. Yeah, right. That's my observation, is that typically when I hear, you know, folks are, you know, talking about NDAs, you know kind of like the standard language is yeah here's a standard NDA you can go ahead and sign that you know it's almost like I think most people like me like I've signed to NDAs and I don't get my attorney to review it because I'm like what I'm not gonna first off I'm not gonna say anything I don't even want to say it because like it's ridiculous I feel it always seems kind of silly to me because I'm like it's it's a gatekeeper right it's it's hey we're gonna be on our best behavior we're not going to do anything underhanded but you know the enforcing them is really difficult.

3:39How do you know who's spread your information? So it's really, it's kind of toothless, but you can't convince people to not do it. They're used to doing it. It's part of their process. So our mission is just to make that easier for them, to take that pain away. And if you can do it quickly and you can do it efficiently, then those agreements have some more value. Then it's worth doing. But if it takes you two or three days to review it and get, you know, and you have to go back and forth three or four times with another party. Oh, no. That value quickly goes away. Yeah. You know, James, you especially, let me kind of advocate on the sales side of this, right?

4:20That sort of friction entered into a sales transaction. Oh, man. That is, you're playing with fire in terms of like, you know, potentially, I mean, look, Look, you might only lose a deal every once in a while, but still, why would you want to do that? Or just slow down the process. People want to get paid. People want to get started. You want to get to market, that sort of thing. Just think of momentum, right? The idea in a previous life, I was the CFO of a software company. We were an enterprise software company. And so the software was very heavily customized for our customers' specific use cases.

5:00and every customer, you know, our sales people would have a great preliminary call and the customer, the potential customer would say, oh, this is great. You know, we'd love to tell you why we need this before we can do that. We need you to sign an NDA. And that basically puts a halt on all of your momentum. And the longer it takes you to get that follow-up meeting scheduled, The longer it takes you to keep that conversation going, the harder it is to keep that momentum alive. And so when I was CFO, my background is in law. I practiced law for 10 years in New York before moving to Austin, Texas.

5:41I handled all of our legal work. So I would drop everything to review that NDA because I didn't want to be the bottleneck in that process for our sales team. But even as fast as I could go, inevitably, just that process of saying, you know what, we got to take a pause in this conversation so that you can review and sign our NDA. Let's schedule a follow-up call for two weeks from now. That really puts the brakes on a lot of those conversations. Yeah. Okay. Well, so, again, just so I understand how NDAOK improves this process. So the way that I typically see this, right, is maybe there's like some sort of a PDF or certainly if we're in person, you know, you just kind of sign it or whatever.

6:29Like, obviously, I can only speak for myself. And, you know, I'm just not doing these gigantic deals where I need to, you know, kind of like redline everything with an attorney. Like it's just, it's very, very rare for me. But again, I may not be kind of that target audience for this solution. But my, you know, when I have done it, it's usually they send me a link. I look at it and kind of like I click the yellow sign here, puts my signature in there, and I submit it. How does NDOK improve on that process? Because that doesn't seem too painful for me. No, if you're just, if you're getting a link through DocuSign and you're just signing it, that's, you know, that's not a painful process at all.

7:15Excuse me. For most of our users, though, they're receiving an email, either they're the investment bank and they're sending out an NDA, they're a private equity firm, they're receiving the NDA or their, you know, enterprise sales organization and they're receiving an NDA from a potential customer. Usually it's over email. It's a document that's in Word. Maybe it's in PDF. And now it needs to be reviewed. And I think an interesting thing about it, or interesting thing about a lot of our customers, is they claim to not really care much about these NDAs. They know that they're a nuisance. They know that they've got to get them done quickly.

7:54But there are three or four, maybe five issues they really care about. And we've got to get this right every time. So, which ends up being pretty much every document needs some revision to conform to those requirements. The way we work is our users tell us exactly what they care about. We don't tell our users what they should or should not care about an NDA. They tell us. It's their standard. It's their unique requirements, whatever they may be. And then when they receive an NDA, all they have to do is go to their account on ndaok.com, upload the NDA, and then click review. Instantly, we will use our proprietary AI to review the document, identify the terms in the agreement, and then mark it up so that it conforms to that user's requirements.

8:49And then once that's done, that user can either take that red line that we've generated and manage the communication, send it back to the counterparty. But we actually go a step further and that user can use NDA OK to actually transmit those edits to the counterparty, get their approval, and then both parties can sign electronically through NDA OK when an agreement has been reached. So for bankers and for private equity firms and for sales organizations, it's really as simple as uploading the NDA that they've received and just getting a notification when the process is done. Yeah. And can you share just a little bit more about like enforcement?

9:33Like, you know, what is obviously legally you need to cover your bases. It's just, you have to do it. Right. But then, you know, is, does the process through and how does the process through NDAOK, how does that make enforcement, I don't want to say enforcement, but just it, maybe it does a better job of keeping people aligned, or if there is a concern, you know, you know, where my NDA, okay, improve outcomes for someone who feels like, you know, just was, you know, violated in some way. Yeah, I, it's, that's a really tough question, because enforcement is a really difficult issue. How do you know when somebody has read your information?

10:26And if your information gets out there, how do you know who is responsible for it? Enforcement is really tough, which is why NDAs have limited utility. There's limited value there because what are you going to do? Your remedy is to go sue them. You pretty much already had that remedy because you already own your intellectual property. This is just kind of formalizing it in a contract rather than in some other form. The bigger piece that I think our users really care about and what helps with not necessarily enforcement, but protection is the consistency across the board. So let's say you're a sales organization or you're a private equity firm and you've got 10 sales guys, or you've got 10 associates, and each one is a playbook that, you know, and they're reviewing their NDA, or maybe you've even got a legal department, and you've got, you know, maybe you're a large organization, you've got 10 lawyers reviewing NDAs.

11:27Chances are, they're not going to be consistently marked up across the board. There are going to be things that either get missed, or, you know, one person interprets something this way, another interprets it the other way. There's, you know, and especially if you're using non-lawyers to do it, it's not their job. They're playing lawyer. And at the end of the day, they're going to make mistakes. They're going to, they're not necessarily, they're not necessarily going to understand why certain changes need to be made. And so one of the things that a key advantage for using something like NDA, okay, or, or, you know, another service provider is to get that consistency across the board so that the things that you care about are in every NDA or are not in every NDA.

12:11You know, they're either present or they're not. And they're revised and edited so that we're giving you and you get exactly what you're looking for every time. Yeah. And today for NDAOK as a business, how have you, obviously you've got some, you know, you're doing some great work. You've got a great client base. But how do you take how have you taken this to market? You know, how do you attract new clients? Yeah. You know, that's in part, you know, we have a solution that addresses a major pain point for, you know, again, investment banks, private equity firms, sales organizations. They don't really need a lot of convincing to know that it's a problem for them.

13:00when I talk to people about it, one of two things happens. Either I say, hey, I run NDA OK, and we built an automated solution for processing non-disclosure agreements, and either their eyes gloss over, and I know, OK, this isn't a problem they have. They don't sign a lot of NDAs. They don't know just how painful and what a hassle they are. or they light up and they say, oh, tell me more. That's a problem that we have. There's such a nuisance. There's such a pain. How can we make that easier? And so at that point, it's really just a matter of saying, look, we can just take that off your plate so that you don't have to even think about it.

13:45Yeah. All right. So and then how do you, I mean, structure pricing, engagement, like that sort of thing, like implementation? Yeah, our onboarding process is super easy. You know, we just need to have a, we can do it in a short 20 minute conversation, really just understanding what issues you care about. And we'll run you through kind of a, you know, a gamut of, you know, what potential, you know, the various nuances in certain terms and, you know, what you're willing to accept, what you're not willing to accept. And once we have that conversation, we build what we call a review standard. And our users can build as many of those as they want.

14:24So if they, you know, maybe they have different requirements based on different scenarios. So if it's a, you know, a one-way NDA, they require certain things. If it's a mutual NDA, they require different things. we can account for all of those we just build different review standards based on on the scenario and then you're ready to go then every time you upload a document you choose what standard you want to use again they're your unique standards they're not you know things that we've told you are good or bad and then every document will be reviewed to that to those requirements Pricing, we keep simple as well.

15:03We have a couple of different options. Some of our users, they're used to using lawyers. They're used to using other services. So they like to pay on a per document basis. We can accommodate that. Other users like to pay, just have a flat monthly SaaS fee. And we work with them that way as well, based on what kind of volume they're doing. I should point this out, James. you have a pretty qualified background that led you to this. Do you mind sharing a little bit about kind of where NDAOK came from and like why you were the guy to bring it to market? Yeah, it's not something I set out to do, but my professional background just kind of brought me to this point.

15:52I started my career as a lawyer in New York. I was a securities attorney, I practiced for 10 years in New York before moving here to Austin when, you know, and in making that move, I decided I didn't really want to do it anymore. I kind of I done it long enough that I could see the horizon. I knew what the next kind of 30 years of my life was going to look like, and it wasn't what I wanted. So in making the move here, I decided to try my hand at different things. I first started as the COO of a early sage technology company that was using a great company called Smarter Sorting. Give them a little plug, too.

16:36And they were using artificial intelligence. They still are using artificial intelligence to identify and categorize household hazardous waste, things that need to typically be incinerated and incinerated at pretty high cost. So we were using AI to identify those products and sort them into better waste stream or more efficient waste streams. I then moved over and became the CFO of a enterprise software company that was doing edge computing and IoT. And that's where as the CFO who handled all the legal work, I was dealing with two or three NDAs a week. And after two and a half years of that, I realized there's got to be a better way.

17:20They were such a nuisance. And there's such standardized agreements that, you know, I think a lot of people look at them and just say, you know what, they're all the same. I'm not going to, you know, I'm not going to spread this other person's information. They just sign it and move on. but you kind of have to review it because there was some crazy stuff that I saw in a few you know one every 50 would have something kind of bonkers in there that you really didn't want to want to have yeah so you still had to review them it was just such an inefficient and painful process that I realized there's got to be a better way so I started kicking around the idea for an automated solution that could use AI to do this.

18:05And I contacted the advisor for that first company, Smarter Sorting, the AI advisor, his name's Russell Foltz-Smith. He'll probably hate me for describing him this way, but he's a semi-retired guy in LA that has seen a million of these things. And he takes on projects that he's interested in. He was the first employee at Wolfram Alpha. He built the data platform for Truecar. So he's seen a million of these things. And I just reached out to say, look, I've got this idea. Can artificial intelligence do this? Can it read a contract and identify problems and revise it? And I was half hoping he was going to say, no.

18:51The current state of AI can't do that. And I could just kind of move on with my life and move on. Instead, he said, yes, that's exactly the sort of routine, monotonous, you know, administrative headache kind of thing that artificial intelligence should be doing. That's exactly the kind of work that it should be taking away from us. And he was excited by it and wanted to help launch it. And so I thought, well, shoot, if he thinks it's a good idea, then I kind of have to do it because he's seen a million of these things. And that was late 2019. And then we spent the next six months kicking the tires on it, validating who else has this problem.

19:39Is it just me or do other people suffer through these things as much as I have? And we really validated that, yeah, this is kind of a universal problem. NDAs make up over 90 % of the contracts that are signed on a daily basis. Right. I mean, our private equity users, they're signing, you know, four to four to six hundred NDAs a year. I don't know how many investments they're doing, but they're not doing, you know, they're not doing that many. So, you know, it represents the single NDAs or the single most frequent legal problem most companies face. So, and that's how we got started. And, you know, I never set out to start a company, but it was really just kind of the accumulation of all those experiences coming together.

20:28Well, James, we are again, you're the founder and CEO of NDAOK. The website is NDAOK.com right on the front page there. You'll see a button that says request a demo. James, congrats. And it's great having you as a guest on the podcast. Thank you so much for joining us. It's been great. Thanks very much, Josh.

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