Industry
What Silicon Valley and Austin startup NDAs should cover: clauses, terms and survival
How NDA clauses work for Silicon Valley and Austin startups: mutual and one-way forms, California non-compete limits, trade secret and return-of-materials terms.
What to take away
- Silicon Valley investors read NDAs for assignment, governing law and remedy language, and they expect Delaware or California law to be named plainly.
- Austin startups with contractor-heavy teams add work product ownership, non-solicit and Texas venue clauses that California founders rarely need.
- California non-compete limits mean a California NDA cannot lock an employee out of working for a competitor, so confidentiality and trade secret clauses carry the weight.
- Every NDA needs a defined term, a trade secret clause, a return-of-materials duty and a survival period that outlives the agreement.
- Run the checklist in the last section before you send anything to a counterparty.
Mutual versus one-way NDAs for venture-backed startups
A Mutual NDA protects both sides. Each party promises to keep the other side's confidential information private, and each can be the discloser or the recipient.
Mutual or One-way NDA?
Swapping real information both ways?
Mutual NDA
One-way NDA
Use it when you are swapping real information: a diligence file, a technical architecture review, a pilot with a potential design partner. Most seed and Series A conversations in Silicon Valley run on a mutual form because both sides hand over something.
A One-way NDA protects one side only. The recipient takes on the duty and the discloser takes on nothing.
Use it for employees, interns, contractors, advisors and anyone who sees your code, your cap table or your customer list without giving you comparable information back. A one-way NDA template is the right default for hiring and vendor onboarding.
The mistake founders make is signing a mutual form with a contractor. The contractor then claims the same protection over their own methods, and you end up arguing about whose process was confidential. Match the form to the flow of information, not to how friendly the meeting felt.
If you want a starting draft for either direction, our NDA template for employees and contractors covers both the one-way and mutual versions side by side.
What changes when money is involved
Investors, acquirers and corporate development teams usually send their own paper. Read it before you sign.
Their form will often define confidential information to include everything they tell you and everything you tell them. That sounds mutual but rarely is, because they disclose far more.
Clauses Silicon Valley investors expect to see
Silicon Valley startup contracts have a recognizable shape. Counsel and investors look for the same handful of clauses, and a missing one slows a deal.
Silicon Valley and Austin deals both move quickly once the paper is clean, which is why the list stays short.
Clauses Investors Expect
- Confidential information definition with marking rule
- Standard carve-outspublic, prior, third-party, independent
- Residuals clause, if either side wants one
- Assignment clause binding successors and assigns
- Governing law and venueDelaware or California
- Injunctive relief language for irreparable harm
- Assignment. Work product and inventions created for the company belong to the company, and the counterparty assigns them.
- Governing law and venue. Name Delaware or California law, and the county where a dispute would be heard.
- Residuals. If the other side asks for a residuals clause, keep it narrow or refuse it, because it lets people use what they remember.
- Remedy and injunctive relief. State that money damages may not be enough, and that the discloser can seek an injunction.
That last clause is not decoration. Without it, a founder chasing a departing engineer in Santa Clara County has a harder time getting a temporary restraining order.
Export control and security riders
Deep tech, defense-adjacent and biotech companies in the region often attach a security exhibit. If the work touches defense articles or dual-use technology, the exhibit should name the regime it follows: the International Traffic in Arms Regulations (ITAR) at 22 CFR 120–130, the Export Administration Regulations (EAR) at 15 CFR 730–774, or the sanctions programs administered by the Treasury's Office of Foreign Assets Control. For handling controlled technical data, most exhibits point to NIST SP 800-171, Protecting Controlled Unclassified Information in Nonfederal Systems and Organizations, and to the NIST Cybersecurity Framework for the security program around it.
Clauses Austin startups add for contractor-heavy teams
Austin startup legal templates lean toward contractor relationships because so much of the city's early-stage work is project-based. Marketing, firmware, design and back-end builds get farmed out before the first full-time hire.
Silicon Valley vs Austin NDAs
Silicon Valley
- Hiring model
- Full-time earlier
- NDA focus
- Employees
- Key additions
- Standard clauses
- Venue
- Delaware, California
Austin
- Hiring model
- Contractor-heavy
- NDA focus
- Freelancers
- Key additions
- Work product ownership
- Venue
- Travis County, Texas
Silicon Valley and Austin teams diverge here: the valley hires full-time earlier, so its NDAs cover employees more often than freelancers.
That changes the NDA in four ways.
Clauses Austin startups add
- Work product ownership. State that all deliverables, code, designs and documentation created under the engagement belong to the company, and that the contractor assigns them on creation.
- No implied license. The contractor keeps no right to reuse your materials, your data or your brand in a portfolio without written permission.
- Subcontractor flow-down. If the contractor uses their own freelancers, the same confidentiality duties must bind those people, and the contractor stays liable for them.
- Texas venue and law. Travis County and Texas law are common, though many Austin companies still pick Delaware for consistency with their incorporation documents.
A non-solicit of your employees and customers is common here too. Texas Business and Commerce Code section 15.50 enforces a covenant not to compete only when it is ancillary to an otherwise enforceable agreement and reasonable in time, geographic area and scope of activity, so keep the non-solicit narrow and time-limited.
Secrecy alone does not transfer the copyright in the code someone wrote for you. Pair the NDA with a separate contractor agreement, and keep the two consistent.
California non-compete limits and what they mean for NDAs
California non-compete limits are the single biggest difference between an NDA drafted for Silicon Valley and one drafted for Austin or most other states.
California Business and Professions Code section 16600 voids contracts that restrain someone from engaging in a lawful profession, trade or business. Courts read that broadly.
What this means in practice:
California NDA Do's and Don'ts
- Do not include a non-compete for California people
- Do not use an overwide customer non-solicit
- Do rely on the trade secret clause
- Do keep confidential information definition tight
For Silicon Valley and Austin founders, the practical rule is the same: keep the non-compete out and lean on the confidentiality terms.
For employees generally, at-will language, leave rules and remote work terms sit in a different document. Our employee handbook template by state walks through how those state differences show up.
Non-solicits are not automatically safe
A non-solicit of employees is usually enforceable in California if it is narrow and short, because the person stays free to work in their trade. A non-solicit of customers is riskier, and California Civil Code section 3426 protects your trade secrets whether or not the covenant survives.
If it effectively blocks the person from earning a living in their specialty, a court can strike it.
Trade secret, term and return-of-materials wording
A trade secret clause is the engine of the whole agreement. It should say what a trade secret is under applicable law — the Uniform Trade Secrets Act as each state adopted it, which in California is Civil Code section 3426 and following and in Texas is the Texas Uniform Trade Secrets Act, Civil Practice and Remedies Code chapter 134A. It should also confirm that the NDA grants no license or ownership interest, and state that the discloser can seek injunctive relief in addition to damages.
Two Clocks in an NDA
- TermAgreement in force, commonly 2-5 years
- SurvivalConfidentiality duty after termination
- Trade secret survivalIndefinite while protected
Add a federal hook. The Defend Trade Secrets Act, 18 U.S.C. section 1836 and following, gives a trade secret owner a civil claim in federal court, and 18 U.S.C. section 1833(b) requires the whistleblower immunity notice in any agreement that governs the use of trade secrets or other confidential information.
Put that notice in the NDA itself so you do not have to amend every employment agreement later.
Term and survival
Two clocks run in an NDA. The term is how long the agreement stays in force, commonly two to five years.
Survival is how long the confidentiality duty lasts after termination, and for trade secret material it should be indefinite for as long as the information stays protected.
Do not set a single three-year clock for everything. That is the most common drafting error we see, and it quietly releases your source code and customer pricing into the wild.
Sample wording: "This Agreement stays in force for [three] years from the Effective Date. The confidentiality duty survives termination for [five] years, and continues while the information remains a trade secret."
If you want one default instead of a range: a three-year term for ordinary information, a five-year survival period for that information, and indefinite survival for anything that qualifies as a trade secret.
Return of materials
Return-of-materials wording should cover physical documents, devices, credentials, cloud storage and any copies the recipient made.
Add a certification that the recipient destroyed what they could not return, and a carve-out letting them keep one archival copy for legal compliance.
Sample wording: "Within [ten] days of termination the Recipient will return or destroy all confidential material, including copies held in cloud storage, and will certify that in writing. One archival copy may be kept for legal compliance."
Worked example
A two-person Austin team signs a one-way NDA with a contract firmware developer. The term runs three years. Confidentiality for source code survives indefinitely.
Work product is assigned on creation. The developer must delete local copies and confirm in writing.
Texas law governs. No non-compete appears, because the developer may later work for another client in the same field, just not with this company's code.
NDA checklist before you send it to a counterparty
Run this list every time. It takes four minutes and prevents most redlines.
NDA Pre-Send Checklist
- Mutual or one-way chosen to match information flow
- Confidential information defined with carve-outs
- Trade secret clause with injunctive relief and notice
- Term and survival stated separately
- Return or destruction of materials required
- Governing law named, no California non-compete
- Signatures complete with name, title, entity, date
- Name the parties in full, using the legal entity name and the state of formation.
- State the effective date, the term and the survival period as separate items.
- Match the governing law to where the signer actually works.
- Define confidential information and carve out what is already public or independently developed.
- Add the trade secret clause, the no-license statement and the Defend Trade Secrets Act whistleblower notice required by 18 U.S.C. section 1833(b).
- Add work product assignment if the other side is a contractor.
- List what comes back or gets destroyed, and require written certification.
Check your governing law choice against the state where the person actually works, not where your entity is incorporated. A Delaware corporation with California employees still faces California limits.
Keep the paper trail consistent
An NDA that contradicts your offer letter or contractor agreement is worse than no NDA. Version-control the documents and note which form applies to which relationship.
Our policy templates explain how to separate a binding rule from a guideline, which helps when you decide what belongs in the NDA and what belongs elsewhere.
Where the rest of the paperwork fits
NDAs are one document in a stack. Offer letters, contractor agreements, equity grants and vendor terms all touch the same information. If you are building that stack from scratch, the policy templates checklist shows a layout that holds up when a lawyer reviews it.
When you sell or raise, the buyer will ask for every NDA you have signed with employees, contractors and vendors. A clean folder beats a scramble. The same discipline applies to the documents you send outward: proposal templates that mirror the buyer's own questions get answered faster.
Compliance check before you send
Run one compliance pass before you send the document. Three items decide whether it holds up: the federal trade secret notice, the state statute you named as governing law, and any export control regime attached in a security exhibit.
The notice belongs in the NDA itself. Under 18 U.S.C. section 1833(b), the agreement must tell the recipient that an individual cannot be held liable under federal or state trade secret law for disclosing a trade secret in confidence to a government official or an attorney solely to report or investigate a suspected violation of law, or in a court filing made under seal.
Then test the governing law against the state where the signer actually works: California Civil Code section 3426 and Business and Professions Code section 16600 on one side, Texas Business and Commerce Code section 15.50 and Civil Practice and Remedies Code chapter 134A on the other. If a security exhibit is attached, confirm it names ITAR, the EAR or OFAC sanctions instead of a general promise to keep data secure.
