I’d like to give you assurances that your business plan won’t circulate among potential industry competitors, but I can’t.  It happens.

What I can assure you is venture funds are not likely to steal your ideas and morph into your main competition.  The purpose of a venture fund is to invest in high potential companies like yours, not operate them. 

I also believe there are high integrity venture capital professionals who respect the proprietary work of entrepreneurs.  As an example, a few months ago I referred an executive summary to Clifford Haas, a partner with Sigma Partners.  He called me to say he couldn’t look at the deal further because one of his portfolio companies was now exploring the same emerging market.   

Since not every VC is a class act like Cliff, here are a few things you can do to help minimize VC’s sharing sensitive information with potential competitors. 

• Don’t send entire business plans, patent filings or other detailed proprietary information to fund managers as part of an initial solicitation.  Start with an executive summary.

• Take the time to read about theventure fund’s portfolio companies. Do any of these companies have similar technology or market goals as you? Be wary if they do.

• Include a standard confidentiality notice on the cover of your business plan rather than ask a fund to sign a confidentiality agreement (a clear sign of a rookie entrepreneur).  Funds just don’t have the time to negotiate agreements with every entrepreneur who seeks venture funding.  Plus, larger funds argue that they see so many similar plans they are not in a position to police innovation.  That’s the purpose of intellectual property law.

Despite your reservations about the venture community, there is a far more likely way you can lose your competitive advantage.  It’s all about how fast good ideas are copied in the marketplace.

Here’s an example.  I have a friend who co-founded a women’s magazine called Simplicity.  After a highly successful launch, large magazine publishing houses took note.  Months later, a look-alike magazine called Real Simple rolled out offering perks for advertisers, subscribers and distributors.  Simplicity couldn’t survive. 

The lesson from Simplicity is simple.  No matter how brilliant the founding idea, execution matters more.

The best way to protect your company is to surround it with strength.  Seek out deep pocket partners to help develop or market your products before competitors surface, lock down your distribution, protect your intellectual property, hire the best staff and consult mentors from your industry.  It’s easier (and less exhausting) to stay one step ahead if you have strategic help along the way.

You also need money which brings us back to trusting the professionalism of potential investment partners.  After 11 years of development, I’d say it’s time to expose your ideas to the venture community. 

You can’t let competitive fear paralyze your efforts to raise money or enter into industry alliances that can help your company progress.  At some point, you have to trust your instincts and move forward.  You can do it.