How to protect my code?

If a potential investor/new shareholder wants to enter agreement with my company on condition of seeing the code we use. How do I protect myself from the party stealing my code?

• A potential partner has approached us with the offer of development resources (which are needed) plus channel plus early revenue - this is all credible and verified. However, before entering formal agreement, they want to view our source code to assess the quality of the code and whether it is able to be maintained etc. How do I protect my company's code (copyright) from being infringed and stolen?

• Answer:

  Tricky question.  The "legal" answer is to have them sign a non-disclosure agreement which specifically states that they are not allowed to use, implement or otherwise take the code.  This may or may not be enough.  The other protection would be to allow them to "see" it, but not have it.  Basically you could have them in your office and just show them the code.  This may even be too much if you are concerned that just them seeing it will give too much away.  In the end its all about negotiation and leverage.  If you have a strong enough position, you can probably get a deal without showing them too much.  If not, then you may need to take the risk and give them a peek.