How should we protect confidential information before funding round?

Why not split the information into 2 categories, general plus detail where you make the fine data available for the due-diligence phase once a memorandum has been signed. The summaries would need to be carefully screened for trade secrets, potential patents or commercial-in-confidence commercial dealings. But your best bet is to ask around who are reputable funders. The VC industry is not that large that a bad actor can get away with stealing ideas for in-house dev-teams on a regular basis. Note that you have to accept that with so many me-too ideas, just because they pass on your startup doesn't mean they can't pick another team in closely related sector. It all comes down to pattern matching when punting on early stage ideas. Everyone in the world has access to a similar tech base, the market data (at least in the developed OECD) is public so the differentiating factor is the ability of the founders to execute as demonstrated by traction and degree of fit/comfort with the investment portfolio. Like any race/competition, there are simply some who just perform better.