&gt; That sounds not entirely ethical &#x2F; honest..<p>It isn&#x27;t, that&#x27;s simple. In any deal there are two main obligations for seller and buyer. For the seller to inform the buyer about any material things they are aware of affecting the item being sold (&#x27;duty to inform&#x27;) and for the buyer to look at the item being sold long and hard to see if there is anything they can find that will affect their judgment (&#x27;duty to research&#x27;).<p>So from an ethics and an honesty perspective you&#x27;re 100% right, and from a legal perspective you are <i>also</i> right but that&#x27;s where it gets hairy. Because the &#x27;duty to inform&#x27; is not specified in enough detail to make that duty an explicit thing without wiggle room these cases (where a seller should have been aware of a defect but did not disclose it) usually end up in front of a judge and it is definitely not an open-and-shut thing that every such case is ruled in favor of the party filing the complaint. It&#x27;s one thing to state that a seller should have been aware of something but quite another to prove that they actually were aware of something.<p>I&#x27;ve seen a deal or two where the seller was &#x27;glad to be rid of &#x27;x&#x27;&#x27; where you&#x27;d expect them to be perfectly aware of the situation and where the buyer did their DD and were totally happy with what they bought. So sometimes it is simply a matter of perspective and the supposed defects are simply not as relevant to the buyer as they were to the seller. But as a seller I&#x27;d rather err on the side of caution and inform the buyer even if that sometimes would mean a deal would not go through.<p>You can bet that after this remark any exits from a16z will be looked at just a little bit more carefully, if that is even at all possible. Most deals at this level go through a very thorough process making it fairly rare that a thing such as &#x27;growth is stopping or about to stop&#x27; would slip through the cracks and I&#x27;m kind of surprised that a16z is of the opinion that a seller would be able to get away with this kind of trick without either risking the buyer figuring it out in time. That would have to be a fairly in-experienced buyer.