Companies can easily add a representation to their seed docs to prevent this or at least force disclosure. The ethical and legal questions are around exactly how the scout/angel presents the investment, how the rights work, how the agreements are written, etc.
Says Nick Mehta, another one of the first scouts, “They
definitely left it open to us but told us to think about the
impact on the entrepreneur. We were told we should tell the
entrepreneur. But they told us to make sure the entrepreneur
thinks about it before they broadcast that Sequoia is an
investor because of the signaling effect if Sequoia didn’t
invest later on.”Could you please elaborate on this point?
Representations are great. Anytime you are negotiating a deal, and the other side makes some crucial claim that persuades you to accept the offer (for example, "all of our other partners agreed to this term!"), just insert that claim as a representation of theirs and watch if they squirm.