Based on this write-up, that seems short-sighted. It sounds like they've been given a mediocre valuation for an unfinished product that and it's worth more to them (and as they feel, the market) than they're being offered. It seems basically like a talent acquisition more than a tech acquisition, so they'd probably be stuck there contractually for a good long while, which is what they founded a company to avoid in the first place.
The author of the question says, "The money is fair enough..."
His question is one of control, not money. The OP wants to control his life and his product.
Truth is, products don't last forever. They require maintenance and support, marketing, infrastructure, pricing, and a whole lot of other things a few guys focused on development aren't thinking about right now.
A lot of cash in the pocket = a lot of time to think.
I'm not saying they should sell, I'm just saying that I don't understand why you are bringing money into it when money wasn't a factor for the author.
I can't wait to have that 9:15AM phone call again. First time it happened it was a shock. I was still in bed and I wasn't sure who was calling. I had to sit up slowly and pretend I was at my desk. The voice on the other end said they wanted me "in their team". I had to stall them until I collected my thoughts ..
Please happen again, O sweet anonymous phone call at 9:15AM :-)
I think the author of the question is young and excited and someone with influence has recognized their achievement. The team has probably never been in that situation before, so they've never seen how high one can get on such approval that evaporates tomorrow.
