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.
