Why was this even funded? It could have been a nice business if they built the app and sold it through the app store, it seemed to be making enough money to support the team (based on the fact if was highly ranked in the top grossing sections of the App Stores).
I understand why investors might want to get in but why would a company like this take investment? It seems like it would be pretty easy to bootstrap and build a sustainable business from. If they had given it away for free I could understand the need for investment but not when they were making money from the day it launched.
Maybe they perceived they could win more money by selling the assets the company, one of Sparrow guys came from Apple and Amazon so I really think this was the case, or maybe they perceived that at some point in the future a single software would not be sustainable at all, and since with app stores you cannot charge for upgrades this would be on their way, that's why the majority of OS X indies I know have a couple and not a single software selling at each time.
Who knows, ultimately it probably has to do with personal projects of theirs and I think it would be paternalistic to have a say in their lives.
There are people who really do not wish to have the lifestyle business life, it's not evil to seek more money as long as it's not something immoral that they're doing.
