All investors aren't equal, and Finix likely had a few term sheets and picked Sequoia over other VC firms. So it would be a bait-and-switch, even if unplanned. Wouldn't you want control over who owns you? VCs with equity, even without a board seat, still have a good amount of control or access to information.

Plus, if it was at a discount, it immediately makes the stock feel "cheap". Doesn't matter what the reasoning is, it'll just feel devalued to everyone involved.

What control can't be abdicated? Like, why can't it just be a contract that says "this new VC firm gets x% of stock (and so x% of future dividends), but the stock has no voting rights"?

(It doesn't make much sense to me that selling under these circumstances makes the stock feel cheap while throwing the stock in the trash bin doesn't. But I'll take your word on the psychology.)