I doubt you'll ever get an answer as to why the board would allow this to happen, but my guess would be that they were stuck between a rock and a hard place. Perhaps they had to forego a traditional VC investment because their last-round valuation was too high and the existing investors were not willing to either put up more money, or get diluted by raising money at a lower valuation. Second theory would be that they tried to raise a new round and simply had no takers, leading them to the corporate fund raise.

So it may not be as simple as eggs in one baset.