On the other hand, if they'd focus on building their core product (an oven) while taking BigCompany's money, and without listening to the multitude of smaller requests from potential customers who might not even hand over a single cent, they might have eventually gotten somewhere.

I agree that being a "custom engineering contractor for BigCustomer" might not have been the ideal outcome, but at least the entire company would have gotten some expertise, and probably be able to pivot and finally build their own thing given more resources (*cough*moreVCfunding*cough*).