I don't think one should speculate about what the outcome would be if you had done something differently. Instead, it's best to determine what you are going to do next time which is different from the last time.
This is very excellent advice.
What could an investor or board have done to have gotten you to agree with this back then? Offered $5-10mm cash off the table in another round?
No clue. Our potential series B was smaller than that, so it wouldn't have been possible.
Then how does one identify the right time to sell, or rather whether or not to sell?
Can you elaborate?
He sold a vibrant, viable business to...yahoo. Enough said.
Can you elaborate on viable?
Is there many bookmark websites that are making the cut nowadays?
Given that it had pretty good traction as a bookmark site (and certainly wasn't the only project joshu had developed...actually several of the others were more interesting), it's very reasonable to believe it would have evolved into something different from what it was when sold. At Yahoo, it stagnated, just like every other acquisition Yahoo has made (Flickr is probably the most similar).