I also offered them to invest in the new company and they want to do it. But they feel like getting some shares from my common on top would be only fair
Have there been any investments in your new venture? Anything that could help set a valuation? If you wanted to give* them equity, understand that it is an arms-length transaction on your balance sheet, not a freebie.
If you really want to, you could give them a 'goodwill' deal. No shares for free on top, but if they wanted to invest, they could invest on favorable (and quantifiably so) terms.
While this isn't legal advice, I don't believe you have any obligation to include your previous investors at all, much less provide them with favorable (or one-sided) investing terms, unless of course there were special terms dictated in whatever contract you previously had with them. If that is the case, definitely get in touch with an appropriate lawyer to keep yourself protected.
Most small-scale investors ($20k is small scale) usually can't afford to invest in start-ups that they are active founders in themselves and are usually bitter when the company fails because they don't see the failure as their fault (they didn't do anything after all).
Having said that, if they want to invest more in you, feel free to take their money... after all, they know what they're getting in to.
However, don't let personal guilt drive your decision to offer them more stock than is reasonable or make you feel obligated to give them something for nothing. Start ups fail all the time and, by the sounds of this second go around, it may have been no-ones fault that the first one failed - some ideas just don't work in practice.