We'd need much clearer specifics to give good advice, but generally I'd avoid getting aggressive. It's unlikely that you have much (if any) legal claim, so the primary benefit you can get is to build some social capital with their investors.

> How should I respond? Is this common practice?

It is extremely common practice to use open source software in building a company, but most startups will acknowledge they didn't write all the code themselves. That being said, some certainly do gloss over the exact authorship (especially since some business people still don't understand open source).

Also, there's a huge difference between them selling literally your code as their own and them using your code to build a business you hadn't thought of.

Either way, your best bet is to respond diplomatically to the investors. If you play your cards right (don't be aggressive, but do be clear that you wrote the IP), you could easily spin this into:

1) Money for an additional "license" (essentially, money to keep you from harassing them)

2) Investment in your own startup. The fact that people are successfully raising money on software you wrote speaks volumes to your potential market.