I have always been curious to know what a company gets in return for investing in a startup company that makes a healthy profit while continuing to grow.
For example: Accel partners invested 12 million into the facebook project. We have all heard of that success story, but what I don’t know is what was negotiated when Accel partners gave them that money.
Given what was settled in the facebook/Accel contract, what should be an acceptable expectation if I am seeking from a venture capital firm? Does anyone know the answer for this?
I don't know about that specific deal, but in general an investor gets stock, i.e. a percentage share of the company. Of course, you can also negotiate favourable terms, etc.
I'd recommend Venture Deals by Brad Feld as it covers a whole lot of this stuff.
It was an investment. For their money, they get shares. From CNBC :
With its 10.7-percent stake in Facebook, Accel is the largest outsideBut this likely has no relevance to your situation - unless you have a "just less than 3 million users" product. How / when you raise capital has to do with the business need, your business model & the stage your company is at.
shareholder in the company. Not everyone at Accel was enthralled with
the idea of investing in a site that had less than 3 million users and
no clear revenue path. But that initial investment—now worth as much
as $6.6 billion—is looking like a pretty good deal.