Somebody please correct me, because it sounds like they're saying a $40m investment got them to a $1b valuation, which would mean the investors (Sequoia, Blackbird and Felicis) got 4% between them? Why would they take such little equity?
In the article the cofounder says it was "an offer we couldn't refuse". I guess she meant in a "You'll give us _how_ much for less than 5%??? You're joking? No? DONE!" way, rather than a "Nice business you've got here, it'd be a pity if anything happened to it." or a "We know where your children go to school" kind of way...
If that's all correct, it's because it was what they could get for now. It'd likely be just to wet their beak, get an inside track, form a relationship, and they're looking to get more in future rounds. Sometimes companies that aren't desperate for outside funding will do a slower walk-up on partnerships with VCs, which I think can make a lot of sense if you have the luxury to do it.
