Collecting the best books mentioned on hacker news, reddit and other places
The investors in VC funds are called Limited Partners (LPs), as opposed to General Partners (GPs). LPs raise money from high-net worth individuals (HNWIs), funds of funds, etc.
Maybe what you read had some qualifier attached to it like across all VC funds "on average". With funds, the outliers are everything like with successful startups. Deal flow varies greatly by VC. A similar comment, and one that holds up, is that most startup accelerators have 0 "successful" exits.
Brad Feld's book Venture Deals  is a great reference if you want to learn a bit more from multiple perspectives.
May I recommend anyone wishing to understand more about valuation read the book Venture Deals?
The subtitle is tongue in cheek but also gives you a sense of how much you can learn and how rare company you are in once you understand the details.
These books on the subject of term sheets are solid
For those interested in this topic, I suggest reading 'Venture Deals' by Brad Feld. While it's broader than this topic, it does cover some of the legal/technical elements of vc funding and exits, which help when trying to understand outcomes such as this (i.e., preferred vs common shares, etc).
Venture Deals by Brad Feld and Jason Mendelson: http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis...
Why do you want investors should be your first question. Raising money means dilution and being put on a vesting schedule along with having to deal with liquidation preferences or headaches of convertible debt (see this book to understand some of these terms). Second, finding investors usually takes connections. For young CS grads, easiest way would be through the university's tech commercialization office. Another would be an accelerator or incubator. Then you could reach out to mutual connections in your network to find angel investors or seed funds. Hope that helps. If you need more help feel free to contact me (my email is in my profile). Good luck!
Perhaps not exactly what you are looking for, but a very good read on the subject is "Venture Deals" (http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis...).
If you want to know exactly what rights your shares have (and don't have), this is the book.
By no means is that complete, but that should give you a primer, and I learned about it from other startups that successfully have raised funds. (I was in the dark too at a point. https://news.ycombinator.com/item?id=4064276)
The other big thing is just to get out and talk with other founders near you. I found (at least in our community) they were very willing to share information over a beer or soda.
The a16z website shows the current portfolio (most recent, un-exited investment) and does not display their entire investment history. If you check out their Crunchbase profile, they have already had some big exits with Groupon, Zynga, Skype and Instagram, which is quite impressive since they only started investing 3 years ago. I'm sure there have been some other medium/large M&A liquidity events as well but it usually takes 3-5 years to figure out if your VC portfolio is any good and 7+ years to realize any returns. LPs know this and funds usually have a 10 year life cycle, sometimes with options to extend it a year or two .
>to ask for? Is there an "idiots guide" to equity?
Not exactly, but I'd recommend reading http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis... because I think it will help despite being focusing more on founder vs investor rather than employee asking for equity.
Not sure if you meant a book on the web but I liked Venture Deals - http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis...
Rookie mistake. Read Venture Deals: http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis...
I liked Venture Deals: Be Smarter than your Lawyer and VC.
Amazon affiliate link: http://www.amazon.com/gp/product/1118443616/ref=as_li_ss_tl?...
Amazon non-affiliate link: http://www.amazon.com/Venture-Deals-Smarter-Lawyer-Capitalis...
(Choose whichever you prefer.)
The really short version is that the company sells (probably newly created) shared in exchange for money. The owners of the company are generally not selling their own shares. That would lead to serious complexity.
If you want to know more, read Venture Deals. It's very thorough and well written.