It's a lot of prestige to win the cup, and for your fans the cup is just as important as the league. The cup is also a good opportunity to make some extra money. The big money is in the crowd revenue, so just advancing a few rounds can be a real bargain if you play in a lower division.
Not all teams are able to participate in the cup though. The number of teams accepted into the cup ranges from the 128 best ranked teams to the 32,768 best ranked teams, depending on how big the league is. For example, in a league with 680 teams, 512 will play in the cup. In a league with 10,920 teams, 8192 will play in the cup.
The cup is always played midweek, see the league details for the exact time in your league. The first round always takes place the week before the first league game of the season. Your opponent is announced one week in advance, for the next rounds your opponent is announced shortly after all matches for the current cup round have ended.
The highest-ranked teams are always seeded to meet the lowest-ranked teams, and the higher-ranked team always plays away (a neutral ground is used in the semifinals and final). Teams are first ranked by the division they will play in this season, then ranked within a particular division as follows:
1. Active demoted teams
2. Active teams that neither demoted nor promoted
3. Teams that promoted by their own strength
4. Teams that promoted for "free" (replacing a demoted bot)
5. Bots, in case of vacant spots
Teams within each group above are sorted according to the ranking at the end of the last season. The ranking stays the same for the duration of the cup.
All cup games not settled during normal time go to extra time, where they may be decided by a golden goal (first goal wins). If they are not decided then, they go to a penalty shoot-out. For more information on how to select your penalty takers, see the chapter "Lineup: Experience and confusion".
The home side gets 2/3 of the crowd revenue and the away side gets 1/3. In the semi-finals and final the teams split the revenue 50/50. In general, fans aren't very interested in the first couple of rounds of the cup, but their interest will increase as it goes on.
It's also true that the fans of a lower division team will want to see a game against a higher division side, but that is not true the other way around.
The best teams in the cup also get some prize money. The cup winner gets 533 333 £, the runner-up gets 266 667 £ and the two losing semi-finalists each get 133 333 £. The losing quarter-finalists each get 66 667 £ and the losing last-sixteen teams each get 33 333 £. There is no top scorer award for the cup.