In Dragon's Den, an entrepreneur usually offers equity in exchange for investment.
Equity means an ownership stake in the business. During a pitch, an entrepreneur normally states how much money is wanted and what percentage of the company is being offered. The Dragons then assess the implied valuation, the company's financial performance and whether their expertise could help it grow.
A Dragon may propose different terms from the original offer, including a larger percentage, a smaller investment or a joint deal with another Dragon. The entrepreneur can accept, reject or negotiate, and a televised agreement is still subject to due diligence before it becomes a completed investment.
Equity is not the same as a salary, rent or a patent. A salary is payment for work, rent is payment for use of property, and a patent protects an invention. In the programme's core investment format, the central exchange is capital for part ownership.