In Dragon's Den, an entrepreneur asking for £50,000 for 10% is offering 10% of the company.
The percentage is the equity stake requested by the entrepreneur in exchange for investment. In this example, the implied valuation is £500,000, because £50,000 represents one tenth of the business. The calculation is £50,000 divided by 0.10.
This valuation is the starting point for negotiation. A Dragon may offer the full amount for a larger share, offer less money, or decline entirely. The final ownership percentage can therefore differ from the entrepreneur's opening proposal.
A frequent mistake is to treat the cash amount as the percentage or to calculate the implied valuation as £5 million. Ten percent means one tenth, so £50,000 for 10% implies £500,000 before any negotiated change.