In Dragons' Den, an entrepreneur asking for £100,000 for 20% is offering 20% of the company.
The percentage represents equity, meaning an ownership share in the business. In the example, the entrepreneur is proposing that an investor receive one-fifth of the company in return for the requested cash, subject to negotiation and due diligence.
This calculation also implies a £500,000 post-money valuation: £100,000 divided by 20% equals £500,000. The valuation is only the entrepreneur's opening position, not a guaranteed market value or proof that the business is worth that amount.
Viewers sometimes confuse equity with profit share, interest or a loan repayment. On Dragons' Den, an equity deal normally gives the Dragon an ownership stake, while the final percentage and investment amount may change during the pitch.