In the British Dragons' Den format, investors generally receive equity in exchange for funding a business.
Equity means an ownership stake in the company. A pitcher proposes an amount of money and a percentage of ownership, and a Dragon may accept, reject or negotiate those terms. If a deal is completed, the investor's return can come from the company's future value or profits.
This arrangement distinguishes an equity investment from a conventional loan. A lender normally expects repayment with interest, while an equity investor shares the business's potential upside and risk. The programme's dramatic negotiations often centre on how much ownership a Dragon should receive.
A televised handshake is not necessarily the final legal transaction. After filming, the parties may carry out due diligence and negotiate definitive documents. That process can change or prevent a deal, but the fundamental exchange presented on the programme is funding for an ownership stake.