In the British television format Dragon's Den, investors usually receive a company stake for providing business capital.
A company stake is an ownership interest, commonly expressed as a percentage of the business. For example, an entrepreneur may request a specified sum while offering a stated percentage, allowing viewers to calculate the valuation implied by the proposal.
This arrangement makes the negotiation more complex than simply asking whether a product is good. The Dragon must judge the business opportunity, the requested valuation, the founder's role and the potential return, while the entrepreneur must decide how much ownership to give up.
An on-air agreement can still be subject to later checks. Legal documents, financial records and other due-diligence findings may affect the final terms. Consequently, the stake announced in the studio is not always the stake ultimately transferred.