In the UK programme Dragons' Den, an entrepreneur usually offers equity in exchange for investment.
Equity means an ownership interest in a company. If a Dragon invests for equity, the investor receives an agreed percentage of the business rather than simply lending money at interest.
The percentage requested depends on the entrepreneur’s valuation, the amount of money sought and the Dragon’s view of the company’s prospects. A pitch can therefore lead to negotiation over both the cash and the shareholding. The offer shown on television is not always the final completed agreement.
Equity is different from a loan: a lender normally expects repayment, while an equity investor shares in the company’s potential gains and risks. Entrepreneurs may also discuss licensing, royalties or joint ventures, but equity is the programme’s standard investment language.