Entrepreneurs on the UK television show Dragon's Den usually offer investors an equity stake in exchange for funding.
Equity means ownership of part of a company. During a pitch, an entrepreneur normally states how much money is wanted and what percentage of the business is being offered. The dragons then assess the proposal, including the company's valuation, sales, margins, market and growth prospects.
A dragon's offer is not automatically an investment. The parties may negotiate the amount of money and the percentage of ownership, and a deal shown on television may still be subject to due diligence and legal completion. An on-screen agreement is therefore not identical to cash immediately changing hands.
The programme is built around this ownership negotiation, rather than contestants simply winning a prize. That is why valuation and dilution are recurring subjects in the den.