On the British television programme Dragon's Den, entrepreneurs generally offer equity in their business in exchange for investment.
Equity means an ownership share. During a pitch, an entrepreneur states how much money is wanted and what percentage of the company is being offered. The dragons then assess the valuation, commercial prospects and risks before making an offer, declining or negotiating different terms.
This arrangement is different from a conventional loan. A dragon who takes equity becomes a part-owner and may benefit if the company grows, but also faces the possibility that the investment will lose value. The entrepreneur receives capital but gives up part of the business and may gain an experienced commercial partner.
The exact terms shown on television can also be subject to due diligence after filming. A dramatic on-screen agreement is not necessarily a completed transaction, because financial, legal and operational checks still have to take place.