What does an entrepreneur generally offer a Dragon's Den investor in exchange for funding?

An entrepreneur generally offers a Dragon's Den investor equity in the business in exchange for funding.

Equity means an ownership stake. When a founder offers a percentage of a company, the investor receives a claim on that portion of the business, including a potential share of its future value. The percentage requested is central to the negotiation because it helps determine the implied valuation of the company.

A pitch therefore involves more than asking for cash. Founders must explain how much money they want, what percentage they are willing to give up and how the investment will help the business grow. The dragons then assess the product, sales, costs, management and proposed valuation.

Equity is not the same as a salary or a grant. A salary pays for work, while a grant normally does not require the recipient to surrender ownership. A loan is also different because it is generally repaid under agreed terms rather than exchanged for a permanent ownership stake.