The business valuation percentage entrepreneurs offer Dragons in exchange for investment on Dragon's Den is equity.
Equity means ownership in a company. When an entrepreneur asks for money for a stated percentage, the requested percentage represents the share of the business offered to the investor. For example, a request for £50,000 for 10% implies a post-money valuation of £500,000 if the deal is accepted on those terms.
Equity is not the same as revenue, interest or royalty. Revenue is money earned from sales, interest is a charge associated with borrowing, and a royalty is usually a payment linked to sales or usage. A Dragon may negotiate a different percentage, additional conditions or a combination of investment structures.
An on-screen agreement is commonly described as a deal, but the parties normally still conduct due diligence and negotiate legal documents afterward. The equity percentage is therefore the ownership concept at the centre of the pitch-room bargain.