Entrepreneurs on the British programme Dragon's Den commonly offer investors equity in their businesses.
Equity means an ownership stake. In a typical pitch, an entrepreneur requests a sum of money and states the percentage of the company they are prepared to give in return. The Dragons then assess the proposed valuation, the business's sales and profits, its growth prospects and the entrepreneur's ability to execute the plan.
A Dragon may accept the proposed percentage, negotiate for a larger stake, make a joint offer with another Dragon or decline to invest. A television agreement is not automatically the same as a completed transaction, because due diligence and legal negotiations generally follow the on-screen pitch.
Equity is different from a loan. A lender normally seeks repayment and interest, while an equity investor shares ownership and may benefit if the company grows. Some deals can include additional terms, but ownership is the central concept.