He was talking about an equity stake in a start-up. Although on paper it is worth $2M, it is (probably) not liquid (i.e, the shares can't be traded easily, maybe at all.) The vast majority of founders don't literally spend $2M from their checking account to purchase their position in a start-up - they get some ownership as part of taking the start-up risk.
Is there some standard he/people use to come up with the initial company paper-stock worth? A 2m company I would imagine needs to have some tangible traction already.