The researchers and producers of Dragons’ Den seem to have picked their act up a bit for series seven, the first episode of which aired last night. Despite a melodramatic opening that sees Theo Paphitis, Deborah Meaden, Peter Jones, Duncan Bannatyne and James Caan standing outside some disused factory in sepia tone with heat waves coming off them, looking like they’re waiting to protect their gang headquarters from an AK47-touting Vin Diesel, the pitches have actually become a lot more convincing. So much so, in fact, that there was a lot more negotiating being done in this episode than we remember in any of last season’s.
There were, of course, the inevitable wrinkle helmets, elasticised cat collars and smutty books. Not to mention yet another case study of the painfully obvious business lesson that regularly features in the den: know your numbers (which went something like this for wannabe horror attraction business Apocalypse -
Duncan: So I invest £200,000 [for a 20% stake], what’s my return on investment?
Pitcher: We’re looking at £1m in three years.
Duncan: For what? Turnover? Profit?
Pitcher: Err... profit?
Duncan: So for one million pounds, my 20% stake would get me...
Pitcher: Err... 20% of £1m, that’s... err... that’s... umm... that’s £200,000! [looking pleased with himself for grasping the arithmetic]
Duncan: £200,000 return after three years, having invested £200,000. Not the best deal for me, is it!)
But in among the groans and eye-rolling came some really quite innovative products and interesting people – and some deal-making.
Aviation-lover and inventor Rupert seemed like just another flustered odd-ball with his hang glider pedal-powered accelerator (neatly demonstrated by a friend in a gigantic canvas cocoon suspended from an empty hammock frame with flippers sticking out), and he raised a good few chuckles from the Dragons. But only because he neglected to mention in his pitch that he’d started flying hang gliders solo aged 13, designed the most advanced hang glider in the world aged 17, and ran a palm tree business, a property company, oh and a roofing business to tide him over in the winter months when the aviation business didn’t fare so well, alongside his design work for new types of aircraft.
He had the last laugh when James Caan shook on an £80,000 deal with him, offering to house all his ideas and take 49% in any that took off. The moral of the story? Don’t overlook the incredible influence relevant career experience and achievements have on the picture investors form of you.
The next man up had a very impressive product, and pitched very well. Explaining his commercial and domestic outdoor heaters, he calmly ticked all the right boxes a new product should: better than what’s already out there, saves the user money, 50% less carbon emissions than current versions of the same thing, very carefully considered safety functions (it cuts out if knocked over, it stays cool enough to touch and so on) – it even gave commercial users a screen for adverts.
But sadly he destroyed all his hard work by refusing to share key financial information with his potential investors. “If you don’t open up and build rapport and a relationship, nobody is going to invest you,” Peter explained. Despite that, and after fessing up on his figures, James and Peter did eventually make him an offer, on the strength of his product – only for the entrepreneurial hopeful to reject it as he wasn’t ready to give up 50%.
But there was light at the end of the tunnel for the Dragons, as Steve Smith showcased his annoying-caller blocker Truecall. Steve’s past history of building and selling successful companies, his grounded and thoroughly thought out sales forecasts, existing sales history and orders and his confident but not showy pitch won him a deal with telecoms doyenne Peter – but not before all the Dragons fought over him and he politely negotiated Peter down onto his terms for equity. As Evan Davies put it, “You definitely slayed the Dragons.”
Which just goes to show that with the right mix of innovative product, thought out business plan, evidence of sales and modest but assured personality, it is possible to get even the most discerning and over-worked investors truly excited about what you’re doing.