Winning investment isn’t always about offering one patented, niche, completely original idea. Often the wider talent and holistic opportunity an entrepreneur can offer is worth more than the single concept they initially proffer.
Never has this been truer than in this episode – the season finale – in the Den.
Take Michael Lee, whose request for £100,000 in return for 15% of his franchise model - a sandwich van selling ice cream – seemed horrendously far-fetched (particularly when Duncan Bannatyne, frozen dairy produce old-timer who built the foundations of his entrepreneurial empire by building up a flotilla of said iced snack vehicles, pointed out that an ice cream truck selling sandwiches would in fact be more consumer and sales-friendly).
But where the other Dragons declared themselves firmly out of this easy-to-replicate, non-lucrative business, Peter Jones made a shock offer. It wasn’t the ice-cream-come-sandwich van he was into – it was Michael’s longer-running business, his own snack truck which was separate from the franchise company and had been running for 12 years, bringing in a tidy £100,000 annual profit.
For a tenth of a million, Peter snappily secured 35% of both businesses, neatly protecting any risk on the franchise idea with the security of the regular income from Michael’s other business. (Although that’s not to say the other Dragons weren’t still slightly incredulous.)
The only other successful pitchers this week were David and Patti Bailey, who had developed high-spec computer mouses that looked and felt like luxury sports car miniatures. And they provoked plenty of positive interest among the five business magnates. Having sold 3,300 units at £29 within five months, with a 55% profit margin and an appealing £73,000 turnover in that time, not to mention a newly signed contract with an Italian supercar brand who wanted to collaborate on licensed products, it was seeming like a pretty darn attractive opportunity.
But in fact, again, it was the broader potential of the pair that finally convinced James Caan to open his wallet. Where the other Dragons felt the market just wasn’t quite big enough and the price point was a fraction too high, Caan was drawn to the extensive sales and marketing careers the husband and wife duo had behind them, and in particular the other business they were running separately, buying and selling property to generate capital. That, and the fact David had already invented a boat cleaning device which had had enough success for Theo to recognise it straight away.
Accordingly, Caan made an offer of £120,000 (£20,000 more than the amount they originally asked for for 20% in the mouse business), in return for 50% of their other business – on the condition that he could put other products he had invested in into it and they would sell and market them on his behalf. A carefully calculated deal indeed – and the Baileys liked it. After a bit of firm but polite negotiating, they managed to walk away still holding a 60% stake with James Caan on board for 40%.
And so we bid farewell to the Dragons until next season - but, luckily for all you inventors and business rising stars out there, that gives you just enough time to plough through the darkening winter months by developing the next business idea to set the Den alight. And with more money invested this season than ever before, things are looking brighter than ever for next time around.