This week's Dragons' Den had the usual mixture
of dashed hopes and shaky starts, pointless products and
question-time collapses - but it also offered up that rarest of
gems: a pitch that received offers from every Dragon. So let's skip
all the stuff we've seen before and fast-forward to Wesley and
Peter, founders of FGH Security.
The duo set up their security business after meeting at
Manchester's biggest club back in 2003, where they were both
bouncers. But both were far from the stereotype of surly,
pea-brained tough guys that people tend to expect when they meet
doormen. They were, as they put it themselves, 'a breat of fresh
air in the industry'. And they were very switched-on.
The business made £2.4m turnover in 2008/09 with £100,000 net
profit, and was on track to make £240,000 net profit next year
thanks to a handy contract with the NHS worth between £2m and £20m
per year. They also counted various county councils, fire services,
Subway and Revolutions Vodka bar chain among clients. They'd
recently acquired another business to get into the CCTV side of
things. And their ambition was 'to turn the business into a
domestic and commercial brand'. Not too shabby, then.
They presented well - calm and confident, but never cocky. They
were modest and likeable. And they knew their stuff inside out and
backwards. As Deborah put it when they left the den: "That to me
was a model pitch. They weren't pitch perfect, they were
honest."
The pair asked for £75,000 for 10%, and after only a couple of
questions James Caan offered precisely that in possibly the
quickest offer we've ever seen. Deborah Meaden followed soon after,
saying: "Often I'm looking for reasons to invest in a business
during the pitch. Half-way through yours, I'm finding it very
difficult to find reasons not to invest."
Duncan Bannatyne was next up, but he made the interesting point
that 10% wouldn't be enough to drive him, so offered £100,000 for
20%.
Theo Paphitis and Peter Jones latched onto this, and eventually
Wesley and Peter accepted a joint offer from both Dragons for
£100,000 for 20%, which would drop to 15% once the £100,000 had
been returned. Which worked out quite nicely for them, as Peter
Jones happened to own the number one business in the security
camera technology industry. (Though the offer was pretty rosy for
the Dragons too.)
So what exactly was it that made the Dragons all go gaga for FGH
Security? James Caan liked the 'sophistication' of the business,
citing its acquisition - a level of maturity rarely seen on our
screens in this programme. Others were impressed by the figures and
the pitch. Crucially, everyone really warmed to both Peter and
Wesley - which, as we saw last
week, counts for a huge amount. Modesty, likeability and a very
promising-looking business don't often go hand-in-hand in the den,
but when they do, the Dragons' can't resist it.
That's not to say a business should always aim to be all things
to all people, though. The other business that got investment this
week was Golfers' Mate, a tool that repaired damaged golf pitches.
The owner had to restart his pitch three times he was so nervous,
and got slated and rejected by all the Dragons (and a series of
jokey answers to their questions didn't help either). All the
Dragons but one - James Caan, whose love of golf enabled him to see
the potential in the product and seal the deal for £100,000 for
30%.
Key lesson there? It's not just about your pitch and product and
personality - it's about finding the right investor too. You can
rejected by loads before finding someone who sees a spark. So don't
give up hope first time round just because you can't be that rare
example that gains approval from everyone.
Read our feature on how to
find a business angel for more advice on finding investors that
suit your business.