Dragons' Den: episode two, reviewed

Last night's Dragons' Den was something of an Alice in Wonderland episode, with much conventional Dragon wisdom turned on its head. The inventions with all the hallmarks the fiery ones usually love - unique and new, grabbing onto technology, cleverly capitalising on big future growth markets, applications for a wide range of markets - got (spoiler alert) rejected from the den. And then, in a suitably Lewis-Carroll-esque twist, the one business that did get funding was one that by all accounts felt and looked like a lifestyle business -  precisely the kind of business the Dragons usually trounce as an investment opportunity because there's just not enough return in it for them.

But things are not always as they first seem in the Den.

Take the first business to get flame-grilled, for example. Subeo makes miniature submarine pods. The founders are both engineers and they also have a McClaren aerodynamics engineer on their team - a professor, no less. Their 'Aquarius 50' pod has uses for the tourist industry (it can get much deeper than any scuba diver could dream of), the marine research industry, the fish-farming and industrial marine industry, and has possible military applications too. They're offering the Dragons a meaty 45% of their business - rather foolishly, one might think, as this would very easily tip over the 50% mark once the investors started bargaining, which means they would lose control over the business. But that's certainly the kind of lucrative chunk that would entice a heavyweight investor. And then there's the fun factor - the pods are, as Peter Jones puts it, 'every little boy's dream'.

So: expert team, use in multiple markets, good equity stake, fun product to be involved with - check, check, check and check again. What, then, went wrong for Subeo? Because, if you haven't guessed already, they did indeed get rejected.

It all came down to financials - as James Caan, said, they 'didn't actually know what they're talking about' when it came to anything numerical. Subeo were asking for a not insignificant £1.45m, but would only be making £220,000 on each £595,000 craft sale. Which doesn't sound too bad, except by the time you've accounted for expenditure so far on building prototypes, and taken off the investment, and that the team were planning on selling nothing for their first two years then only four craft per year in their third and fourth year - well, upshot is you only make £350,000 in four years.

That's the figure Duncan came to anyway - though it provoked one of the best inter-Dragon spats ever to grace our screens as the others contested he'd done his sums all wrong,  and would actually make much more. However they did their working though, it still wasn't enough - and the Dragons had to put a serious dampener on the sub-aquatic business' hopes.

Shopbox, a refrigerated storage compartment for supermarket food deliveries that would keep your delivery fresh for whenever you got home, initially seemed even more promising than Subeo. The only way is up for the food delivery market, and as consumers get busier and busier (apparently 90% of households are empty during the day), a device like this looked set to become the lifeblood of Ocado-alikes everywhere. At £2.99 a week rental to the supermarket, the price point sounded pretty delectable too. The Dragons could all see the potential.

Bolt on to that an uber-valuable patent that covered not just a specific device but the whole concept of a secure, portable refrigerated food-storage unit (meaning they could monopolise the market - much to Duncan's incredulity as he refuted it and declared he was out perhaps too hastily) - and you've got one heck of a proposal.

But Shopbox fell down in a number of small but crucial ways. First, Theo picked up on the fact that a 'mischievous' child could lock another kid inside the box, and they wouldn't be able to get out. "You just can't put a product like that in a public place," he pointed out wisely. Then, in one of the most unprofessional snipes we've ever seen in the Den, one of the business owners had a dig at Theo's unprivileged background - which, even if he didn't mean it to sound quite so snobby, was a fatal error. All the Dragons bar Peter dropped out pretty rapidly after that - after all, who's going to risk going into business with someone who might come out with a totally inappropriate comment in any given situation?

Then there was the cash-burn worry. Shopbox had already rushed through almost £1m of cash. Despite that, Peter got drawn in by the patent - but then duly put off but the pair's reluctance to tell him what mysterious 'other high-profile investors' are paying for their stake in the business. Their flagrant obstinacy put off the last of the Dragons, and they're out.

Which brings us to the one business that did win the hearts of the Dragons - and investment from Theo and Deborah. And, most unusually, it didn't look set to grow into anything particularly massive and profit-growing. Angela was running a vintage cafe and events business - it organised 40's teaparties and dances and the like, and offered plenty of customised cute little gift items (perfect for day-to-day revenue).

She wanted £100,000 to rent a shopfront in West London. But she didn't know how long the lease was for, stumbled over her figures, and had seemingly vastly underestimated many of her costs - which would normally all be more than enough to put the Dragons off.

But there was something about Angela that just seemed to shine through and make them love her. She had bags of character, truly loved what she was doing - and then she suddenly revealed half-way through questioning that she was actually a chartered accountant and had loads of experience helping her parents in the retail and leisure industries. True to the nature of this topsy-turvy episode, these are exactly the selling points you'd expect a canny entrepreneur to open their pitch with - but Angela seemed to have missed that lesson.

No matter, because she'd won over Deborah and Theo. Which was quite peculiar really, because after Angela left the den, beaming broadly, Deborah said she thought there would only ever be one outlet - which obviously won't exactly rake in the millions for them as investors in years to come.

But it just goes to show how much personality counts for when you pitch. It doesn't matter how incredible your idea is - if you're rude and closed and arrogant, you won't get anywhere (that's you, Shopbox founders). Whereas genuine niceness and passion can, on very rare and magical occasions, count for even more in the mind of an investor than exactly how much profit you're going to make them - providing, of course, that it is coupled with a reasonable amount of business sense.