Last night's episode of Dragon' Den saw some truly brilliant and
utterly misguided entrepreneurs strut their stuff for the panel.
The Dragons were often divided, sometimes brutal but consistently
entertaining. Two investments were made and plenty of sage advice
was doled out to the hopefuls.
Kicking off with Allan Brown & Simon Jamieson's gift card
exchange, episode seven was a rollercoaster ride. Duncan Bannatyne,
courting controversy as always, called Gift Card Converter "a
fantastic idea" before announcing that it would never make money
and declaring himself 'out'. Deborah Meaden all but had her hand in
her pocket to hand over the £50,000 investment but Peter Jones'
stern pronouncement that the pair would not only fail but be
"completely destroyed" made her think twice.
As soon as gift card trading was labelled a "black market" and
the founders admitted they'd sought no legal advice on their
start-up, Meaden sat on her hands. Theo Paphitis, the last Dragon
standing, uttered some wise words to the entrepreneurs: "Not all
ideas are money-making ideas," he said as Brown and Jamieson
departed the Den.
When Letitia Valentine caught hyperthermia on a rambling holiday
with partner Alex Lewis, the pair came up with the idea for Surviva
Jak, a foil jacket that's lighter and four times more efficient
than a standard foil blanket. Again, a great idea... But the cracks
soon began to show. "There are 38 million ramblers in the UK," said
Valentine, drawing incredulous looks from the Dragons.
A bun fight ensued with each Dragon taking turns to lay in to
the hapless entrepreneurs for failing to back up their superficial
research figures. "You're obviously passionate about the product
but you're completely dysfunctional," said Peter Jones. Salvation
appeared in the form of Deborah Meaden, who offered the couple the
full £75,000 investment for 45 per cent of their company, proving
that a good idea can counteract incompetence after all. After a
cursory attempt to haggle, Valentine "graciously" accepted the
deal.
No such luck for Citidogs Crèche founders Sandy Maxwell Forbes
and Sarah McLean. Despite a brilliantly-executed pitch, their lack
of business acumen - "How can you fail to factor in VAT?" shouted
Duncan Bannatyne - saw the Dragons drop out one by one.
Neither Maxwell Forbes nor Mclean were taking a salary for their
12-week old business, prompting this comment from Peter Jones:
"Time and time again people make the massive mistake of thinking
they've got a great business when they don't pay themselves a
salary. Soon as you open your next one, you're dead in the water."
After Deborah Meaden pointed out that the business' economies of
scale would actually decrease as the pair roll out their dog crèche
business, all the Dragons are out. But at least Maxwell Forbes and
McLean leave with a whole lot of free advice.
And here comes the finale. The last entrepreneurs to climb the
steps to the Den were Chris Barnardo and Richard Blakesley,
founders of the Wand Company. As the company name suggests, the
pair were peddling magic - of sorts. The Kymera is a carved
wooden wand that can control everyday electrical objects, from
televisions to ceiling fans. There are no buttons or switches: the
Kymera responds to gestures. The Dragons were suitably impressed.
Blakesley and Barnardo were looking for £200,000 in return for a
ten per cent stake.
Bannatyne was the first to declare himself, offering the whole
amount for triple the equity. But he threw in a kicker, "If you
make £600,000 profit this year, I'll give you ten per cent back,"
he said. Then negotiations began in earnest. Each Dragon wanted a
slice of the pie: "You've had your offer from Voldemort over
there," said Peter Jones. "Now Hagrid's coming in." Jones undercut
Bannatyne's offer by five per cent. Theo offered a new ratchet,
settling for a 12 per cent stake if the Wand Company pulled in the
£1.2m profit anticipated by the founders. Deborah Meaden made a
canny bid: half the cash for ten per cent. "But that's not a good
offer," complained Bannatyne. "That's more equity than Theo's
offered." "They want two Dragons," came her reply.
In the end, the Scot entrepreneur won the day. His offer of
£200,000 for 30 per cent, reducing on a sliding scale all the way
down to 10 per cent dependent on £1.2 million profit sealed the
deal. As Bannatyne shook hands with his new business partners,
Jones conceded, "I think you'll do very well with them".
It was a brilliant piece of television, nail-biting to the end.
It was great to see a company with real potential not only receive
investment, but incite a genuine bidding war. With two more Harry
Potter films on the way, the market for the Kymera wand can only
increase. And the pair had done their homework, citing World of
Warcraft fans as another target demographic. You could practically
see all the Dragons hop out of their seats when a follow-up product
was mentioned. But it's all very hush hush - the patent is still
pending.
That concluded a fantastic spell in the Den for the Wand
Company. They left with all their cash, retaining 90 per cent of
their business. It makes you wonder if maybe the founders had a few
magical powers themselves. Their performance in the Den sure went
like a charm...
Written by Rebecca Burn-Callander