Struggling to find funding and growth capital for his unique market offering, owner and co-founder of Hungryhouse, Shane Lake, decided to take a risk. Shane put his business’ name on the line by appearing on the popular television show, “Dragons’ Den,” in an effort to gain investor support. It was a risk Shane felt he had to take, and it paid off in a huge way, even if the original plan never came to fruition. Now with Hungryhouse an established business and those early days of funding are an unforgettable memory. Here, Shane talks about the challenges and risks he faced with the start-up of Hungryhouse and tells us his tips for success.
Hungryhouse covered a few small parts of London and we were growing our customer base very slowly through word-of-mouth. We concentrated on recruiting restaurants, ringing customer orders through directly, typing menus and flyering. Basically, we performed every function of the business ourselves.
We were desperate for funding and had already spent a lot of time trying to raise finance without any success.
We applied to Dragons' Den in early 2007 as just another finance-seeking channel. We'd actually applied to the show in 2006 and got through to the interview stage before being rejected, as our business was too young. The second time around, we were fully prepared. We even took presentation skills training and spent hours perfecting our pitch, including memorising all of our key facts and figures.
This time our preparation paid off. After a gruelling 90 minutes in the Den, we shook hands on a deal with Duncan Bannatyne and James Caan.
After our appearance on the show in November 2007, we were bombarded with restaurants wanting to join. Customers complained that we didn't cover their part of the UK and investors wanted to know if we still needed cash.
We didn't see an immediate surge in orders because we weren't nationwide at that point, but the Hungryhouse name was planted in the minds of avid Dragons' Den watchers across the UK. Thanks to our appearance on the show, orders and the number of partner restaurants doubled within six months.
The biggest benefit, however, was the fact we finally managed to raise the cash we so desperately needed to scale up the business. In the end, it didn't come from the Dragons, as James Caan (and his advisors) weren't convinced we could sign up the restaurants at the speed we proposed.
Two angel investors came on board and invested more cash for less equity than the deal previously agreed with the Dragons. At that point, we could finally afford to start hiring staff and do some marketing.
Appearing on the show was never going to be a risk; as they say, “all publicity is good publicity”! However, agreeing to give away 50% of your business for £100,000 was a huge risk.
We had to believe that these two wealthy, well-connected investors could add enough value to allow us to look back on that deal with positivity, rather than regret. I guess we'll never know.
Having grown the company to where it is now, with 100 staff generating upwards of £100m a year for the UK takeaway industry, we're very happy with how things have turned out and would like to think we're on that coveted Dragons' Den list—"the ones that got away."
In business, you can create your own luck with a combination of dedication, commitment and blind faith. If you work hard enough at something and never doubt yourself, events which might seem like pure luck to outsiders, are in fact the result of sheer hard graft.
Working hard doesn't necessarily guarantee success, but success can very rarely be achieved without working hard (and with the occasional lucky break!).