Episode 5 Dragons' Den

Tonight on Dragons' Den...

You're expecting to run this business

on ?54,000 of overheads including marketing?

It's not going to work.

Wow, David, you're in a tough situation.

The conversation is not for later, the conversation is now.

I'm not prepared to do that today.

Pardon? That's not the right answer. That's not the right answer?

I'm, kind of, aligned with you and you're very good.

This is a business I could get very passionate about.

So, I'm going to add a bit of spice to it.

Welcome to Dragons' Den,

the place where entrepreneurs get just one chance

to impress five industry big hitters

who have the money and the power to change their lives.

First to face the Dragons are transatlantic duo

Tom Bell and Craig Bailey,

with an invention they claim will revolutionise takeaway hot drinks.

Don't forget to breathe.

UK-based Tom is hoping he won't get a roasting from the Dragons.

For me, going into the Den right now is just a part of this crazy journey

that I'm on.

I'm just holding on with my fingernails.

Hi. My name is Tom.

And this is FoamAroma.

We're here today to ask you for an ?80,000 investment

in exchange for 15% of our business, FoamAroma UK Ltd.

In 2015, Britain spent ?7.9 billion in coffee shops,

using approximately 2.5 billion lids like this.

For many of us, this lid design is poor.

Why? Because the drink hole and the vent holes are too small,

stopping you from smelling your coffee,

reducing the flavour and the flow.

Our lid, in comparison - FoamAroma,

is designed to give you a better on-the-go drinking experience.

Hi, I'm Craig, inventor of the FoamAroma lid.

In 2007, I had my very first cappuccino.

Open ceramic cup - it was an amazing experience for me.

The next day, I wanted to do that same thing.

So, I go back to the same shop,

I order the same drink, but I had to go paper cup and a lid.

It was terrible.

That disappointment inspired me to create a lid

that gives you that sensory experience.

The very first version of FoamAroma was this.

And then, four years after this,

I had prototypes which I introduced at a coffee trade show,

and that's where I met Tom.

Since 2013, through my existing company,

I have sold 3.5 millions lids,

2.4 million of those lids have been sold in the last 12 months.

Our current sales were ?55,000 last year at a gross margin of 30%.

Your money and time will be used for marketing and development

and reduction of our production costs.

Thank you very much, Dragons, for listening to our pitch.

We would love you to try a hot drink and try a FoamAroma lid.

A pitch without froth from Tom Bell and Craig Bailey.

With its larger holes,

their unique coffee lid claims to offer both easier drinking

and an enhanced aroma.

One Americano.

The entrepreneurs are looking for ?80,000 in return

for 15% of the coffee lid distribution business.

Food and drinks guru Sarah Willingham has

a nose for these things.

Will this invention win her over?

I have an issue with the product, if I'm being completely honest.

That is that fundamentally this is about smelling coffee

as you drink it.

But the majority of coffees that are sold in the UK are sold with milk.

Actually, when you add milk to coffee

the aroma disappears, because the smell comes from the moment

the bean is ground and it only stays there if

it is kept in its original form.

It's a nice little marketing tool

and a nice little story to tell people,

but the reality is it doesn't actually improve

my coffee-drinking experience and I'm a big coffee drinker.

How is your feel around the mouth?

Are you relaxed in your jaw?

A kind of tension free?

The tension in my jaw was no different drinking from this lid

then drinking from every other lid I've ever drunk from.

Surely not the response the coffee-lid creators had hoped for

from the discerning foodie Dragon.

But tech and telecoms giant, Peter Jones,

is more interested in their sales figures

than their quest for taste perfection.

I'm going to have to get more into the business here, because,

on the surface, a lid with, exactly as you described,

a pen hole in the top of it,

is strangely not doing it for me at the moment.

But you have sold 2.4 million in the last 12 months.

Yes.

So, that's not bad. What's your business, Tom?

Do you sell cups and lids already?

I sell packaging products to retailers of both

delicatessens and coffee shops.

OK, and the size of that 2.4 million.

What does that mean in revenue terms?

2.4 million is ?55,000 revenue.

So, about ?1,000 a week in terms of sales.

And, Craig, how do you make money?

I sell to about 13 distributers in America and then I export to Tom.

OK, this is getting complicated.

Who owns this company? We own FoamAroma UK...

70-30.

FoamAroma Worldwide, who owns that?

I do. Great.

The pitch that you're asking for today

is on FoamAroma Worldwide, yeah?

FoamAroma UK Ltd, which includes the whole of the UK, whole of Europe,

greater economic region of Europe, Russia...

OK, why are we not being offered a piece of the whole?

Well, I hope this is a positive experience

with this company

and that we would have that conversation down the road.

No, no, I want to have that conversation today.

That's not on the table. Why?

If you're pitching this business, which is what your pitch was,

and then you're going to say, "Oh, by the way,

"it's just the UK and Europe in terms of distribution,"

that's not very attractive.

I am not prepared to do that today.

Despite a grilling from Peter Jones, the inventor is holding his ground.

And Deborah Meaden is next to test out Craig's resolve,

turning the spotlight on to his design.

Craig, Tom, you have your patent?

Yes, I do. Which is the patentable step?

The whole three-dimensional design and form of that lid is patented.

So, the whole thing? Yes.

But what makes a patent valuable is when it's difficult to overcome it.

I'd be amazed if I couldn't come up with something very similar.

I could flatten it off,

I could move two holes, so I get independent flavours

in each nostril, which I think is a really, really good idea.

I just worry that the valuable bit, which is what you're relying on -

that you've got a valuable something here -

actually is not that valuable.

With fermenting discomfort about the lids legitimacy

and if it can be protected,

Peter Jones turns up the heat another notch.

I go back to the attractiveness of this deal.

You're currently selling ?1,000 worth of this product a week

at a 30% margin. That's ?300 per week.

Yes.

You are asking for ?80,000

and you're valuing your company at nearly ?500,000.

You need to use the hole in this and smell it?

I do every day.

Well, you need to wake up, then, because this isn't working

at the moment financially for me as an offer.

Peter Jones clearly needs some convincing

on the coffee lid's potential to make a good enough return

on his investment.

And now, Nick Jenkins also has doubts

about the transatlantic duo's business proposition.

I don't think this really makes much sense

from an investment point of view.

It's not really very attractive for a number of reasons.

One, you already have another business,

so you're not 100% dedicated to this new business.

Secondly, we don't own the intellectual property.

I just think you'd be better off doing this yourself.

I don't really see why you're trying to raise money.

So, it makes no sense from my perspective to invest in this,

so I'm out.

Can I tell you where I am?

I actually couldn't have put it better than that.

I think that was a wonderful explanation

why it's virtually uninvestable.

I won't be investing either.

I'm out.

That speedy double shot has left the entrepreneurs reeling.

But distribution and retail magnate Touker Suleyman isn't ready to ditch

the deal just yet.

Craig, I'm going to give you a chance to rethink what Peter said.

Are you willing to put the patent

and the US business in with this one to create one business

which may encourage the remaining Dragons to invest?

As I said, I'm open for that conversation...

The conversation is not for later, the conversation is now.

So, I'm asking you a direct question.

I'll give you one last chance.

You know my answer. Yeah.

I'm not prepared to do that today...

No. Pardon? That's not the right answer.

That's not the right answer?

The answer is, yes, you will consider it

and you will strike a deal if we want a deal.

Be strong.

Be strong, it's the right thing to do.

He's an inventor, he needs a little push.

It's the right thing to do.

Yes.

Craig? Yes.

Craig? Yes.

I think you've just made this a little bit more interesting.

It's a dramatic turnaround in the Den.

Will Sarah Willingham be more tempted to invest

now that the US company is finally on the table?

Is the reason why your turnover's only 55,000 in the UK,

despite the enormous size of the market...

I'm sorry to say this,

but is it because it doesn't actually make that much difference?

We get an enormous amount of feedback from people

who try the lid.

I've come to realise people love to be able

to taste their coffee properly as they would in store.

The problem is that your numbers don't reflect that.

We've got a really strong coffee culture here in the UK

and if you can't sell the product here...

It's basically down to I haven't marketed really, or advertised.

I've done a couple of trade shows and that's about... That's...

I think the fact that you've been trying to sell it

for two or three years in the UK...

When I look at the numbers and ten grand's worth of this product...

I'm sorry, it's not investible for me.

So, I'm afraid, I wish you all the best, but I'm out.

Sarah Willingham becomes the third Dragon to exit the deal.

Having convinced the entrepreneurs

to include the US company in the offer,

will Touker Suleyman now consider it a big enough opportunity

to take the plunge?

Guys, I can tell you where I am.

I do like the lid.

But the business is far too small

and I don't think that's investible for me.

And, for that reason, I'm out.

I think you made it slightly more attractive, Craig,

by at least conceding that there's an opportunity

to discuss with the main holding company.

That was hard to do. No, I could see it was.

But I think, at least, that got me to think

because I think you're in a very, very tough place.

You are a great example of an inventor

that has come up with something that is quite a unique product.

But even when you start to grow this business,

I don't think you're going to produce a serious return.

So, for that reason, I'm going to say I'm out.

Thank you. Thank you very much.

As Peter Jones declines the deal,

he puts the final lid on Tom and Craig's coffee takeout revolution.

That was hard. Mm. Unlucky. Yeah.

I was proud of Craig for actually taking my advice in there

and offering for the global share.

That was hard. I think it was a brave thing for him to do.

It's something I've been working on for a long time.

Next in the den are opera singing sisters Tina and Claire O'Brien,

who are hoping their dulcet tones will soothe the Dragons

into making a deal.

We were inspired by singing and that enabled us to have a great career.

We realised that we wanted to offer that same opportunity to children.

I hope we'll all fit in!

I'm really delighted that I've been given numbers...

Yes, brilliant - figures.

So, I've been doing my times table revision all week.

Oh, look at them!

CHILDREN: Hi!

MUSIC: King by Years Years

# Cut cover, take that test Hold courage to your chest

# Don't wanna wait for you Don't wanna have to lose

# All that I've compromised to hit another high

# I've got to keep it down tonight

# And ooh

# I was a king under your control

# And ooh

# I wanna feel like you've let me go

# So let me go. #

Amazing!

CHILDREN: Bye, Dragons! Bye!

We've done it!

Hello, we're Claire and Tina O'Brien

and we are co-founders of Little Belters.

Little Belters groups offer fun, affordable,

quality singing tuition for children aged 5 to 11 years old.

We've taken the idea of a children's choir

and we've turned it on its head.

We're looking for a ?45,000 investment

for a 15% stake in our company.

For one hour a week,

our members learn all about singing through our specially designed

fun, fast-paced programme.

They develop a great vocal technique and also grow in confidence.

These sessions are led by our

fully-trained, professional freelance singers.

We launched our first group in 2013

and we now have seven groups operating across Greater Manchester.

We would like to grow from seven groups to 100 groups

and that's why we need your help.

We have a proven business model and a strong brand.

Investment costs are low and we're a profitable business with no debt.

We really hope you'd like to invest in Little Belters

and we're more than happy to take any of your questions.

A note-perfect pitch from the sister act

who are looking for an investment of ?45,000 in return for 15%

of their children's choirs company, Little Belters.

The children's polished performance impressed the Dragons,

but Peter Jones wants Tina and Claire to give

an off-the-cuff demonstration of their teaching skills.

You're both singers. Yeah. What I want you to do is,

you're taking a class and, in front of you, you have five Dragons.

Do you want us to give you a lesson, then?

I think it's quite important

to get an understanding of what this is all about? I agree.

Right, Dragons, today we are going to focus on something

that's very important in singing.

That's having that lovely big space at the back of your throat.

So let's all try and yawn. Just...

Can you see how that opens up the back of your throat there?

Now try that yawn, but you're hiding the yawn

and feel that space at the back of your throat.

That space is where you're going to allow your

beautiful sound to come from.

Now, Dragons, you're not the only monsters in this room.

Over there, over that hill, there's a monster!

We want you to sing,

# What's that coming over the hill? Is it a monster? #

So, the words are, "What's that...?" What's that coming over the hill?

Coming over the hill is it a monster?

Is it a monster?

OK. One, two, three, four...

# What's that coming over the hill?

# Is it a monster?

# Is it a monster? #

The show's finally over now that everyone has sung

and it's time to get down to business.

Sarah Willingham is first to explore how the company works.

You talk about the proven business model.

Yeah. What is the business model?

What you spend, what you get back, how you get your customers.

Basically, we identify an area through market research

that will be a good area for a Little Belters group.

We then employee, recruit and train a professional singer.

We place them in a venue and we recruit all the members.

The children pay ?35 and they have three public performances a year

and they rehearse every week in term time.

So, it's only operating for 39 weeks of the year.

We're not operating on a franchise model.

So the marketing, the finance,

the administration is all managed centrally.

Is there another business that exists

that uses this business model that has done it successfully?

Yes. Yes, but only for adults. That is Rock Choir. OK.

And they have over 600 groups in the country.

And how long's it taken them to get to 600

and how have they done it?

Ten years. Ten years to do that. They started in a similar way to us.

They started with one group in Surrey

and then they expanded slowly in a sort of wave effect

across the country.

The obvious question, why haven't they done it for kids?

I mean, they've already got the infrastructure,

they've already got the teachers and parents,

why on earth aren't they doing it for kids?

After a strong start,

the news that a more established company could potentially

run with their idea has struck a worrying cord.

Now, Peter Jones wants to see

if they have the commercial savvy to match their teaching skills.

How good are you at business?

Erm. OK. For ten years, I worked in the arts.

I worked in arts management.

I was head of development both in Manchester and London

for a big arts organisations. Right, so give me that sample.

One group, 12 months, costs of operation, income...

For one group, based on 35 children in a half term,

you would be getting... Erm...

Oh, my gosh, this is where my mind has gone blank.

Erm...

Basically, every group brings in under ?7,500 per year,

that's the turnover. We're paying somebody...

Claire, I'm very worried you can't add up.

It's just my mind. No, joking aside, you want to run a business.

It's all well and good to go and sing. Yes.

But you need to demonstrate now that you can at least add up. Yes.

OK, so ?35.

And there's 35 children.

So, in a half term, they would be bringing in...

We would bringing in ?1,000 per half term, roughly. Circa ?1,000.

You need to get that number for me exactly.

It's ?35 times 30 or 35 kids, however many you have, times by six.

It's six half terms. Of course, yeah, six half terms.

Yeah. Right, OK. Six half terms and everyone pays ?35 a half term

and there's a minimum of 30 kids in the room.

Which is just over six grand.

Right, that's a total of ?6,000 per year.

Per group.

What do you have to pay out to generate ?6,000 of income?

?3,500.

Right, so you make ?2,500 gross. Mm.

So, at the moment, you've got seven of those occurring each year?

Yes. So, you're generating under 20K.

So, 17/18K. 18K gross profit.

You want to go to 100? Mm.

Yes. But even if you have 100 groups, which is utopia,

that is mega success,

the maximum net income you could generate is 200,000.

Yes.

Dragons are always hungry for profit

and Peter Jones' assessment has highlighted a potential ceiling

on the cash this business could generate.

Now, Nick Jenkins takes up the baton.

I'll tell you what my concern is,

if you look at 100 groups and you say,

"100 groups, we'd be making ?250,000 profit."

The problem is, that isn't taking into account marketing.

You've got to be spending money on attracting kids into those groups,

because they will come, they will go.

We do have that in our forecast.

OK, well, let's talk about your forecast.

What's your forecast at 100 groups?

100 groups would be ?680,000 turnover.

OK. ?257,000 gross profit and ?203,000 net profit.

OK, basically, ?54,000 of overheads?

You're expecting to run this business on ?54,000 of overheads,

including marketing.

That's including both your salaries and all of your marketing?

It's not going to work.

The fun-filled atmosphere in the Den has disappeared,

with two Dragons questioning the company's prospective profitability.

And Deborah Meaden also has concerns about taking it to the next level.

This type of business is very, very expensive and difficult to roll out

because it's all about replicating you.

And you're going to spend your life

constantly having 20% of the people working for you disappointing you.

The group leaders will learn how to deliver our lessons.

We've designed a very specific lesson plan

and the lesson plan becomes the group leader's script.

If they follow this script,

our quality, our style will be maintained.

But they just won't be you.

Trust me, I do think you've underestimated that

and I think the problem is here

that, whilst you can make a business of it,

I just don't think there's room for an investor.

I won't be investing. I'm out.

It's a speedy exit for Deborah Meaden,

who's the first Dragon to turn down the deal.

The entrepreneurs have already revealed a competitor

in the marketplace and now Nick Jenkins wants to find out how much

they know about this other choir business.

Can I ask you more about Rock Choir?

Have you looked at their accounts?

No. OK, because you could have done that.

Yes. You could have looked that up online before you came here.

The reason why I ask that is,

because what would make this work would be if one of you

had that kind of real commercial drive.

Of course, one of us could provide that,

but we'd have to work full-time on it.

It's what makes the difference between one of these things

succeeding and one of these things not succeeding.

Because you haven't done that,

it would just end up being more work than I'd be prepared to put in.

I can't be sure enough that you're the right team

to make this scale up.

And, I'm afraid, I'm out.

Nick Jenkins lacks confidence in the sister's ability to run a company.

And an equally sceptical Peter Jones is ready to state his position.

The reality is, you're coming in asking for my money

for a business idea to back you.

When we start digging down into the detail of the business model,

who's in the market? What's the competition out there?

What have you researched?

You've really let yourselves down.

You've got to start knowing a lot more about your business model

and a lot more about your competition and how you're

going to make this business work,

if you want to be successful in business.

So, as harsh as that may sound...

..I'm hoping it's a reality check,

because I think that's what you do need.

So, I'm going to say that I'm out,

because you haven't given me any reason to think about investment.

With Peter Jones' words still ringing in the entrepreneurs' ears,

will they find retail mogul Touker Suleyman any more forgiving?

I love what you do and I think you're very talented,

but there's a big gap between being talented and a business.

I do not believe that, if you go down the route

of expanding to 100 units, you are going to make any money.

If anything, you'll make less than what you're making now,

because your overheads will grow. Mm.

I think there's not a business there

that's viable for an outside investor.

And for that reason, girls, I'm out.

Touker Suleyman withdraws from the deal,

unable to see enough revenue from the business going forward.

Now, only Sarah Willingham can save

the quavering pitch from falling flat on its face.

Fundamentally, you know, I'm a mum of four young kids,

I love what you do.

But there are a lot of little groups of the after-school clubs that work

extremely well locally and a lot of them want to go nationally

and it's very difficult to do.

I'm not saying it's not doable,

but, as an investment, it's such a slog and it's very risky, actually.

I'm afraid I'm out. All right, thank you very much.

Good luck. Thank you. Bye-bye.

After a tough session in the Den,

it looks like the sisters will have to take their business forward

without the help of a Dragon.

Well, that went well. Oh, that was harsh.

That was really, really hard going.

Next!

It was almost like they saw what they thought was weakness

and attacked.

But you know what we've always got over the Dragons?

Is their singing was dreadful!

Come on, baby.

Hoping for better success in the Den

were plumbers Allen Scriven and Michael Caine from London.

They wanted ?80,000 for a 20% stake

in their dating app with a difference, Fuzzy Banter.

The photo we've used was of you five lovely dragons.

Once you're happy with your photo, it's instantly made fuzzy.

It's about your personality.

You just cut me out! You won't be later, Peter.

It's just cos you're so tall.

Their unique selling point was that you get to chat,

but you don't get to see the person you're chatting to.

A message will come through.

This is at the stage where you can now reveal yourself.

So, as you can see, the picture comes through clear

and this is what we see.

Again, we can see you now, Peter.

The entrepreneurs were keen to show they were

avid users of their own product.

We've been using it in London.

Obviously, we're London based and there's lots of people in London.

Can I just check, are you married or not? I was going to say that!

Are you? Yes, I'm married, Deborah, but it's purely just for research.

LAUGHTER

I've just given you the opportunity

to get yourself out of a lot of trouble.

But back to business,

Sarah Willingham was not convinced the app was the next big thing.

I love banter and I would love to think that we lived in a world

where people were not at all influenced by looks.

It's just not the reality.

I don't think you will become

the number one dating website in the world.

And, after a moment of clarity,

it was left to Peter Jones to jilt the pair of plumbers,

turned matchmakers.

This is really good banter, isn't it? Yeah.

But your business is really fuzzy.

I like it! The reality is,

Fuzzy Banter works until it becomes clear.

I won't be investing. I'm out.

OK. Thank you for your time. Cheers.

Still to come...

An entrepreneur under pressure.

I'm not looking for excuses...

No, sorry, no... I'm just looking for the numbers.

No, I can appreciate that.

And will the Dragons do a deal?

I'm going to make you an offer.

I think I might pitch in with an offer as well.

I'm going to make you an offer

and it's definitely an offer that I think you should accept.

Our next entrepreneur in the Den

is hairdresser David Audsley, from Yorkshire.

He spotted a problem in his profession and invented a solution.

Now, the Dragons have already rejected one invention tonight.

So, will they blow hot and cold on seeing David's design?

In terms of launching a new product, it's all completely new to me.

I've borrowed so much money to do this.

Last year, at one point, I thought I potentially could lose everything.

It's cost a lot more to develop than we ever imagined.

One of the things I'm most scared of is falling at this last hurdle.

That's me. All or nothing, unfortunately.

It's kind of go big, go home.

Hi, Dragons. My name's David Audsley and I'm the inventor of the DAIO.

The Daily Appliance Intelligent Organiser.

I'm here today to pitch for a ?75,000 investment

for a 20% share of my business.

A staggering 650,000 house fires reported in the UK

are caused directly from unattended hair straighteners,

tongs and, in some cases, even hairdryers.

One of the reasons I invented the product is children

that are admitted to hospital with a burn as a direct result

of coming into contact with a heated hair appliance in the home.

These products get to temperatures of 220 degrees

in less than 20 seconds.

I really believe that DAIO is the total solution,

offering safety, convenience and peace of mind

to all of our customers. Let me take you through it.

So, the DAIO consists of two 300 degree, heat-resistant silicone cups

that will fit pretty much most of the hair appliances

that are available on the market today.

They fit nice and securely

into the 230-degree, heat-resistant fire-retardant chassis.

Quite often, you'll see a lot of people

leaving their straightening irons on a mat.

A lot of children can just come along and pull them off.

With the DAIO, it's designed to be child-proof,

so, even when they waggle it, they can't get them out,

because they're designed to collapse.

They can't burn themselves and they can't pull them out.

We launched in March last year and, within the first three months

of launching the product,

we were featured on ITV This Morning,

in conjunction with Child Safety Week,

in a piece called Gadgets To Keep Your Kids Safe.

Thank you very much for listening.

Can I hand you some DAIO's? Is that OK?

Hoping for investment and not a heated debate is David Audsley,

with 20% of his company on offer, for ?75,000.

Thank you very much. No problem.

The first to explore the nuts and bolts

of the safety-conscious creation is Peter Jones.

So, you've clearly got a lot of PR.

If you've been on This Morning,

it's going to sell as much as it's going to sell, isn't it?

Well, I mean, I think we sold about 70 in the first five or six

minutes and then the website crashed.

Nobody's working on this full-time.

I work 50 hours behind a hairdressing chair...

David, I'm not looking for excuses. No, sorry...

I'm just looking for the numbers. No. I can appreciate that.

Year one sales of 26,000. Pounds? Yes.

And a net of -25. -25K.

And then what year are we in now?

Well, we've just finished year one. Our books were just audited.

How much money have you invested in this?

So far, me and Pat, my marketing director,

we've put ?171,000 into it so far.

Wow!

You've put ?170,000 of your own money into this?

I've put about 70,000 of my own money into it.

I've borrowed so much that I stand and cut more hair

than I've ever cut before to make the loan repayments.

Wow, David, you're in a tough situation.

The early revelation of the amount of money David has spent on

developing the product so far has left Peter Jones shocked.

And now Deborah Meaden wants to dig deeper into the business' finances.

Is this a director's loan in the company?

Yes, from me and from Pat. Pat's put 80,000 in.

And who put in the rest?

I actually borrowed 20,000 from one of my clients.

OK, and what are the terms of that director's loan?

How do those get paid back?

There aren't any terms in place at the moment,

because we really want to see it out there.

To be honest, I'm happy to join the back of the queue.

David... I...

I think you've got something in your idea.

How much stock have you got?

At the moment, we've got in retail probably ?100,000 worth left.

I believe in the product.

I went up to meet a buyer at Lakeland,

but they wanted to pay about ?9 or ?10 for it

and we make it for ?12.95 plus VAT.

To see whether or not this is a market,

you kind of need to test with somebody.

And say, "OK, I'll sell them to you for ?9.

"Now, let's see how many you sell."

Yeah. Because, for me, you're already so in debt.

And what worries me about that -

just so you know, it isn't just the cash,

it's the fact that your state of mind has allowed you

to get into that much debt and, therefore, I know...

I KNOW that, if I put money into your business,

we could get into further debt.

Because that's the place you come from.

Deborah Meaden's assessment leaves the entrepreneur on shaky ground.

But it's not the debt,

but the design that Nick Jenkins is weighing up.

It's a really solidly well-made product. Yeah.

I'm just a little bit concerned that it might be over engineered.

It's quite a lot of product.

It sits. It takes up quite a lot of space.

I just can't believe that there isn't something,

a single moulded piece of silicon that could do the same thing.

This is the thing, you see, we are developing the single.

We want to develop the single unit...

David, you are already spending more money developing the next product,

because the first product doesn't work.

No... I promise you, when that product doesn't sell

like you think it's going to sell, you'll be thinking,

"Ah, well, if I change this and I add that, it might work."

I'm really sorry, I'm going to tell you now, David,

I won't be investing in you. I'm out.

It's a cutting critique from Deborah Meden,

who withdraws from the deal

convinced she'd get her fingers burned.

Will Sarah Willingham chance her arm and back the embattled entrepreneur?

What are you going to do if you don't get the investment?

What is the plan? We're managing the payments.

We don't owe any of our manufacturers any money.

We've got stock to sell and I've put my life and soul into it.

But at the moment, you're crushed by this.

And, actually, it means you can't think straight and that becomes

debilitating, not just for you, but also for the business.

There are things that are out there on the market

which are sleeves effectively...

Yes. ..for hair straighteners and you can fit tongs in it.

The challenge is people aren't buying that.

And that's a very simple, very basic product

that's actually dead cheap.

So, when you then come out with something which is

an all-singing, all-dancing version, it's not a proven market yet.

I think, for you, it's about sell your stock,

pay back as much debt as you possibly can.

Don't spend loads more money on developing more and more products.

Yeah.

I'm sorry, I'm out.

Another Dragon is out,

questioning whether David's invention is mainstream

or a niche product.

Will retail tycoon, Touker Suleyman,

rescue the entrepreneurs floundering hopes of investment?

I agree it's over engineered.

But I would say to you cash is king. Yeah.

You've got 8,000 pieces in stock? We've actually got...

I think there's about 3,000 pieces in stock.

You said there was ?100,000 worth of stock.

Yes, retail. 39.99. It's quite expensive for what it is.

I'd say turn that stock into cash.

Stop and think. Is this a pipe dream that I'm going to chase?

But this thing's potentially going to stop house fires

and children getting burned. I know. But let's be honest,

the sales just speak for themselves.

There's not a business there.

So, for that reason, I'm not going to invest in you and I'm out.

Three Dragons down in quick succession.

Nick Jenkins was earlier impressed with the product,

but is now worried that it's not the ideal safety-first solution.

The thing that staggers me is that people are

allowed to sell heating tongs... Yeah. ..without some device

to stop it burning the surface that it's sitting on.

I mean, in a day and age when I'm not allowed to climb a ladder

without doing a course on how to climb a ladder, it's staggering.

My concern is, I want to invest in businesses that have a future.

I hope the solution ultimately, in the long term,

lies with the legislation and the appliance manufacturers,

rather than with a retrospective solution.

So, for that reason, I'm out.

Four Dragons are out

as Nick Jenkins acknowledges the problem,

but not David's answer to it.

Will Peter Jones swim against the tide of rejections

and tie up a deal with the ambitious hairdresser?

I actually think the product's really good. Do you?

It's the sort of thing that definitely has a use.

Overengineered, so what does that really mean?

It means that obviously the cost of the product is an issue for you.

Yep.

You are going to have to look at this realistically and say,

"Look, I've not created a business, I've created a product.

"It's not quite worked out for me."

And you need to give this over to people that understand

how to place products into the consumer marketplace.

Licence it and carry on with your day job.

I can't invest in something like this,

but I do think it's a good product.

David, I'm not going to invest and I'm out.

OK. Thank you. Thanks, David.

In the end,

although David's invention won the Dragons' admiration,

they couldn't get past the debts he's incurred in creating it

and he leaves the Den without the backing he was hoping for.

Wow, didn't see that coming.

Maybe the pitch wasn't as good as it has been.

I believe in the product 100%.

We will come back bigger and stronger.

Time for our final entrepreneur tonight, Jacob Thundil.

Now, in a crowded market, it's hard to make your mark,

particularly when it comes to any kind of food or drink.

But Jacob has an on-trend product range that he thinks will

tickle the Dragons' taste buds.

Jacob is a man on a mission,

excited to share his lifelong obsession

with the multimillionaire investors.

I'm very passionate.

I couldn't do even one day without my own products.

Imagine liking chocolate and getting paid to eat it, that's how I feel.

I'm a fan of the Dragons.

Everybody has a different skill set

and we feel the Dragons can help us to take it to the next level.

Hello, Dragons. I'm Jacob Thundil.

Chief nut at the Cocofina, the coconut experts.

We produce coconut products to eat, drink and cook with.

I was born in a place called Kerala

and Kerala means in Sanskrit land of coconuts.

Cocofina was my destiny.

As a young boy, I was fascinated with the amount

of uses out of coconut.

And today, I use coconut products every day.

The market for coconut oil and coconut water alone in the US

is worth around ?750 million and, in the UK, ?50 million

and doubling annually.

Our turnover figures over the last three years

has been 1,600,000 and 300,000 respectively, rounded up.

A net profit of 70,000, 50,000 and 12,000.

I'm offering 5% for ?75,000.

We would welcome a Dragon to join the coconut experts

to build a super brand for coconuts.

I would welcome you to try our products.

It's a passionate pitch from Jacob Thundil,

who is offering 5% of his food and drink business

for a ?75,000 investment.

With a wide range of coconut products, from water and milk

to snack bars and oils,

can Jacobs enthusiasm penetrate the Dragons' impermeable shells?

First up is Deborah Meaden,

who wants to know about Jacob's current route to market.

So, talk me through who you are selling through at the moment.

So, we're selling to Harrods, Fenwick,

DAS Farms, Diversifying Foods,

Holland and Barrett, 700 stores for the coconut water alone.

And we export to 25 countries outside of the UK.

So, how much is export of your turnover?

45% is export. Right. 55% is UK.

And who's your target retailers that you want to be working with?

So, now I want to get into pharmacy.

But this morning, I got an e-mail from Superdrug saying,

"I'm a big fan of your products and I'd like to meet you."

I want to get into Boots and then Marks Spencer's and Waitrose.

It's a confident start from Jacob,

with big-name retailers already on his books, as well as in his sights.

But Peter Jones, who has fingers in several foodie pies,

is interested in how the entrepreneur developed his company.

You started three years ago, is that right?

Originally, started 11 years ago

and working full-time and working part-time on the business.

What did you do 11 years ago?

I started with coconut water and did ?30,000 worth in a year.

Nobody knew what coconut water was. 11 years ago? Yeah.

Why so many products?

I want to make sure that I show innovation to the customer.

I want to establish myself as a coconut expert.

So, for example, the soya sauce alternative,

I've only started making them in less than a year,

but I've sold around 15,000 bottles of them.

Really nice bar. Thank you.

It's rare for an entrepreneur to pass the Peter Jones taste test,

but it looks like Jacob has done it.

Now, Touker Suleyman wants to know more

about the business structure behind the self-professed chief nut.

Describe your organisation to me.

So, there's me and then there's a lady that started with me.

She's a 50% shareholder of the business.

What's her name? Manisha.

Tell us a little bit more about her and her background.

She's here and I met her at a trade show in France.

I was doing a stand there and she was inspired by the product.

So, she said, "Could I come over to the UK to work on an internship?"

And then she never left.

Can we meet her? Yeah, sure. She's downstairs.

There's a momentary pause in proceedings

as camera-shy Manisha Solanki agrees to join Jacob in the Den.

Having discovered she's an equal partner in the company,

the Dragons want to assess the part she plays in running it.

Hi, Dragons. Hello.

Manisha, I apologise for dragging you out with no notice,

but it's obvious that you're a very important part of this business.

What I'd like to understand is how you divide the roles.

I'm sales, marketing, purchasing.

Manisha is all operations.

So, logistics, all the deliveries, everything like that. Great.

Basically, once he has made the sales, I take care of everything.

The Dragons now have a more complete picture of the company

and, so far, it seems to be ticking their boxes.

But food and drinks guru Sarah Willingham

is concerned that their next target is pharmacies, not supermarkets.

What I'm really interested in

is the direction you want to take the business,

because what's great about coconut at the moment

is it is going into mass-market.

But when we ask you the direction you want to take the business in,

your answer was pharmacy. And that really flummoxed me.

Yes, if we go into mainstream, we need to have a plan.

We met Tesco. They said, "Can you sell all these products to us?"

So, I'm thinking, how do I keep my existing customer base,

not upset them and try and build from there?

That really interests me, because I know Tesco very, very well

and this is exactly the kind of product that they are looking for

and it's exactly what I thought when I saw you.

That would be the direction I would want to take the business in.

We're open to change, because we're not a big business that...

But would you see that as change, though?

I would see it as a risk.

You said you want to be in Marks Spencer's. Yes.

I've got great connections with Marks Spencer's.

They have a delicatessen department. Might be your first great step.

That's what I mean, yes.

But then it's 2% of the market compared to 30% of the market.

The tension is palpable as the two Dragons pitch rival retail plans

for the products.

But Deborah Meaden is about to take the Den by surprise and cut through

the charged atmosphere.

Jacob, I'm going to break cover. OK.

You might be a bit cautious, but it makes you stop and work stuff out.

I actually think you've taken a good route.

I only say that, because a lot of businesses I get involved with

rush to the big supermarkets, not necessarily ready.

And actually, as soon as you hit those shelves, your margins drop.

Yes. And I always think there's a proving time.

So, I'm aligned with you. And you're very good.

Thank you.

So, I'm going to make you an offer.

I'm going to offer you all of the money.

I want 20% of the business.

And I want 20% of the business, because there is,

A, obviously the contacts that I can bring.

But I think the development side.

I think there's a little bit of work that needs to be done on that.

But I think we are the team that can do it,

so that's my offer to you.

Leaving the other Dragons in her wake,

Deborah Meaden's sudden, but decisive offer

is a welcome breakthrough for Jacob and Manisha.

But at 20%, it's four times more than the entrepreneurs

want to give away.

Will another Dragon sweeten the deal?

Well, I think I might pitch in with an offer as well.

I love the passion that you have for the product.

There's a really authentic basis to this business,

but what you haven't done very much of is really

developing your brand.

That's something that I've a reasonably good understanding of.

And know the kind of people that you'd need

to be able to drive that forward.

So, I'm going to match the offer, all of the money for 20%.

I really like what you've said.

I like the way you've tackled the questions.

And I'm such an enormous user of the product.

I love it.

I'd really like to work with you on this.

I think this is a business I could get very, very passionate about.

So, I'm going to match the offer.

All of the money for 20% of the business.

And Sarah Willingham makes three,

giving Jacob and Manisha a lot to think about.

Will Touker Suleyman make it four in a row?

The path you're taking in making a luxury product is definitely right.

My background is production, distribution, contacts.

And I appreciate you've got all these offers.

So, I'm going to add a bit of spice to it.

You're seeking 75,000, aren't you? Yes.

I'm going to give you 100,000.

I want 25%, but you can have the 5% back when I get my money back.

Thank you.

By offering more cash than entrepreneurs pitched for,

Touker Suleyman is clearly hoping to trump the other three Dragons.

But Peter Jones, who turned a Den sauce investment

into a multi-million pound business, is still mulling over the deal.

I feel that I know a lot about this type of market.

I'm knowledgeable enough to understand

where the market pitfalls are and what happens as you try to grow

a business such as this.

My issue, actually, potentially for you, is your brand.

Have you got any product

that you can see can go mainstream and scale,

whilst not desecrating your brand?

Yeah, the glass jar with the coconut milk

will definitely go mainstream, because coconut milk

is such a huge market, because everybody uses it.

But it doesn't come with the convenience

of returning it back to the fridge.

I agree with that. Anything else?

The snack bars.

We started 18 months ago. Yes.

And we've now sold around 200,000 bars this year.

I'm going to make you an offer.

And it's definitely an offer that I think you should accept.

I'm going to offer you all of the money for 20%.

I like it enough to say that I would split it with another Dragon.

Can I ask you a question, though?

If we were to buy the shares back from you for double the money

in three years' time, would you give up 10% back to us?

Erm, I can say no.

I think that you would be seriously undervaluing the fact

that I could pick the phone up to Boots

and I could help immeasurably with your business.

Just so you know, my position would be absolutely the same.

I don't have an issue with the idea that if you come in at 20%

and you say, not after three years, but after one year,

that you say, "Right. Actually, I want to reduce you down to 10%"

and it's going to cost you ?75,000, I don't have a problem with that.

That would be enough by that point to have done the things

I can do for you in terms of developing the brand.

And I think this brand can be developed. Thank you.

I would just want to add one thing,

that I would very much be prepared to split it with another Dragon.

Sarah, would you be prepared to split on the terms that I suggested?

Yes, I would. I would be prepared to split it with Nick.

I think, between the two of us, you get two for the price of one.

I don't think we need to discuss further. Right. OK. Brilliant.

Brilliant. Great. Thank you.

And sorry. Hug! Brilliant!

Brilliant. Well done. Oh, that's great.

I think you made a big mistake by not choosing me.

He always thinks that.

Thank you from the land of coconuts. Well done. Great, well done.

Thank you, bye-bye.

Jacob and Manisha have done it.

And they leave the den with two Dragons on board.

They've given up 20% of their company,

but agreed a deal that means they could potentially buy back

10% of the equity in 12 months' time.

I really liked him. Yeah, a good solid business.

He's not as sharp as I thought he was at the end. No.

It was amazing! It was an incredible experience.

My heart just cannot stop beating, actually.

We feel it's an incredible combination,

because you have one person with food and the other

person with online.

So, what more can you ask for? So, it's a dream team for us.

Well, it's been a tough old night in the Den,

with two very different inventions swiftly rejected by the Dragons.

And despite the sound of music,

the singing sisters also exited the Den empty-handed.

But one pitch struck all the right notes and got five Dragons

fighting for the slice of a coconut company. Who would have thought it?

Bramble, jump! Before you say anything, there's my money.

Coming up next time...

There's a grave. You are now two foot in the grave.

It's pink silicone.

It would look more at home in Ann Summers. What?

I'm flabbergasted by that.

I feel very, very conflicted.

I have to come clean, I'm also very conflicted.

And would you believe it? I think I'm conflicted.

I'm a businessperson, not a magician.

As the brand, I love it and I'm going to make you an offer.