0:00:26 > 0:00:32These are the Dragons - five of Britain's wealthiest and most enterprising business leaders.
0:00:32 > 0:00:39Over the coming weeks, they'll make or break the dreams of dozens of budding entrepreneurs.
0:00:40 > 0:00:42I've opened a can of worms there.
0:00:42 > 0:00:45I would not have signed that.
0:00:45 > 0:00:48That wasn't what you pitched. Theo's given you an out.
0:00:48 > 0:00:51I'm not happy with this.
0:00:57 > 0:01:02The multi-millionaire investors have each built up their fortunes from scratch.
0:01:05 > 0:01:09Retail magnate Theo Paphitis.
0:01:09 > 0:01:12Hotel and health club owner Duncan Bannatyne.
0:01:12 > 0:01:16Leisure industry expert Deborah Meaden.
0:01:16 > 0:01:19Queen of logistics Hilary Devey.
0:01:19 > 0:01:22And telecoms giant Peter Jones.
0:01:22 > 0:01:29The Dragons have the credentials, the contacts, the commitment and the cash ready to invest,
0:01:29 > 0:01:32but only in the right business.
0:01:32 > 0:01:37Will any of these hopeful entrepreneurs walk away with their money?
0:01:45 > 0:01:47Welcome to the Dragons' Den.
0:01:47 > 0:01:51Here, as always, we have our five multi-millionaire Dragons
0:01:51 > 0:01:54who are all equal opportunity investors.
0:01:54 > 0:02:00They'll give an opportunity to any entrepreneur who is equal to the task of selling a good product
0:02:00 > 0:02:04at a healthy profit. A few will secure the Dragons' cash.
0:02:04 > 0:02:06The others will leave with nothing.
0:02:06 > 0:02:10Our celebrity-obsessed culture is much maligned,
0:02:10 > 0:02:16but our first entrepreneur, Steven Charrot, thinks he's found a way to cash in on it.
0:02:16 > 0:02:18Will the Dragons agree?
0:02:29 > 0:02:32PAPARAZZI SHOUT
0:02:46 > 0:02:52Hi there. My name's Steven Charrot. I'm the managing director of Dayfame Luxury VIP Experiences.
0:02:52 > 0:02:57I'm here today pitching for £100,000 for a 30% share of my company.
0:02:57 > 0:03:02Celebrity status, for most of us, it's a distant dream.
0:03:02 > 0:03:07A fantasy so far-fetched from reality it's hard to even imagine. That is until now.
0:03:07 > 0:03:12Imagine stepping out of a Rolls Royce onto the red carpet at one of London's best clubs
0:03:12 > 0:03:18to the sound of photographers shouting your name. After posing for some photos,
0:03:18 > 0:03:22personal security escort you inside. No queues, no entry fee.
0:03:22 > 0:03:26Straight to your VIP table where your drinks are waiting.
0:03:26 > 0:03:32This is just a taste of one of our unique, tailor-made experiences. In the short time we've been trading
0:03:32 > 0:03:39we've sold over 500 celebrity experiences, provided over 1,500 guests to venues across London,
0:03:39 > 0:03:44we've created a brand capable of attracting a huge level of customers
0:03:44 > 0:03:50and we feel we're now ready to take the business to the next step. Thank you very much for your time.
0:03:50 > 0:03:55I look forward to speaking to you all and hopefully working with at least one of you.
0:03:57 > 0:04:02An attention-grabbing pitch from South London-based Steven Charrot,
0:04:02 > 0:04:05but then that is the whole point of his business.
0:04:05 > 0:04:11He needs a £100,000 investment to grow his celebrity experience company.
0:04:11 > 0:04:15It's a sector Peter Jones knows well.
0:04:15 > 0:04:21- Steven. How much is the experience? - We have the gold, platinum and diamond experiences.
0:04:21 > 0:04:26The gold one starts at around £199, the diamond is about £1,500.
0:04:26 > 0:04:32We've tried to gain the exclusive rights to the venues we work with.
0:04:32 > 0:04:36- You know, the best ones in the West End.- Give me an idea, then.
0:04:36 > 0:04:41- Who do you work with?- Basically, when we first started doing this,
0:04:41 > 0:04:46we got all the venues on board. Because we hadn't hosted with them, we couldn't get exclusive rights...
0:04:46 > 0:04:53- OK, but have you got an exclusive with some of them?- Yeah, but what we're actually working on
0:04:53 > 0:04:59- is the largest chain we work with is one you've all heard of.- Right. - They do all the West End clubs.
0:04:59 > 0:05:04- I'm meeting them...- OK, what have you turned over in the last year?
0:05:04 > 0:05:07We've turned over £85,000.
0:05:07 > 0:05:11- And what's been your gross profit? - About £40,000.
0:05:11 > 0:05:14- And your net profit? - Just over £20,000.
0:05:14 > 0:05:20- So you've only got, for a full year, £20,000-worth of costs? - I'll explain why.
0:05:20 > 0:05:25We've sold primarily through daily deal sites such as Groupon...
0:05:25 > 0:05:31- Sorry to cut across you, but... - Sorry.- I'm trying to get across that your total costs are £20,000
0:05:31 > 0:05:36- to include salaries, everything. - Well... Sorry, I'll go on to say
0:05:36 > 0:05:41we've got our fixed costs so low so we can host these events very cheaply.
0:05:41 > 0:05:47- But how have you got those costs down?- Because we can host up to six experiences
0:05:47 > 0:05:52on a Friday night and six on a Saturday. They generate good profit.
0:05:53 > 0:05:57The rapid questions garner some faltering responses,
0:05:57 > 0:06:05but Steven's passion is clear. How will he fare under the scrutiny of Duncan Bannatyne?
0:06:06 > 0:06:10- How did you come up with this idea? - It was when I was in Miami.
0:06:10 > 0:06:14When I was stood outside a club, in the queue,
0:06:14 > 0:06:19and a Lamborghini pulled up and this big guy jumped out
0:06:19 > 0:06:24and walked straight in, bypassed the queue. Everyone felt the same way,
0:06:24 > 0:06:27staring at him, like, "Wow! I wish I was THAT guy!"
0:06:27 > 0:06:34- The seed was planted. - You're selling this through Groupon. Did you approach Red Letter Days?
0:06:34 > 0:06:40- We also sell through Virgin Experiences, which are the... - You sort of avoided my question.
0:06:40 > 0:06:45You have a habit of doing that. Let me finish the question first.
0:06:45 > 0:06:52- Did you approach Red Letter Days, buyagift.com or any others? - Yeah. Not Red Letter Days,
0:06:52 > 0:06:58- but quite a few others, yeah. But... - How much discount do you give Groupon?
0:06:58 > 0:07:01We actually gave them 80%.
0:07:01 > 0:07:07- On the website. - On an experience that was £500, which Groupon were...- Hold on.
0:07:07 > 0:07:14- So on a £500 experience, you gave 80% off?- Yeah. No... I think it was 90% off.
0:07:14 > 0:07:20But I was quite clever with the way I did it because that included the standard experience.
0:07:20 > 0:07:25On top of that, they could buy a VIP table. We get given... The clubs are very good with us.
0:07:25 > 0:07:31- They give us free tables. - So have you made any money from doing Groupon?- Yeah, yeah, yeah.
0:07:31 > 0:07:36Absolutely. But also we didn't do the celebrity experiences with them.
0:07:36 > 0:07:44- We did the luxury boat cruises. - The Dragons look bemused by Steven's rather scattergun approach.
0:07:44 > 0:07:49Can Hilary Devey bring more focus to the young entrepreneur's pitch?
0:07:49 > 0:07:56- What do you need 100 grand for? - Em, so there's £21,000 for marketing and advertising.
0:07:56 > 0:08:01We've created a brand capable of attracting a huge level of customers.
0:08:01 > 0:08:07The main thing we've been missing is the ability to get our name out there
0:08:07 > 0:08:12- without daily deal sites. - Steven, I asked you a question.
0:08:12 > 0:08:13Please.
0:08:13 > 0:08:21- Just answer the question.- OK. Another £21,000 would be for office and studio rent in Central London.
0:08:21 > 0:08:27What that would enable us to do is launch a whole new range of under-18 experiences as well.
0:08:27 > 0:08:31They can get a limo to the studios, they get papped on their way in,
0:08:31 > 0:08:37- they can film a Dayfame documentary, talking to the camera... - Has he answered your question?
0:08:37 > 0:08:41- That is what I need the money for. - Do you know, Steven,
0:08:41 > 0:08:47I'm really sorry cos I think you're lovely, but you'd drive me mad. You're making my foot itch
0:08:47 > 0:08:53and my ears itch. I won't be investing in you today, so I'm out.
0:08:55 > 0:08:59Frustration results in a first blow for the enthusiastic businessman.
0:08:59 > 0:09:03Theo Paphitis has direct knowledge of this market.
0:09:03 > 0:09:07Can he be convinced that Steven is worth backing?
0:09:07 > 0:09:13You are describing... a traditional experience business
0:09:13 > 0:09:18and nothing else. There is nothing specifically different in this.
0:09:18 > 0:09:22But there's a much bigger picture. It's the membership.
0:09:22 > 0:09:25There's a Dayfame membership. Rather than just a one-off event,
0:09:25 > 0:09:31you actually pay £39 a month and you get free entry into venues,
0:09:31 > 0:09:34you get queue jump, but also on top of that
0:09:34 > 0:09:39every two weeks there's the Dayfame Showcase where we open up one of the clubs we work with
0:09:39 > 0:09:46- an hour earlier than normal. They also get an hour's free drinks. - Right. OK.
0:09:46 > 0:09:51So basically we're back to where we started from. It's an experience.
0:09:51 > 0:09:55- It just revolves around clubs. - Not just clubs. Restaurants.
0:09:55 > 0:10:00The Romance Experience... They are all experiences.
0:10:00 > 0:10:04- It's an experience.- You get your pictures from every event,
0:10:04 > 0:10:10- people love memories and walking down the red carpet.- Steven... - It's put a smile on so many faces.
0:10:10 > 0:10:14You're hugely enthusiastic and you're also bright.
0:10:14 > 0:10:20- That's clear.- Can I be honest? One thing I've done is... - Can I just stop you, please?
0:10:20 > 0:10:24Em... Oh.
0:10:27 > 0:10:30I'm sorry. I'm out.
0:10:32 > 0:10:39- You're struggling to keep your mouth shut, aren't you?- Obviously, I've got to try to protect my business.
0:10:39 > 0:10:44Steven, I have to tell you where I am. I think it's quite ridiculous. You're all over the place.
0:10:44 > 0:10:47I'm not going to invest in you. So I'm out.
0:10:48 > 0:10:54There may have been some smiles, but that's no comfort for the charming entrepreneur
0:10:54 > 0:10:59as two more Dragons walk away from the deal. Just Theo Paphitis and Peter Jones are left.
0:10:59 > 0:11:04Steven, I don't think you're ridiculous at all.
0:11:04 > 0:11:09And if you're going to do all the things you say you'll do,
0:11:09 > 0:11:13I don't think you need 100 grand. I think what you need is energy,
0:11:13 > 0:11:19some drive, some ambition. I think you might have a bit of that.
0:11:19 > 0:11:24And you can do all those things without my 100,000 quid.
0:11:24 > 0:11:30And when you do it, I'll be the first one to congratulate you, but I won't be investing.
0:11:30 > 0:11:32So, Steven, I'm out.
0:11:34 > 0:11:38Em, 500 experiences sold. 1,500 people taken part.
0:11:38 > 0:11:44I take nothing away from what you've done. You've represented yourself well, you've pitched well.
0:11:44 > 0:11:48Steven, I've got a business with Theo that's in this marketplace.
0:11:48 > 0:11:53You would be great as an individual
0:11:53 > 0:11:58to be employed and come and head up those new experience areas.
0:11:58 > 0:12:02I know you want your own business, but if that didn't work out,
0:12:02 > 0:12:09I for one would definitely be a pro-advocate in having a discussion and offering you a job.
0:12:11 > 0:12:15- I might well try and contact you. - Great.- Afterwards.
0:12:15 > 0:12:19But I can't invest. Unfortunately, I'm out.
0:12:19 > 0:12:22- OK, thanks guys.- Thank you. - Good luck. Well done.
0:12:22 > 0:12:27An interesting experience for Steven. No cash,
0:12:27 > 0:12:31but he may have just made his best contact to date.
0:12:37 > 0:12:40The mantra about what to do if at first you don't succeed
0:12:40 > 0:12:44is well known in the entrepreneurial fraternity.
0:12:44 > 0:12:50Inventor Malcolm Keeling initially came up with an ingenious solution to an age-old DIY problem.
0:12:50 > 0:12:55Rotorad is a new concept for fixing radiators to the wall.
0:12:55 > 0:13:03It allows you to thoroughly clean and when you decorate what you do is release the wires
0:13:03 > 0:13:05and you can decorate with freedom.
0:13:05 > 0:13:10A simple, yet effective idea, but could it make any money?
0:13:10 > 0:13:17- How much have you sold? - Over 2,000 kits. I sell these to the public at £21 plus VAT.
0:13:17 > 0:13:19What would a typical radiator cost?
0:13:19 > 0:13:25- That radiator costs £30, £40. - So you're increasing the price of that radiator by 60%.
0:13:25 > 0:13:28- Yeah.- Don't you think that's a problem?- It's possible.
0:13:28 > 0:13:32Now, true to the mantra, having not succeeded at first,
0:13:32 > 0:13:37Malcolm tried again with an alternative use for his invention.
0:13:37 > 0:13:44It looks exactly like a double radiator, but you can dry clothes at no extra expense, in winter,
0:13:44 > 0:13:50- when you're using your heating. - Malcolm, it's not the prettiest thing, but I can just see Mrs P
0:13:50 > 0:13:56having all the radiators down and drying all the clothes. It's so sensible.
0:13:56 > 0:14:01Sensible maybe, innovative certainly, but sadly Malcolm's business proposition
0:14:01 > 0:14:05- once again began to unravel. - How much have you put into this? - About £200,000.
0:14:05 > 0:14:09- £200,000?- Yeah, yeah.
0:14:09 > 0:14:14- Are you expecting that to come back to you?- If I can build the value of the company up, yes.
0:14:14 > 0:14:19- You keep giving us reasons not to invest.- I don't know what it is.
0:14:19 > 0:14:24Reluctantly, because I quite like you, I've got to say I'm out.
0:14:24 > 0:14:28- Thank you all very much. - Good luck.- Thank you.
0:14:31 > 0:14:35In troubled times, the second-hand economy often flourishes
0:14:35 > 0:14:39and it's there you can find our next entrepreneur, Dominic Ricciardi.
0:14:39 > 0:14:44He thinks his business can expand, but will the Dragons agree?
0:15:13 > 0:15:18Hello. I'm Dominic Ricciardi. I'm here today to look for an investment of £100,000.
0:15:18 > 0:15:25In 1996, I started a company called Caterquip UK. In that time, we've become one of the largest suppliers
0:15:25 > 0:15:29of reconditioned catering equipment. We deal with very large companies,
0:15:29 > 0:15:35from Corus Hotels, McDonald's, Marks and Spencer. The reason is because, as you can see,
0:15:35 > 0:15:39we recondition equipment to a very high standard.
0:15:39 > 0:15:44In the last three or four years, I've realised there's a massive gap in the market,
0:15:44 > 0:15:47so we are looking to roll out a franchise proposition.
0:15:47 > 0:15:52Each franchisee will have a territory of around about 3,500 customers and each customer
0:15:52 > 0:15:56is estimated to spend about £5,000 on their catering equipment.
0:15:56 > 0:16:01That's an average of £17.5 million per territory value of customer spend.
0:16:01 > 0:16:07So I'm looking for £100,000 investment for a 10% share of the new business, the franchisor.
0:16:07 > 0:16:11I'm happy to answer any questions. Thank you very much.
0:16:13 > 0:16:18A fluent pitch from an experienced entrepreneur.
0:16:18 > 0:16:23Dominic Ricciardi wants to spread his business wings and move into the world of franchising.
0:16:23 > 0:16:29To do so, he needs a cash injection of £100,000 in return for a 10% equity stake.
0:16:29 > 0:16:33Deborah Meaden is looking for a little more clarity.
0:16:35 > 0:16:40- Dominic, hello.- Hi.- I'm Deborah. So you've got an existing business. - Yes, I have.
0:16:40 > 0:16:46- It turns in a profit every year? - This year, £170,000.- And you're offering...- A new business, yeah.
0:16:46 > 0:16:53So what's your thinking behind setting up a separate business from the one you've currently got?
0:16:53 > 0:16:59If I explain some background, we supply reconditioned catering equipment.
0:16:59 > 0:17:05As we sell the territories, the inquiries that come through to our office now
0:17:05 > 0:17:11- will eventually be fielded down to the franchises.- OK. I've opened a bit of a can of worms there.
0:17:11 > 0:17:15So it's going to be a separate business that's integrated in the original one?
0:17:15 > 0:17:22- Yes. Two individual businesses. We sell reconditioned equipment. - You don't need to repeat it.
0:17:22 > 0:17:28- But if it works with my money... - Yeah.- ..then you phase out your existing business.- Yes.
0:17:28 > 0:17:32And if it doesn't work, it's OK. You've ring-fenced your £170,000.
0:17:32 > 0:17:37- It's like any other business... - I'm not going to ask any more.
0:17:37 > 0:17:43I'm fascinated to see if any of these other Dragons can see any attractive point in that whatsoever.
0:17:45 > 0:17:51It's a rather frustrating opening exchange. Can the dazed entrepreneur
0:17:51 > 0:17:54regain his footing with Theo Paphitis?
0:17:56 > 0:18:01Dominic, in a business transaction, you've got to have two happy partners.
0:18:01 > 0:18:07Yeah. I can appreciate that, but we haven't even talked about my existing company
0:18:07 > 0:18:12and we could integrate the whole thing. The only reason I've done it this way
0:18:12 > 0:18:18- is because it's a totally new business.- So you've come in with, "I want to sell you this,
0:18:18 > 0:18:24"but actually I want to sell you something else. It's up to you to guess what."
0:18:24 > 0:18:29- That's not business.- Right. - And the investment opportunity
0:18:29 > 0:18:36- is so ridiculous that a man who's been in business how long? - 15 years. It's not ridiculous.
0:18:36 > 0:18:42- I've got to stop you there. You haven't asked the right questions yet.- Haven't I? Good.
0:18:42 > 0:18:48- What's the right questions, Dominic? - You haven't asked anything about the business.- Sometimes in life,
0:18:48 > 0:18:53after you've been in business for a very long period of time, you have a gut instinct.
0:18:53 > 0:18:59When somebody offers you 10% of a new business with all the risk in it,
0:18:59 > 0:19:04you automatically put barriers up and think negatively of that opportunity.
0:19:04 > 0:19:12I look to invest in partnership with people, to work with them in a very honest, transparent way.
0:19:12 > 0:19:18I can appreciate that. That's the way I am. I am very transparent. What's happened is
0:19:18 > 0:19:22Deborah's asked me a question and I've come out with the wrong answer.
0:19:22 > 0:19:28No, hold on a minute. I told you that the sole reason I had no more questions
0:19:28 > 0:19:31- was because I didn't like the existing structure.- OK.
0:19:31 > 0:19:37That would have been a brilliant moment to say, "Don't get hung up on that. We can discuss that."
0:19:37 > 0:19:41I apologise for that, then. Maybe I was a little bit nervous.
0:19:41 > 0:19:48A little humility goes a long way in the Den. Perhaps now Dominic can get his pitch back on track.
0:19:48 > 0:19:53But Peter Jones has concerns of an altogether different nature.
0:19:54 > 0:19:58Dominic, there's something a little bit lacklustre,
0:19:58 > 0:20:04- something not so exciting about the pitch.- It's not a sexy business.- It's not.
0:20:04 > 0:20:08But you've done well. You've got a business, it makes money.
0:20:08 > 0:20:15Let's get into the detail of the franchise opportunity. So what do I pay as a franchisee?
0:20:15 > 0:20:17£41,000 is the franchise cost.
0:20:17 > 0:20:24- And what do they pay on-going, every year?- It's 8% management fee of their turnover, 2% marketing.
0:20:25 > 0:20:30OK. If I'm now signed up, do I get some immediate business from you?
0:20:30 > 0:20:37There's no immediate business, no. What we do is telemarket the area for introductions so they can go in,
0:20:37 > 0:20:44start seeing customers. Plus the first 3-5 franchisees get me, which is a big part
0:20:44 > 0:20:50- because I know the industry... - So if I'm lucky enough to be one of your first five franchisees,
0:20:50 > 0:20:56- it's going to be great.- Great. - And if I'm not...- Well, the idea is that the first five franchisees,
0:20:56 > 0:21:02- we need to get those established. - But you're not offering any real true value here.
0:21:02 > 0:21:06- Right. - Why couldn't I do that myself? - Being 15 years in the industry,
0:21:06 > 0:21:11I've become one of the main people in reconditioned equipment
0:21:11 > 0:21:15and I've emptied my head and built an operations manual like that
0:21:15 > 0:21:22- on how to buy, sell reconditioned... - So how do I buy that one that you've got there?
0:21:22 > 0:21:28- There are a few strategies we use. It's very easy.- Give me an example. - One could be a part exchange.
0:21:28 > 0:21:33Offering part exchange is a strategy that's deployed that you think only you can bring?
0:21:33 > 0:21:39I thought you were going to say, "Look, I've got a deal with a manufacturer
0:21:39 > 0:21:45- "to take and pick up all their refurbished products."- We do. We deal with a lot of manufacturers.
0:21:45 > 0:21:47One big market is B grade equipment.
0:21:47 > 0:21:54- Have you got any exclusive deal with a manufacturer that ring-fences your business model?- No, no.
0:21:54 > 0:21:58But it's very difficult to get into this.
0:21:58 > 0:22:04- It is very difficult. - You know, Dominic, I've got... What? Over 60 kitchens.
0:22:04 > 0:22:10When one of my facilities requires second-hand equipment, they use a local person who does all that.
0:22:10 > 0:22:14- Yes.- Why would they want to buy a franchise? They can just do it.
0:22:14 > 0:22:20- They can just start doing it. - They can, but it's not just reconditioned catering equipment.
0:22:20 > 0:22:27We have new equipment as well, sundry supplies - chefs' whites, crockery, cutlery, plates, forks.
0:22:27 > 0:22:32- Chemical supplies, service and maintenance.- Yep.
0:22:32 > 0:22:38- Oil filtration. - Yep. So which of these couldn't somebody do on their own,
0:22:38 > 0:22:44- rather than buy a franchise from you?- Well, anybody can do anything at the end of the day, I suppose,
0:22:44 > 0:22:48but the most difficult to do is the reconditioned equipment.
0:22:48 > 0:22:54- How much second-hand equipment did you sell last year?- Second-hand only, that's all we did last year.
0:22:54 > 0:22:58- A million pounds.- If all you did was sell reconditioned equipment,
0:22:58 > 0:23:03- you didn't sell any new equipment? - No.- Dominic, how a franchise works
0:23:03 > 0:23:09- is somebody buys a franchise from somebody who's already doing that thing.- Yeah.
0:23:09 > 0:23:15You're going to sell a franchise to someone who's going to pay for something you don't do yourself.
0:23:15 > 0:23:20- That is right. We were... - That's why I'm not going to buy a franchise
0:23:20 > 0:23:25- or be involved with you selling franchises. That's why I'm out.- OK.
0:23:28 > 0:23:33The turbulence in the Den may have eased, but nevertheless Dominic loses his first Dragon.
0:23:33 > 0:23:37And it looks like Hilary Devey has reached a decision, too.
0:23:39 > 0:23:43You cannot franchise. You can't.
0:23:43 > 0:23:49You've got to have brand awareness. You've got to have a database readily available.
0:23:49 > 0:23:55- You mentioned in the beginning that they would have access to 3,500 customers.- Yeah.
0:23:55 > 0:24:01- Where are those 3,500 customers now? - They're not our customers. They're what their territory consists of.
0:24:01 > 0:24:05- So they're not... - Dominic, please. Waken up.
0:24:05 > 0:24:08- Please. For your own sake.- Yeah.
0:24:08 > 0:24:13- Waken up. - I'm going to take it on board. - You have no intellectual property,
0:24:13 > 0:24:16you've no database, no track record.
0:24:16 > 0:24:20Go back, do your homework, get your financial modelling.
0:24:20 > 0:24:26And then you can look these prospective franchisees in the eye and say, "I know it will work."
0:24:26 > 0:24:31- I've got to say I'm out. - Thank you.
0:24:31 > 0:24:36Dominic, I would advise you just don't go down the franchise route.
0:24:36 > 0:24:38It's not a business I can invest in.
0:24:38 > 0:24:43That's the only reason I'm going to say to you I'm out.
0:24:43 > 0:24:48- Dominic, you have a very professional business by the sound of things.- Yeah.
0:24:48 > 0:24:54But I did say earlier that you weren't transparent. We do ask questions.
0:24:54 > 0:25:01That's to find out about them, but you expect people to volunteer things that they think are relevant.
0:25:01 > 0:25:04I can tell you it doesn't cut it for me.
0:25:04 > 0:25:06This is not investable.
0:25:06 > 0:25:09- OK.- I'm out.
0:25:10 > 0:25:14Three Dragons out in quick succession
0:25:14 > 0:25:20and Deborah Meaden is all that stands between Dominic and complete failure in the Den.
0:25:20 > 0:25:25This has probably surprised you, the way this has gone. It shouldn't have.
0:25:25 > 0:25:28- But it did get us off to a bad start.- I think it did.
0:25:28 > 0:25:33- Let's park that to one side.- Yeah. - Actually, I've moved on from that.
0:25:33 > 0:25:37- I'm now looking at the business proposition.- Yeah.
0:25:37 > 0:25:41- You've got a reputation in the industry you're in.- Yeah.
0:25:41 > 0:25:48- You are moving into a new industry and all you've done is trading equipment.- There is another bit.
0:25:48 > 0:25:54Can I jump in very quickly? In 2003, I set up a sister company
0:25:54 > 0:26:01which supplies only new equipment. And last year they did a £4.5 million turnover.
0:26:04 > 0:26:09You didn't think of sharing that with us any earlier?
0:26:09 > 0:26:15I didn't want to complicate it. I made a mess of it talking about two, so throw a third one in...
0:26:17 > 0:26:24- Dominic...- Sorry, Deborah. - I completely accept that this is a hot place in the Den.
0:26:24 > 0:26:26I completely get all of that.
0:26:26 > 0:26:30My advice to you is, if you're right about this,
0:26:30 > 0:26:34do it. Be your own first franchisee.
0:26:34 > 0:26:42The only thing that would convince me to hand you my money would be because you could say to me,
0:26:42 > 0:26:46- "I've done it."- Yeah. - Track record.- Yeah.
0:26:46 > 0:26:49- Whole different ballgame.- I mean...
0:26:49 > 0:26:55- Are you going to be able to tell me you've got a track record in the franchise model?- No, I haven't.
0:26:55 > 0:27:01- I have in a good majority of it. - I won't be investing. I'm out. - Thank you.
0:27:03 > 0:27:08Dominic may not have succeeded in getting investment, but he leaves with sound advice
0:27:08 > 0:27:11from the multi-millionaires.
0:27:17 > 0:27:22Wherever people are struggling to afford high property prices,
0:27:22 > 0:27:27there will always be a market for inventive space-saving solutions.
0:27:27 > 0:27:33Harrogate-based property developer John Tottie and daughter Rosalind had a particularly creative one.
0:27:33 > 0:27:38So we bring the legs down and as you can see, the bed now moves down.
0:27:38 > 0:27:43It's just going to sit above the low-level furniture. There's no need to rearrange it.
0:27:43 > 0:27:50When you've finished, the bed travels back up. You don't even need to make it if you don't want to.
0:27:50 > 0:27:54This isn't the product you'd expect a multi-millionaire to seek out,
0:27:54 > 0:28:00- but Hilary Devey had a surprising familiarity with the market. - Hasn't this been done before?
0:28:00 > 0:28:07There's a French and German version. That originally inspired us, but this is £3,250 plus VAT,
0:28:07 > 0:28:13- which is half the price of our highest competitor. - Have you sold any?- Not yet.
0:28:13 > 0:28:20Early days perhaps, but when aiming at a budget market, entrepreneurs mustn't price themselves out of it.
0:28:20 > 0:28:23What's the cost of pull-down beds?
0:28:23 > 0:28:28I think they range from hundreds up to about £500. Obviously, ours is a lot more expensive.
0:28:28 > 0:28:34I think this is probably better, but your market doesn't want better.
0:28:34 > 0:28:36- The market wants...- Cheaper.
0:28:36 > 0:28:40- So I won't be investing, I'm afraid. - Thank you.- I'm out.
0:28:40 > 0:28:44- Thanks for your time.- Good luck, guys.- So no investment this time,
0:28:44 > 0:28:49but despite that, one Dragon couldn't resist a closer look.
0:28:58 > 0:29:05So far tonight, the Dragons have yet to find an entrepreneur or business they think worthy of investment.
0:29:05 > 0:29:09You've represented yourself well, but I can't invest.
0:29:09 > 0:29:13For an exclusive behind-the-scenes look at how Dragons' Den is made,
0:29:13 > 0:29:18press the red button at the end of the programme.
0:29:19 > 0:29:25Lots of entrepreneurs dream of coming up with a great idea that shakes up an existing market,
0:29:25 > 0:29:27a so-called disruptive technology.
0:29:27 > 0:29:32Is that what Matthew Page and Louise Craven have come up with?
0:29:50 > 0:29:57Hello. My name is Louise. I'm the account manager at Synergy. This is Matthew Page, the director.
0:29:57 > 0:30:01We're looking for an investment of £95,000 in exchange for 20% equity.
0:30:01 > 0:30:06We have developed a patent-pending hand tool.
0:30:06 > 0:30:12Our design is simple. It is based on two handle parts which join together to clamp a variety of heads.
0:30:12 > 0:30:18At the outset, we propose paintbrush heads, stripping knives and filling knives.
0:30:18 > 0:30:23Matthew will now provide you with a quick demonstration of how the system works.
0:30:23 > 0:30:29It's very easy. Just as a common product would do - you fill and repair a crack in the surface.
0:30:29 > 0:30:36By changing the product head, we could replace this with a number of different products.
0:30:37 > 0:30:39So...
0:30:45 > 0:30:48Just grab the paint...
0:30:50 > 0:30:56Just as you would paint with a regular paintbrush, you can do exactly the same
0:30:56 > 0:30:59with this product.
0:30:59 > 0:31:03For the consumer, this offers superior quality at a great price.
0:31:03 > 0:31:09For retailers, it offers environmentally-friendly innovation with compact store merchandising
0:31:09 > 0:31:14and for Dragons it's an opportunity to lead in a large market.
0:31:14 > 0:31:17We welcome any questions you may have.
0:31:20 > 0:31:25Annual sales in the UK DIY market are worth over £7 billion
0:31:25 > 0:31:29and Nottinghamshire-based couple Matthew and Louise want a slice of that pie.
0:31:29 > 0:31:35They need £95,000 to launch their new, versatile decorating tool.
0:31:35 > 0:31:39Duncan Bannatyne wants to get straight to business.
0:31:39 > 0:31:45Matthew, what does it cost for an ordinary paintbrush with a wooden handle, like the one in your hand?
0:31:45 > 0:31:49It really varies significantly on the quality of the filament.
0:31:49 > 0:31:57Some sell for up to £25. Equally, you can go into B&Q and buy a pack of ten for £5.
0:31:57 > 0:32:01So if I wanted to buy five brush heads and one handle off you,
0:32:01 > 0:32:06- what would that cost me?- The most popular brush size is a two-inch.
0:32:06 > 0:32:10They would range from around £6.48 through to £10.
0:32:10 > 0:32:14From you? I'm asking about your product.
0:32:14 > 0:32:20- Five brush heads and a handle. What would it cost me? - I can give you the single...
0:32:20 > 0:32:27The landed cost price is £1.35. The wholesale price for that is £2.67
0:32:27 > 0:32:31and the retail price would be £8. To put it into perspective,
0:32:31 > 0:32:37- the refill would retail at £4. - Well, I'm very confused about what it would cost me now.
0:32:37 > 0:32:42So are you saying that the handle fits one size only
0:32:42 > 0:32:46- or does it fit five different brush heads?- Yeah, exactly.
0:32:46 > 0:32:52No, which? It's a question. The answer is it's one size only or it fits five different sizes.
0:32:52 > 0:32:55It fits a variety. That's one of the unique selling points.
0:32:55 > 0:33:02If it's for five different widths, you must be able to tell me what you sell the handle and five heads for.
0:33:02 > 0:33:08I think we could put it into a mass retailer from probably about £8.
0:33:09 > 0:33:16- For five heads and one handle?- Yes. - You can do it that cheap? - Absolutely.
0:33:16 > 0:33:19We can hit some really attractive price points.
0:33:20 > 0:33:26Not the most comfortable start for the duo, but they managed to remain calm under some awkward questioning.
0:33:26 > 0:33:31However, Peter Jones thinks he has spotted a flaw in the concept.
0:33:32 > 0:33:38I've watched the guys that come round to my house to do decorating and this would drive them mad.
0:33:38 > 0:33:44When I've watched them paint, they've got several brushes in different widths.
0:33:44 > 0:33:50When they're brushing away and they want to do a small bit, they pick up a small brush
0:33:50 > 0:33:54and then they do cutting in. And then they put that away.
0:33:54 > 0:34:00If you've got to take, each time they do that, unscrew something, then put this next one on,
0:34:00 > 0:34:04then screw it up... This is making it a bit of a hassle.
0:34:04 > 0:34:10What we've tried to do here is what Gillette has done to the razor blade market...
0:34:10 > 0:34:14- I don't have to unscrew a razor blade.- But...- It's click and go.
0:34:14 > 0:34:19- This is...- I think what might be worth noting is this is the initial prototype
0:34:19 > 0:34:25and the amount of times you need to unscrew the thumbscrew is way too many compared to what we'll achieve
0:34:25 > 0:34:28in the final production type.
0:34:28 > 0:34:33Em...I'm not sure we're actually going down the right lines here.
0:34:33 > 0:34:37Assuming that you did have a requirement for three types,
0:34:37 > 0:34:44why wouldn't you buy three handles, three heads and your saving follows on from there.
0:34:44 > 0:34:49When they go, you just replace...the head.
0:34:49 > 0:34:54That gets you round the fiddly bit and still saves you money.
0:34:54 > 0:34:58It's not one handle. It's one handle per size of brush.
0:34:58 > 0:35:00Yes, exactly.
0:35:00 > 0:35:06No, that wasn't what you pitched. You were very careful to pitch and to demonstrate
0:35:06 > 0:35:13that actually you only need one handle for a multitude of different brush heads and product heads.
0:35:13 > 0:35:15Theo's just given you an out.
0:35:18 > 0:35:26Rescued by one Dragon, interrogated by others, Matthew and Louise are not getting an easy time in the Den.
0:35:26 > 0:35:30Now Hilary Devey has questions of her own.
0:35:30 > 0:35:34- Have you a business plan? - Yes.- Yes.
0:35:34 > 0:35:39- And have you sold any of this product?- No. Currently, we don't sell this product.
0:35:39 > 0:35:45At the moment we sell decorating equipment, paintbrushes, roller sets into the UK market
0:35:45 > 0:35:47for Europe's leading manufacturer.
0:35:47 > 0:35:53But there's a natural break clause in that contract at the end of this year, which lets us do this product.
0:35:53 > 0:35:58- So you're prohibited from operating currently?- For a few more months.
0:35:58 > 0:36:02It's essentially a start-up model, but we do have a lot of interest
0:36:02 > 0:36:07- from the mass DIY market. - But you've not actually done it?- No.
0:36:07 > 0:36:13So what you're saying is do we want to invest in a handle that we can then hope B&Q will buy
0:36:13 > 0:36:19in the hundreds of thousands and we'll all sit back and become richer.
0:36:25 > 0:36:30Louise, Matthew, hi, I'm Deborah. Can we just talk a little bit about this market?
0:36:30 > 0:36:37I actually...I think really your selling point on this is more to do with the environment.
0:36:37 > 0:36:42Yeah. On that point, what we did is the patent we applied for in the UK
0:36:42 > 0:36:48is on the green patent scheme, so it's accelerated because of the environmental benefits.
0:36:48 > 0:36:55- It should go to grant in just a few weeks' time now.- So that's a big part of your play.- Yes.- Yes.
0:36:55 > 0:36:57I think there is a problem.
0:36:57 > 0:37:04Whilst it might be environmentally better, people are incredibly lazy.
0:37:04 > 0:37:10You get a job, you paint a door, chuck it away. That's it. I'm not saying that'd right.
0:37:10 > 0:37:15I personally think that's better. I don't think the mass market does.
0:37:15 > 0:37:20It does have that ease there, especially for a DIYer.
0:37:20 > 0:37:26But it's not easier. That's the point. It's not easier. So I applaud the environmental side.
0:37:26 > 0:37:32The trouble is with it, if people don't want to buy it, it'll sit on the shelf
0:37:32 > 0:37:38against the current way of buying paintbrushes. I'm not going to be investing, so I declare myself out.
0:37:38 > 0:37:42- Thank you.- Thank you. - Matthew, Louise,
0:37:42 > 0:37:47I still go back to my original instinctive feeling.
0:37:47 > 0:37:54I don't get the convenience factor and I'm not buying into the cost of the product.
0:37:54 > 0:38:00So you haven't sold it to me. I'll let you negotiate with the other Dragons and declare myself out.
0:38:03 > 0:38:09Forlorn or just relieved? Either way, the couple now know they must focus their efforts
0:38:09 > 0:38:12on the three remaining Dragons.
0:38:12 > 0:38:18This company that you sell their products at the moment, how big are they?
0:38:18 > 0:38:23- They do 200 million euros. - Quite a big company, then.
0:38:23 > 0:38:30- In paintbrushes, very big. - Let's just suppose for a minute that they have a board of directors
0:38:30 > 0:38:35and the board of directors get wind of what you're doing and they say,
0:38:35 > 0:38:41"I'm not happy with this. These people are going to stop and sell a competitive product
0:38:41 > 0:38:44"and have applied for a patent. What'll we do about it?"
0:38:44 > 0:38:47And they say, "Let's crush them.
0:38:47 > 0:38:52"Let's put every objection we can in against their patent. Let's crush them like worms."
0:38:52 > 0:38:59- On what grounds can they object? - Yeah.- They can only object if it infringes one of their patents.
0:38:59 > 0:39:04- Which it doesn't.- You can't say, "I don't like Matthew and Louise, so I'll object to crush you."
0:39:06 > 0:39:10I used to be a director of the UK subsidiary of their business.
0:39:10 > 0:39:15I had dinner with the owner of the business last December and one thing he spoke about
0:39:15 > 0:39:22- was to consider trading on our own account.- Did you say to him, "OK, Mr £200 Million A Year Turnover,
0:39:22 > 0:39:28"I am going to start in business, but I won't buy your product. I'll make a better product
0:39:28 > 0:39:33- "and I'm going to take your business"? You didn't say that. - Well, first of all...
0:39:33 > 0:39:37- Did you say that to him?- Sorry? They're fully aware of this product
0:39:37 > 0:39:43and where it sits in the market, but they're not actually in this space that we're targeting.
0:39:43 > 0:39:50Either they sell paintbrushes, and that's a paintbrush, or they don't. That's in their market.
0:39:50 > 0:39:56- Right.- And they will take it personally. I'm not going to invest in you, so I'm out.
0:39:58 > 0:40:01Let me tell you where I'm at.
0:40:01 > 0:40:05I think there's too many issues that could arise from this.
0:40:05 > 0:40:10I think the board will react if you launch this product. Most certainly.
0:40:10 > 0:40:14And I certainly wouldn't want to take that risk.
0:40:14 > 0:40:18And therefore I've got to say I'm out.
0:40:18 > 0:40:20THEO: So, just me.
0:40:20 > 0:40:26I'm not worried about the fact that you're doing this and they're going to crush you.
0:40:26 > 0:40:30You made it clear they do know and everything else.
0:40:30 > 0:40:37My concern is they're a big company that know their market and they've said,
0:40:37 > 0:40:39"Eugh, actually...
0:40:41 > 0:40:47- "No." Now that's my worry. - They haven't said no. They're still considering it.
0:40:47 > 0:40:54- They have our heads of terms and a licensing agreement right now... - You've sent them that?- Yeah.
0:40:54 > 0:41:00They said they're very interested in it and need a couple more weeks.
0:41:02 > 0:41:07All right. I like the product. I've liked it from the minute you came in.
0:41:07 > 0:41:11It's tactile, it's good and everything else,
0:41:11 > 0:41:16but I don't know if this concept is viable
0:41:16 > 0:41:21and you're asking for nearly 100,000 quid, which is a rather large punt to take
0:41:21 > 0:41:24just on a gut feel.
0:41:24 > 0:41:28And I hope I'm going to regret what I'm going to say.
0:41:30 > 0:41:33It's not for me. So I'm going to say I'm out.
0:41:33 > 0:41:40- Thank you. - Divided opinion about the product and the business among the Dragons,
0:41:40 > 0:41:45but the end result is the same - Matthew and Louise leave with nothing.
0:41:51 > 0:41:57Others who tried and failed in the Den included business partners Darren Smith and Richard Booth
0:41:57 > 0:42:02who hoped to convince the Dragons to invest in their energy-boosting enterprise.
0:42:02 > 0:42:04They wanted £50,000.
0:42:04 > 0:42:07Boost oxygen is 10 litres
0:42:07 > 0:42:10of 99%-pure oxygen in a can.
0:42:10 > 0:42:14It can help improve performance, concentration and recovery.
0:42:14 > 0:42:18Our vision is to be the next Red Bull.
0:42:18 > 0:42:23As you might expect, we don't recommend fooling about with pressurised cylinders,
0:42:23 > 0:42:30but these multi-millionaires have never been ones for following instruction.
0:42:31 > 0:42:33HIGH-PITCHED: Hello. How do you do?
0:42:33 > 0:42:41When order was finally restored, the Dragons had a little difficulty grasping the concept.
0:42:41 > 0:42:45- You're trying to sell me air? - We are selling you oxygen.
0:42:45 > 0:42:50- I'm more interested, frankly, in whether this helps with hangovers. - The short answer is yes.
0:42:50 > 0:42:53OK. I think I'm in.
0:42:53 > 0:42:58Jokes aside, selling an invisible product to these business leaders is never easy.
0:42:58 > 0:43:02Canned oxygen's not new. So what makes you think you can sell it
0:43:02 > 0:43:06when people who spent fortunes on this couldn't?
0:43:06 > 0:43:10The way the sports drinks market has really taken off, 20 years ago...
0:43:10 > 0:43:13It's not the same as a sports drink.
0:43:13 > 0:43:19It's a bit like buying the Emperor's new clothes. You don't know if it's empty or full... I don't get it.
0:43:19 > 0:43:21- So I'm out.- Thank you.
0:43:21 > 0:43:28Driving instructor Craig Ramshaw was next into the Den with an idea to reduce the number of car accidents
0:43:28 > 0:43:33- caused by legitimate teenage drivers.- Teen Drive is a driving school for over 14s.
0:43:33 > 0:43:38The ultimate aim is to put a more safety-conscious driver onto the roads at 17.
0:43:38 > 0:43:42Hard to argue with the aspiration, but would the numbers back it up?
0:43:42 > 0:43:50- How much have you made? - Right, the first full accounts show a turnover of £28,500.
0:43:50 > 0:43:56We're nearing the end of the next tax year. It's probably in the region of £30,000 turnover.
0:43:56 > 0:44:01- What's your projections, Year Three? - I'm going to project £220,000.
0:44:01 > 0:44:05- How are you going to manage that? - Basically, with strong marketing.
0:44:05 > 0:44:10Not a strong enough answer for the Dragon investors, so no cash,
0:44:10 > 0:44:14but Craig did at least leave with some words of encouragement.
0:44:14 > 0:44:19I think this is a really good thing and it could make a real difference.
0:44:19 > 0:44:22- Yeah.- But it feels like a social enterprise.
0:44:22 > 0:44:26For me, it's just not an investment, Craig. It doesn't mean stop
0:44:26 > 0:44:32- because you're doing important stuff, but I won't be investing. I'm out.- Thank you very much.
0:44:35 > 0:44:40You're an entrepreneur, pitching to the Dragons. How much equity do you offer them at what price?
0:44:40 > 0:44:46You don't want to sell your company too cheap, but you want to be credible. It's a dilemma
0:44:46 > 0:44:52our next entrepreneur has been grappling with. Mark Richardson from Cheshire.
0:45:18 > 0:45:24Hello. My name's Mark Richardson and I'm here today looking to secure £100,000
0:45:24 > 0:45:30in return for a 40% stake in my company, Bionic Glove Technology Europe Ltd.
0:45:30 > 0:45:36Bionic gloves were invented by Dr Jim Kleinert, a leading US orthopaedic hand surgeon.
0:45:36 > 0:45:41What Dr Kleinert knows is your hand is not flat. It's made of several natural peaks and valleys.
0:45:41 > 0:45:45He's developed a pad system which serves to smooth those out.
0:45:45 > 0:45:49That dramatically cuts down the risk of getting blisters and calluses.
0:45:49 > 0:45:56The product is fully patented and protected and our customers also tell us that our gloves last
0:45:56 > 0:46:02between two and three times longer than conventional gloves. I've been selling bionic golf gloves in the UK
0:46:02 > 0:46:07for the last four years, during which time I've sold over 150,000 units
0:46:07 > 0:46:11and generated over £1.2 million of revenue.
0:46:11 > 0:46:17Based on that success, I've now been given the exclusive distribution contract throughout Europe.
0:46:17 > 0:46:22The challenge now is to explain the technology to 4.3 million registered golfers,
0:46:22 > 0:46:298.5 million gardening enthusiasts, not to mention countless numbers of people that use the gym weekly.
0:46:29 > 0:46:34I look forward to taking any questions, but first of all I'd like to demonstrate the product to you.
0:46:34 > 0:46:37- Peter?- I'd love to do it.
0:46:40 > 0:46:44A professional pitch from Macclesfield-based Mark Richardson.
0:46:44 > 0:46:50In order to reach more glove-wearing customers, he needs a £100,000 investment.
0:46:50 > 0:46:54On offer is a hefty 40% of his orthopaedic hand protection range.
0:46:56 > 0:47:01- Very good. - Having tried it for size, what will Peter Jones make of it all?
0:47:04 > 0:47:10- Mark, I think the glove is very good.- Thank you. - How big is Bionic?
0:47:10 > 0:47:16- What was their last year's revenue? - The revenue for Bionic last year was 11 million.
0:47:16 > 0:47:21It's part of a bigger group within the US.
0:47:21 > 0:47:25The overall group is around about 120 million.
0:47:25 > 0:47:31- And you mentioned that you've now got an exclusive contract for distribution in Europe.- Yes.
0:47:31 > 0:47:37- When was that signed and how long does that last for? - Er, that was signed in April
0:47:37 > 0:47:43and that extends for five years. If everything is adhered to, there's an automatic renewal of five years.
0:47:43 > 0:47:47And what sales targets do you have to hit to retain that contract?
0:47:47 > 0:47:52It's just 15,000 units. That's the minimum purchase requirement.
0:47:52 > 0:47:56Last year we sold just under 50,000 units.
0:47:56 > 0:47:58I'm not worried about the minimums.
0:47:58 > 0:48:05- So Mark...- Hilary. - ..what you really have then is a master licence agreement.
0:48:05 > 0:48:10- Yes, it is.- Could I have a look at it, please?- Certainly, Hilary.
0:48:11 > 0:48:15Unfazed by quick-fire questions, Mark has a good start.
0:48:15 > 0:48:22Now a begloved Duncan Bannatyne wants to drill down into the business itself.
0:48:23 > 0:48:27You said you had taken £1.2 million-worth of revenue...
0:48:27 > 0:48:32- Since 2008, yeah. - OK. And what were you selling then?
0:48:32 > 0:48:36It was just golf. Just the golf glove and just in the UK.
0:48:36 > 0:48:43- How were you selling them? Were you...?- It was a combination of me through major high street retailers
0:48:43 > 0:48:49who specialise in golf, then we have nine self-employed independent sales agents who cover the golf clubs.
0:48:49 > 0:48:54OK. So what's your projection going forward?
0:48:54 > 0:49:01Projecting £500,000 revenue for this year and a net profit of £100,000.
0:49:01 > 0:49:07I'm expecting revenues to start to increase significantly over the next couple of years.
0:49:07 > 0:49:11So in 2013 I'm projecting £1.3 million.
0:49:11 > 0:49:15A net profit of £150,000.
0:49:15 > 0:49:20And then in 2014 revenue of £1.6 million
0:49:20 > 0:49:23and a net profit in the region of £180,000.
0:49:23 > 0:49:26Mark, a big jump.
0:49:26 > 0:49:33Tell me why it's going to go up so dramatically when you've been selling it for four years.
0:49:33 > 0:49:39Because I've now got distributors throughout Europe. In Sweden, Austria, Germany and Italy.
0:49:39 > 0:49:45I didn't have any this time last year. I have a meeting with 16 distributors.
0:49:45 > 0:49:50The first distributor I've got on board has already given me orders worth 30,000.
0:49:50 > 0:49:54So I think the potential is actually fantastic out in Europe
0:49:54 > 0:50:01and it's starting to go extremely well. I think we could be a multi-million-pound business.
0:50:03 > 0:50:07Ambitious expansion plans and plenty of interest already.
0:50:07 > 0:50:11Things seem to be going well for the assured entrepreneur,
0:50:11 > 0:50:17but what of his licence agreement? Hilary Devey has been studying it intently.
0:50:18 > 0:50:19Mark...
0:50:22 > 0:50:27I can't find anywhere in here where it extends
0:50:27 > 0:50:33- your licence for five years. - It extends... Was it not opened up on that page?
0:50:33 > 0:50:36Can I...? Sorry.
0:50:37 > 0:50:45OK. Can I read you the...? "The agreement shall last for five years beginning from the effective date.
0:50:45 > 0:50:51"The agreement will automatically renew in five-year increments based on mutual agreement of both parties
0:50:51 > 0:50:57- "and the terms of the contract." - And that deals with the five-year extension?- Yes.
0:50:57 > 0:51:03But it doesn't, does it? Mutual agreement. The other side can mutually not agree.
0:51:03 > 0:51:10- No, and I am aware of that and... - I really think you need to tighten that up.- OK.
0:51:10 > 0:51:16You need to be saying to them, "What is expected of me? What can you terminate under?
0:51:16 > 0:51:20- "And what right of redress do I receive?"- OK.
0:51:20 > 0:51:23As a master licence agreement, it's very, very open.
0:51:23 > 0:51:26I would not have signed that.
0:51:26 > 0:51:30- OK.- And I think you're absolutely wide open.
0:51:30 > 0:51:34That's a shame because you are so enthusiastic about this glove.
0:51:34 > 0:51:41I think I've coupled the contract with the sentiment and experience of dealing with these people.
0:51:41 > 0:51:46- Well, I would say you need to get your admin right first.- Yeah.
0:51:46 > 0:51:51- Before you start looking for investment.- OK, good feedback. I'll certainly do that.
0:51:51 > 0:51:56It's not an investment for me and I've got to say I'm out.
0:51:57 > 0:52:03A major setback for the passionate businessman as he loses his first Dragon.
0:52:03 > 0:52:07Will Peter Jones share his rival's view?
0:52:08 > 0:52:13Mark, I keep looking at the business and the model
0:52:13 > 0:52:17- and you are ultimately a sales agent.- Yes.
0:52:17 > 0:52:22Whilst that doesn't mean that you can't have a successful business,
0:52:22 > 0:52:28I have a very different thought process when it comes to strategy and investment
0:52:28 > 0:52:34- with things such as this.- Yes. - And ultimately I just don't want to invest in something
0:52:34 > 0:52:37that we can't control, own,
0:52:37 > 0:52:42look for economies of scale further down the line, bring out our own products,
0:52:42 > 0:52:46- so that's the reason, and the only reason, why I'm out.- Thank you.
0:52:47 > 0:52:51- Mark, tell me what the turnover was last year.- Last year,
0:52:51 > 0:52:55we're looking at a revenue of around £394,000.
0:52:55 > 0:52:59With a net profit of around about £79,000.
0:52:59 > 0:53:05- And are you taking a wage? - I take a dividend out of the business.
0:53:05 > 0:53:10- So in a normal situation you would take a wage.- Yes. - £30,000 a year or something.- Yes.
0:53:10 > 0:53:17- So your profit would be £40,000 after wages.- Yep.- It's a lifestyle business and a great one for you,
0:53:17 > 0:53:25- but this is not a business that anybody can invest in and get a return.- OK.
0:53:25 > 0:53:28Unfortunately, Mark, I'm out.
0:53:31 > 0:53:35Two more Dragons out. Mark's investment hopes are looking slim.
0:53:35 > 0:53:38And Theo Paphitis seems to have made up his mind, too.
0:53:42 > 0:53:49Mark, some things come in the Den that we might not have direct business links to,
0:53:49 > 0:53:55- but we have a passion for - a hobby, a love, something that tickles us, floats our boat.- Sure.
0:53:55 > 0:54:00- And golfing is not something I've got a particular passion for.- Sure. - Or gloves.
0:54:00 > 0:54:07And that might not be, Theo. I need your help in giving it some profile. I can do the rest.
0:54:07 > 0:54:13I've got the passion for the gloves, for the brand. I've got the passion for taking it to market.
0:54:13 > 0:54:18I've actually got it into a major high street retailer this week.
0:54:18 > 0:54:23- Who's that, by the way? - It's Argos.- Right.
0:54:23 > 0:54:29- And how many are they taking? - They're taking the golf range, gardening, fitness.
0:54:29 > 0:54:34So I'm very excited about that, but that was hard work, Theo. It was hard work.
0:54:34 > 0:54:41Listen, I'm not against hard work, but if somebody with your contacts can get in,
0:54:41 > 0:54:45- then I can do all the legwork behind.- OK...
0:54:45 > 0:54:50There's something about you. You're tenacious, you don't accept no for an answer.
0:54:51 > 0:54:57- You have got a huge enthusiasm for a...- For a glove.- ..for a glove!
0:54:57 > 0:55:01I've never seen anyone so excited about a glove!
0:55:01 > 0:55:06My concern is the brand value that you build up
0:55:07 > 0:55:11- is hampered.- Mm-hm.- Because you've got somebody else's product.
0:55:11 > 0:55:16And it very much relies on a contract which I haven't even read.
0:55:16 > 0:55:23Theo, it's a good point you've raised. We've run through it with my lawyers, they seem very happy.
0:55:23 > 0:55:30I know the people well, I trust them. There is nothing in there that I'm concerned about.
0:55:33 > 0:55:36I tell you what I'm going to do.
0:55:36 > 0:55:43I'm going to do something when you came in I never thought for one minute I'd even consider.
0:55:46 > 0:55:49And that is...
0:55:52 > 0:55:54to offer you
0:55:55 > 0:55:58part of the money.
0:55:59 > 0:56:02As a punt. On you.
0:56:04 > 0:56:06OK.
0:56:06 > 0:56:08So I'll offer you £50,000
0:56:10 > 0:56:13for 20%.
0:56:16 > 0:56:24A dramatic turnaround in fortune, but an offer for half the amount in the Den is not enough.
0:56:24 > 0:56:29Mark must receive all the money he's asking for or leave with nothing.
0:56:29 > 0:56:31And only Deborah Meaden remains.
0:56:31 > 0:56:37Mark, can I just ask you which bit is actually the patentable bit?
0:56:37 > 0:56:42- There must be something specific about these...- It's the way the pads are configured,
0:56:42 > 0:56:46within the flex points of the fingers and the palm of the hand.
0:56:46 > 0:56:51And the other hope, Deborah, is that within the contract that I've got,
0:56:51 > 0:56:58I've got the ability to sub-license the product, so to somebody making gloves it could be added value.
0:56:58 > 0:57:04- OK. I think the single biggest issue for me is that we have a licensed product...- Yes.
0:57:04 > 0:57:09..and there isn't that exit strategy. So building that brand
0:57:09 > 0:57:15leads to profit. It doesn't lead to building value in the business, which we can realise later.
0:57:16 > 0:57:21And, actually, you knew that problem because you pitched at a good rate.
0:57:21 > 0:57:24You said £100,000 for 40%.
0:57:29 > 0:57:31I'm...
0:57:31 > 0:57:33I'm going to match Theo's offer.
0:57:36 > 0:57:40OK. Well, thank you. I'd like to accept that offer.
0:57:40 > 0:57:44- Mark's done it.- Thank you, Theo. Thank you very much.
0:57:44 > 0:57:50- Thank you, Deborah.- Excellent. - It's rare to see licensed products get investment in the Den,
0:57:50 > 0:57:56but his success proves the Dragons won't pass on a money-making opportunity, whatever the business.
0:58:05 > 0:58:11I don't remember many entrepreneurs notching up successes in the Den with licensed products,
0:58:11 > 0:58:14which makes Mark's success today all the more impressive.
0:58:14 > 0:58:19Now Deborah and Theo have given him licence to grow his business
0:58:19 > 0:58:22and make money for them and himself, too.
0:58:22 > 0:58:27If you press the red button now, you can get an exclusive insight
0:58:27 > 0:58:32into why the Dragons were so keen to invest in Mark. Goodbye.
0:58:32 > 0:58:33Next week in the Den:
0:58:33 > 0:58:38If you'd have invented baked beans, you wouldn't have sold them!
0:58:38 > 0:58:42It's great to be passionate, but you also have to be honest.
0:58:42 > 0:58:46How difficult was it to design a piece of cardboard with holes in it?
0:58:46 > 0:58:48- BEEP - Your food's ready.
0:58:48 > 0:58:52I was about to say I won't make an offer, but you're very good.
0:58:52 > 0:58:56- Did you never take any risks, Theo? - Oh, my God!- Amazing.
0:58:56 > 0:59:01I'll offer you exactly what you've asked for.
0:59:15 > 0:59:17Subtitles by Red Bee Media Ltd