Episode 10 Dragons' Den

These are the Dragons - five of Britain's wealthiest and most enterprising business leaders.

Over the coming weeks, they'll make or break the dreams of dozens of budding entrepreneurs.

I've opened a can of worms there.

I would not have signed that.

That wasn't what you pitched. Theo's given you an out.

I'm not happy with this.

The multi-millionaire investors have each built up their fortunes from scratch.

Retail magnate Theo Paphitis.

Hotel and health club owner Duncan Bannatyne.

Leisure industry expert Deborah Meaden.

Queen of logistics Hilary Devey.

And telecoms giant Peter Jones.

The Dragons have the credentials, the contacts, the commitment and the cash ready to invest,

but only in the right business.

Will any of these hopeful entrepreneurs walk away with their money?

Welcome to the Dragons' Den.

Here, as always, we have our five multi-millionaire Dragons

who are all equal opportunity investors.

They'll give an opportunity to any entrepreneur who is equal to the task of selling a good product

at a healthy profit. A few will secure the Dragons' cash.

The others will leave with nothing.

Our celebrity-obsessed culture is much maligned,

but our first entrepreneur, Steven Charrot, thinks he's found a way to cash in on it.

Will the Dragons agree?

PAPARAZZI SHOUT

Hi there. My name's Steven Charrot. I'm the managing director of Dayfame Luxury VIP Experiences.

I'm here today pitching for £100,000 for a 30% share of my company.

Celebrity status, for most of us, it's a distant dream.

A fantasy so far-fetched from reality it's hard to even imagine. That is until now.

Imagine stepping out of a Rolls Royce onto the red carpet at one of London's best clubs

to the sound of photographers shouting your name. After posing for some photos,

personal security escort you inside. No queues, no entry fee.

Straight to your VIP table where your drinks are waiting.

This is just a taste of one of our unique, tailor-made experiences. In the short time we've been trading

we've sold over 500 celebrity experiences, provided over 1,500 guests to venues across London,

we've created a brand capable of attracting a huge level of customers

and we feel we're now ready to take the business to the next step. Thank you very much for your time.

I look forward to speaking to you all and hopefully working with at least one of you.

An attention-grabbing pitch from South London-based Steven Charrot,

but then that is the whole point of his business.

He needs a £100,000 investment to grow his celebrity experience company.

It's a sector Peter Jones knows well.

-Steven. How much is the experience?

-We have the gold, platinum and diamond experiences.

The gold one starts at around £199, the diamond is about £1,500.

We've tried to gain the exclusive rights to the venues we work with.

-You know, the best ones in the West End.

-Give me an idea, then.

-Who do you work with?

-Basically, when we first started doing this,

we got all the venues on board. Because we hadn't hosted with them, we couldn't get exclusive rights...

-OK, but have you got an exclusive with some of them?

-Yeah, but what we're actually working on

-is the largest chain we work with is one you've all heard of.

-Right.

-They do all the West End clubs.

-I'm meeting them...

-OK, what have you turned over in the last year?

We've turned over £85,000.

-And what's been your gross profit?

-About £40,000.

-And your net profit?

-Just over £20,000.

-So you've only got, for a full year, £20,000-worth of costs?

-I'll explain why.

We've sold primarily through daily deal sites such as Groupon...

-Sorry to cut across you, but...

-Sorry.

-I'm trying to get across that your total costs are £20,000

-to include salaries, everything.

-Well... Sorry, I'll go on to say

we've got our fixed costs so low so we can host these events very cheaply.

-But how have you got those costs down?

-Because we can host up to six experiences

on a Friday night and six on a Saturday. They generate good profit.

The rapid questions garner some faltering responses,

but Steven's passion is clear. How will he fare under the scrutiny of Duncan Bannatyne?

-How did you come up with this idea?

-It was when I was in Miami.

When I was stood outside a club, in the queue,

and a Lamborghini pulled up and this big guy jumped out

and walked straight in, bypassed the queue. Everyone felt the same way,

staring at him, like, "Wow! I wish I was THAT guy!"

-The seed was planted.

-You're selling this through Groupon. Did you approach Red Letter Days?

-We also sell through Virgin Experiences, which are the...

-You sort of avoided my question.

You have a habit of doing that. Let me finish the question first.

-Did you approach Red Letter Days, buyagift.com or any others?

-Yeah. Not Red Letter Days,

-but quite a few others, yeah. But...

-How much discount do you give Groupon?

We actually gave them 80%.

-On the website.

-On an experience that was £500, which Groupon were...

-Hold on.

-So on a £500 experience, you gave 80% off?

-Yeah. No... I think it was 90% off.

But I was quite clever with the way I did it because that included the standard experience.

On top of that, they could buy a VIP table. We get given... The clubs are very good with us.

-They give us free tables.

-So have you made any money from doing Groupon?

-Yeah, yeah, yeah.

Absolutely. But also we didn't do the celebrity experiences with them.

-We did the luxury boat cruises.

-The Dragons look bemused by Steven's rather scattergun approach.

Can Hilary Devey bring more focus to the young entrepreneur's pitch?

-What do you need 100 grand for?

-Em, so there's £21,000 for marketing and advertising.

We've created a brand capable of attracting a huge level of customers.

The main thing we've been missing is the ability to get our name out there

-without daily deal sites.

-Steven, I asked you a question.

Please.

-Just answer the question.

-OK. Another £21,000 would be for office and studio rent in Central London.

What that would enable us to do is launch a whole new range of under-18 experiences as well.

They can get a limo to the studios, they get papped on their way in,

-they can film a Dayfame documentary, talking to the camera...

-Has he answered your question?

-That is what I need the money for.

-Do you know, Steven,

I'm really sorry cos I think you're lovely, but you'd drive me mad. You're making my foot itch

and my ears itch. I won't be investing in you today, so I'm out.

Frustration results in a first blow for the enthusiastic businessman.

Theo Paphitis has direct knowledge of this market.

Can he be convinced that Steven is worth backing?

You are describing... a traditional experience business

and nothing else. There is nothing specifically different in this.

But there's a much bigger picture. It's the membership.

There's a Dayfame membership. Rather than just a one-off event,

you actually pay £39 a month and you get free entry into venues,

you get queue jump, but also on top of that

every two weeks there's the Dayfame Showcase where we open up one of the clubs we work with

-an hour earlier than normal. They also get an hour's free drinks.

-Right. OK.

So basically we're back to where we started from. It's an experience.

-It just revolves around clubs.

-Not just clubs. Restaurants.

The Romance Experience... They are all experiences.

-It's an experience.

-You get your pictures from every event,

-people love memories and walking down the red carpet.

-Steven...

-It's put a smile on so many faces.

You're hugely enthusiastic and you're also bright.

-That's clear.

-Can I be honest? One thing I've done is...

-Can I just stop you, please?

Em... Oh.

I'm sorry. I'm out.

-You're struggling to keep your mouth shut, aren't you?

-Obviously, I've got to try to protect my business.

Steven, I have to tell you where I am. I think it's quite ridiculous. You're all over the place.

I'm not going to invest in you. So I'm out.

There may have been some smiles, but that's no comfort for the charming entrepreneur

as two more Dragons walk away from the deal. Just Theo Paphitis and Peter Jones are left.

Steven, I don't think you're ridiculous at all.

And if you're going to do all the things you say you'll do,

I don't think you need 100 grand. I think what you need is energy,

some drive, some ambition. I think you might have a bit of that.

And you can do all those things without my 100,000 quid.

And when you do it, I'll be the first one to congratulate you, but I won't be investing.

So, Steven, I'm out.

Em, 500 experiences sold. 1,500 people taken part.

I take nothing away from what you've done. You've represented yourself well, you've pitched well.

Steven, I've got a business with Theo that's in this marketplace.

You would be great as an individual

to be employed and come and head up those new experience areas.

I know you want your own business, but if that didn't work out,

I for one would definitely be a pro-advocate in having a discussion and offering you a job.

-I might well try and contact you.

-Great.

-Afterwards.

But I can't invest. Unfortunately, I'm out.

-OK, thanks guys.

-Thank you.

-Good luck. Well done.

An interesting experience for Steven. No cash,

but he may have just made his best contact to date.

The mantra about what to do if at first you don't succeed

is well known in the entrepreneurial fraternity.

Inventor Malcolm Keeling initially came up with an ingenious solution to an age-old DIY problem.

Rotorad is a new concept for fixing radiators to the wall.

It allows you to thoroughly clean and when you decorate what you do is release the wires

and you can decorate with freedom.

A simple, yet effective idea, but could it make any money?

-How much have you sold?

-Over 2,000 kits. I sell these to the public at £21 plus VAT.

What would a typical radiator cost?

-That radiator costs £30, £40.

-So you're increasing the price of that radiator by 60%.

-Yeah.

-Don't you think that's a problem?

-It's possible.

Now, true to the mantra, having not succeeded at first,

Malcolm tried again with an alternative use for his invention.

It looks exactly like a double radiator, but you can dry clothes at no extra expense, in winter,

-when you're using your heating.

-Malcolm, it's not the prettiest thing, but I can just see Mrs P

having all the radiators down and drying all the clothes. It's so sensible.

Sensible maybe, innovative certainly, but sadly Malcolm's business proposition

-once again began to unravel.

-How much have you put into this?

-About £200,000.

-£200,000?

-Yeah, yeah.

-Are you expecting that to come back to you?

-If I can build the value of the company up, yes.

-You keep giving us reasons not to invest.

-I don't know what it is.

Reluctantly, because I quite like you, I've got to say I'm out.

-Thank you all very much.

-Good luck.

-Thank you.

In troubled times, the second-hand economy often flourishes

and it's there you can find our next entrepreneur, Dominic Ricciardi.

He thinks his business can expand, but will the Dragons agree?

Hello. I'm Dominic Ricciardi. I'm here today to look for an investment of £100,000.

In 1996, I started a company called Caterquip UK. In that time, we've become one of the largest suppliers

of reconditioned catering equipment. We deal with very large companies,

from Corus Hotels, McDonald's, Marks and Spencer. The reason is because, as you can see,

we recondition equipment to a very high standard.

In the last three or four years, I've realised there's a massive gap in the market,

so we are looking to roll out a franchise proposition.

Each franchisee will have a territory of around about 3,500 customers and each customer

is estimated to spend about £5,000 on their catering equipment.

That's an average of £17.5 million per territory value of customer spend.

So I'm looking for £100,000 investment for a 10% share of the new business, the franchisor.

I'm happy to answer any questions. Thank you very much.

A fluent pitch from an experienced entrepreneur.

Dominic Ricciardi wants to spread his business wings and move into the world of franchising.

To do so, he needs a cash injection of £100,000 in return for a 10% equity stake.

Deborah Meaden is looking for a little more clarity.

-Dominic, hello.

-Hi.

-I'm Deborah. So you've got an existing business.

-Yes, I have.

-It turns in a profit every year?

-This year, £170,000.

-And you're offering...

-A new business, yeah.

So what's your thinking behind setting up a separate business from the one you've currently got?

If I explain some background, we supply reconditioned catering equipment.

As we sell the territories, the inquiries that come through to our office now

-will eventually be fielded down to the franchises.

-OK. I've opened a bit of a can of worms there.

So it's going to be a separate business that's integrated in the original one?

-Yes. Two individual businesses. We sell reconditioned equipment.

-You don't need to repeat it.

-But if it works with my money...

-Yeah.

-..then you phase out your existing business.

-Yes.

And if it doesn't work, it's OK. You've ring-fenced your £170,000.

-It's like any other business...

-I'm not going to ask any more.

I'm fascinated to see if any of these other Dragons can see any attractive point in that whatsoever.

It's a rather frustrating opening exchange. Can the dazed entrepreneur

regain his footing with Theo Paphitis?

Dominic, in a business transaction, you've got to have two happy partners.

Yeah. I can appreciate that, but we haven't even talked about my existing company

and we could integrate the whole thing. The only reason I've done it this way

-is because it's a totally new business.

-So you've come in with, "I want to sell you this,

"but actually I want to sell you something else. It's up to you to guess what."

-That's not business.

-Right.

-And the investment opportunity

-is so ridiculous that a man who's been in business how long?

-15 years. It's not ridiculous.

-I've got to stop you there. You haven't asked the right questions yet.

-Haven't I? Good.

-What's the right questions, Dominic?

-You haven't asked anything about the business.

-Sometimes in life,

after you've been in business for a very long period of time, you have a gut instinct.

When somebody offers you 10% of a new business with all the risk in it,

you automatically put barriers up and think negatively of that opportunity.

I look to invest in partnership with people, to work with them in a very honest, transparent way.

I can appreciate that. That's the way I am. I am very transparent. What's happened is

Deborah's asked me a question and I've come out with the wrong answer.

No, hold on a minute. I told you that the sole reason I had no more questions

-was because I didn't like the existing structure.

-OK.

That would have been a brilliant moment to say, "Don't get hung up on that. We can discuss that."

I apologise for that, then. Maybe I was a little bit nervous.

A little humility goes a long way in the Den. Perhaps now Dominic can get his pitch back on track.

But Peter Jones has concerns of an altogether different nature.

Dominic, there's something a little bit lacklustre,

-something not so exciting about the pitch.

-It's not a sexy business.

-It's not.

But you've done well. You've got a business, it makes money.

Let's get into the detail of the franchise opportunity. So what do I pay as a franchisee?

£41,000 is the franchise cost.

-And what do they pay on-going, every year?

-It's 8% management fee of their turnover, 2% marketing.

OK. If I'm now signed up, do I get some immediate business from you?

There's no immediate business, no. What we do is telemarket the area for introductions so they can go in,

start seeing customers. Plus the first 3-5 franchisees get me, which is a big part

-because I know the industry...

-So if I'm lucky enough to be one of your first five franchisees,

-it's going to be great.

-Great.

-And if I'm not...

-Well, the idea is that the first five franchisees,

-we need to get those established.

-But you're not offering any real true value here.

-Right.

-Why couldn't I do that myself?

-Being 15 years in the industry,

I've become one of the main people in reconditioned equipment

and I've emptied my head and built an operations manual like that

-on how to buy, sell reconditioned...

-So how do I buy that one that you've got there?

-There are a few strategies we use. It's very easy.

-Give me an example.

-One could be a part exchange.

Offering part exchange is a strategy that's deployed that you think only you can bring?

I thought you were going to say, "Look, I've got a deal with a manufacturer

-"to take and pick up all their refurbished products."

-We do. We deal with a lot of manufacturers.

One big market is B grade equipment.

-Have you got any exclusive deal with a manufacturer that ring-fences your business model?

-No, no.

But it's very difficult to get into this.

-It is very difficult.

-You know, Dominic, I've got... What? Over 60 kitchens.

When one of my facilities requires second-hand equipment, they use a local person who does all that.

-Yes.

-Why would they want to buy a franchise? They can just do it.

-They can just start doing it.

-They can, but it's not just reconditioned catering equipment.

We have new equipment as well, sundry supplies - chefs' whites, crockery, cutlery, plates, forks.

-Chemical supplies, service and maintenance.

-Yep.

-Oil filtration.

-Yep. So which of these couldn't somebody do on their own,

-rather than buy a franchise from you?

-Well, anybody can do anything at the end of the day, I suppose,

but the most difficult to do is the reconditioned equipment.

-How much second-hand equipment did you sell last year?

-Second-hand only, that's all we did last year.

-A million pounds.

-If all you did was sell reconditioned equipment,

-you didn't sell any new equipment?

-No.

-Dominic, how a franchise works

-is somebody buys a franchise from somebody who's already doing that thing.

-Yeah.

You're going to sell a franchise to someone who's going to pay for something you don't do yourself.

-That is right. We were...

-That's why I'm not going to buy a franchise

-or be involved with you selling franchises. That's why I'm out.

-OK.

The turbulence in the Den may have eased, but nevertheless Dominic loses his first Dragon.

And it looks like Hilary Devey has reached a decision, too.

You cannot franchise. You can't.

You've got to have brand awareness. You've got to have a database readily available.

-You mentioned in the beginning that they would have access to 3,500 customers.

-Yeah.

-Where are those 3,500 customers now?

-They're not our customers. They're what their territory consists of.

-So they're not...

-Dominic, please. Waken up.

-Please. For your own sake.

-Yeah.

-Waken up.

-I'm going to take it on board.

-You have no intellectual property,

you've no database, no track record.

Go back, do your homework, get your financial modelling.

And then you can look these prospective franchisees in the eye and say, "I know it will work."

-I've got to say I'm out.

-Thank you.

Dominic, I would advise you just don't go down the franchise route.

It's not a business I can invest in.

That's the only reason I'm going to say to you I'm out.

-Dominic, you have a very professional business by the sound of things.

-Yeah.

But I did say earlier that you weren't transparent. We do ask questions.

That's to find out about them, but you expect people to volunteer things that they think are relevant.

I can tell you it doesn't cut it for me.

This is not investable.

-OK.

-I'm out.

Three Dragons out in quick succession

and Deborah Meaden is all that stands between Dominic and complete failure in the Den.

This has probably surprised you, the way this has gone. It shouldn't have.

-But it did get us off to a bad start.

-I think it did.

-Let's park that to one side.

-Yeah.

-Actually, I've moved on from that.

-I'm now looking at the business proposition.

-Yeah.

-You've got a reputation in the industry you're in.

-Yeah.

-You are moving into a new industry and all you've done is trading equipment.

-There is another bit.

Can I jump in very quickly? In 2003, I set up a sister company

which supplies only new equipment. And last year they did a £4.5 million turnover.

You didn't think of sharing that with us any earlier?

I didn't want to complicate it. I made a mess of it talking about two, so throw a third one in...

-Dominic...

-Sorry, Deborah.

-I completely accept that this is a hot place in the Den.

I completely get all of that.

My advice to you is, if you're right about this,

do it. Be your own first franchisee.

The only thing that would convince me to hand you my money would be because you could say to me,

-"I've done it."

-Yeah.

-Track record.

-Yeah.

-Whole different ballgame.

-I mean...

-Are you going to be able to tell me you've got a track record in the franchise model?

-No, I haven't.

-I have in a good majority of it.

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

-Thank you.

Dominic may not have succeeded in getting investment, but he leaves with sound advice

from the multi-millionaires.

Wherever people are struggling to afford high property prices,

there will always be a market for inventive space-saving solutions.

Harrogate-based property developer John Tottie and daughter Rosalind had a particularly creative one.

So we bring the legs down and as you can see, the bed now moves down.

It's just going to sit above the low-level furniture. There's no need to rearrange it.

When you've finished, the bed travels back up. You don't even need to make it if you don't want to.

This isn't the product you'd expect a multi-millionaire to seek out,

-but Hilary Devey had a surprising familiarity with the market.

-Hasn't this been done before?

There's a French and German version. That originally inspired us, but this is £3,250 plus VAT,

-which is half the price of our highest competitor.

-Have you sold any?

-Not yet.

Early days perhaps, but when aiming at a budget market, entrepreneurs mustn't price themselves out of it.

What's the cost of pull-down beds?

I think they range from hundreds up to about £500. Obviously, ours is a lot more expensive.

I think this is probably better, but your market doesn't want better.

-The market wants...

-Cheaper.

-So I won't be investing, I'm afraid.

-Thank you.

-I'm out.

-Thanks for your time.

-Good luck, guys.

-So no investment this time,

but despite that, one Dragon couldn't resist a closer look.

So far tonight, the Dragons have yet to find an entrepreneur or business they think worthy of investment.

You've represented yourself well, but I can't invest.

For an exclusive behind-the-scenes look at how Dragons' Den is made,

press the red button at the end of the programme.

Lots of entrepreneurs dream of coming up with a great idea that shakes up an existing market,

a so-called disruptive technology.

Is that what Matthew Page and Louise Craven have come up with?

Hello. My name is Louise. I'm the account manager at Synergy. This is Matthew Page, the director.

We're looking for an investment of £95,000 in exchange for 20% equity.

We have developed a patent-pending hand tool.

Our design is simple. It is based on two handle parts which join together to clamp a variety of heads.

At the outset, we propose paintbrush heads, stripping knives and filling knives.

Matthew will now provide you with a quick demonstration of how the system works.

It's very easy. Just as a common product would do - you fill and repair a crack in the surface.

By changing the product head, we could replace this with a number of different products.

So...

Just grab the paint...

Just as you would paint with a regular paintbrush, you can do exactly the same

with this product.

For the consumer, this offers superior quality at a great price.

For retailers, it offers environmentally-friendly innovation with compact store merchandising

and for Dragons it's an opportunity to lead in a large market.

We welcome any questions you may have.

Annual sales in the UK DIY market are worth over £7 billion

and Nottinghamshire-based couple Matthew and Louise want a slice of that pie.

They need £95,000 to launch their new, versatile decorating tool.

Duncan Bannatyne wants to get straight to business.

Matthew, what does it cost for an ordinary paintbrush with a wooden handle, like the one in your hand?

It really varies significantly on the quality of the filament.

Some sell for up to £25. Equally, you can go into B&Q and buy a pack of ten for £5.

So if I wanted to buy five brush heads and one handle off you,

-what would that cost me?

-The most popular brush size is a two-inch.

They would range from around £6.48 through to £10.

From you? I'm asking about your product.

-Five brush heads and a handle. What would it cost me?

-I can give you the single...

The landed cost price is £1.35. The wholesale price for that is £2.67

and the retail price would be £8. To put it into perspective,

-the refill would retail at £4.

-Well, I'm very confused about what it would cost me now.

So are you saying that the handle fits one size only

-or does it fit five different brush heads?

-Yeah, exactly.

No, which? It's a question. The answer is it's one size only or it fits five different sizes.

It fits a variety. That's one of the unique selling points.

If it's for five different widths, you must be able to tell me what you sell the handle and five heads for.

I think we could put it into a mass retailer from probably about £8.

-For five heads and one handle?

-Yes.

-You can do it that cheap?

-Absolutely.

We can hit some really attractive price points.

Not the most comfortable start for the duo, but they managed to remain calm under some awkward questioning.

However, Peter Jones thinks he has spotted a flaw in the concept.

I've watched the guys that come round to my house to do decorating and this would drive them mad.

When I've watched them paint, they've got several brushes in different widths.

When they're brushing away and they want to do a small bit, they pick up a small brush

and then they do cutting in. And then they put that away.

If you've got to take, each time they do that, unscrew something, then put this next one on,

then screw it up... This is making it a bit of a hassle.

What we've tried to do here is what Gillette has done to the razor blade market...

-I don't have to unscrew a razor blade.

-But...

-It's click and go.

-This is...

-I think what might be worth noting is this is the initial prototype

and the amount of times you need to unscrew the thumbscrew is way too many compared to what we'll achieve

in the final production type.

Em...I'm not sure we're actually going down the right lines here.

Assuming that you did have a requirement for three types,

why wouldn't you buy three handles, three heads and your saving follows on from there.

When they go, you just replace...the head.

That gets you round the fiddly bit and still saves you money.

It's not one handle. It's one handle per size of brush.

Yes, exactly.

No, that wasn't what you pitched. You were very careful to pitch and to demonstrate

that actually you only need one handle for a multitude of different brush heads and product heads.

Theo's just given you an out.

Rescued by one Dragon, interrogated by others, Matthew and Louise are not getting an easy time in the Den.

Now Hilary Devey has questions of her own.

-Have you a business plan?

-Yes.

-Yes.

-And have you sold any of this product?

-No. Currently, we don't sell this product.

At the moment we sell decorating equipment, paintbrushes, roller sets into the UK market

for Europe's leading manufacturer.

But there's a natural break clause in that contract at the end of this year, which lets us do this product.

-So you're prohibited from operating currently?

-For a few more months.

It's essentially a start-up model, but we do have a lot of interest

-from the mass DIY market.

-But you've not actually done it?

-No.

So what you're saying is do we want to invest in a handle that we can then hope B&Q will buy

in the hundreds of thousands and we'll all sit back and become richer.

Louise, Matthew, hi, I'm Deborah. Can we just talk a little bit about this market?

I actually...I think really your selling point on this is more to do with the environment.

Yeah. On that point, what we did is the patent we applied for in the UK

is on the green patent scheme, so it's accelerated because of the environmental benefits.

-It should go to grant in just a few weeks' time now.

-So that's a big part of your play.

-Yes.

-Yes.

I think there is a problem.

Whilst it might be environmentally better, people are incredibly lazy.

You get a job, you paint a door, chuck it away. That's it. I'm not saying that'd right.

I personally think that's better. I don't think the mass market does.

It does have that ease there, especially for a DIYer.

But it's not easier. That's the point. It's not easier. So I applaud the environmental side.

The trouble is with it, if people don't want to buy it, it'll sit on the shelf

against the current way of buying paintbrushes. I'm not going to be investing, so I declare myself out.

-Thank you.

-Thank you.

-Matthew, Louise,

I still go back to my original instinctive feeling.

I don't get the convenience factor and I'm not buying into the cost of the product.

So you haven't sold it to me. I'll let you negotiate with the other Dragons and declare myself out.

Forlorn or just relieved? Either way, the couple now know they must focus their efforts

on the three remaining Dragons.

This company that you sell their products at the moment, how big are they?

-They do 200 million euros.

-Quite a big company, then.

-In paintbrushes, very big.

-Let's just suppose for a minute that they have a board of directors

and the board of directors get wind of what you're doing and they say,

"I'm not happy with this. These people are going to stop and sell a competitive product

"and have applied for a patent. What'll we do about it?"

And they say, "Let's crush them.

"Let's put every objection we can in against their patent. Let's crush them like worms."

-On what grounds can they object?

-Yeah.

-They can only object if it infringes one of their patents.

-Which it doesn't.

-You can't say, "I don't like Matthew and Louise, so I'll object to crush you."

I used to be a director of the UK subsidiary of their business.

I had dinner with the owner of the business last December and one thing he spoke about

-was to consider trading on our own account.

-Did you say to him, "OK, Mr £200 Million A Year Turnover,

"I am going to start in business, but I won't buy your product. I'll make a better product

-"and I'm going to take your business"? You didn't say that.

-Well, first of all...

-Did you say that to him?

-Sorry? They're fully aware of this product

and where it sits in the market, but they're not actually in this space that we're targeting.

Either they sell paintbrushes, and that's a paintbrush, or they don't. That's in their market.

-Right.

-And they will take it personally. I'm not going to invest in you, so I'm out.

Let me tell you where I'm at.

I think there's too many issues that could arise from this.

I think the board will react if you launch this product. Most certainly.

And I certainly wouldn't want to take that risk.

And therefore I've got to say I'm out.

THEO: So, just me.

I'm not worried about the fact that you're doing this and they're going to crush you.

You made it clear they do know and everything else.

My concern is they're a big company that know their market and they've said,

"Eugh, actually...

-"No." Now that's my worry.

-They haven't said no. They're still considering it.

-They have our heads of terms and a licensing agreement right now...

-You've sent them that?

-Yeah.

They said they're very interested in it and need a couple more weeks.

All right. I like the product. I've liked it from the minute you came in.

It's tactile, it's good and everything else,

but I don't know if this concept is viable

and you're asking for nearly 100,000 quid, which is a rather large punt to take

just on a gut feel.

And I hope I'm going to regret what I'm going to say.

It's not for me. So I'm going to say I'm out.

-Thank you.

-Divided opinion about the product and the business among the Dragons,

but the end result is the same - Matthew and Louise leave with nothing.

Others who tried and failed in the Den included business partners Darren Smith and Richard Booth

who hoped to convince the Dragons to invest in their energy-boosting enterprise.

They wanted £50,000.

Boost oxygen is 10 litres

of 99%-pure oxygen in a can.

It can help improve performance, concentration and recovery.

Our vision is to be the next Red Bull.

As you might expect, we don't recommend fooling about with pressurised cylinders,

but these multi-millionaires have never been ones for following instruction.

HIGH-PITCHED: Hello. How do you do?

When order was finally restored, the Dragons had a little difficulty grasping the concept.

-You're trying to sell me air?

-We are selling you oxygen.

-I'm more interested, frankly, in whether this helps with hangovers.

-The short answer is yes.

OK. I think I'm in.

Jokes aside, selling an invisible product to these business leaders is never easy.

Canned oxygen's not new. So what makes you think you can sell it

when people who spent fortunes on this couldn't?

The way the sports drinks market has really taken off, 20 years ago...

It's not the same as a sports drink.

It'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.

-So I'm out.

-Thank you.

Driving instructor Craig Ramshaw was next into the Den with an idea to reduce the number of car accidents

-caused by legitimate teenage drivers.

-Teen Drive is a driving school for over 14s.

The ultimate aim is to put a more safety-conscious driver onto the roads at 17.

Hard to argue with the aspiration, but would the numbers back it up?

-How much have you made?

-Right, the first full accounts show a turnover of £28,500.

We're nearing the end of the next tax year. It's probably in the region of £30,000 turnover.

-What's your projections, Year Three?

-I'm going to project £220,000.

-How are you going to manage that?

-Basically, with strong marketing.

Not a strong enough answer for the Dragon investors, so no cash,

but Craig did at least leave with some words of encouragement.

I think this is a really good thing and it could make a real difference.

-Yeah.

-But it feels like a social enterprise.

For me, it's just not an investment, Craig. It doesn't mean stop

-because you're doing important stuff, but I won't be investing. I'm out.

-Thank you very much.

You're an entrepreneur, pitching to the Dragons. How much equity do you offer them at what price?

You don't want to sell your company too cheap, but you want to be credible. It's a dilemma

our next entrepreneur has been grappling with. Mark Richardson from Cheshire.

Hello. My name's Mark Richardson and I'm here today looking to secure £100,000

in return for a 40% stake in my company, Bionic Glove Technology Europe Ltd.

Bionic gloves were invented by Dr Jim Kleinert, a leading US orthopaedic hand surgeon.

What Dr Kleinert knows is your hand is not flat. It's made of several natural peaks and valleys.

He's developed a pad system which serves to smooth those out.

That dramatically cuts down the risk of getting blisters and calluses.

The product is fully patented and protected and our customers also tell us that our gloves last

between two and three times longer than conventional gloves. I've been selling bionic golf gloves in the UK

for the last four years, during which time I've sold over 150,000 units

and generated over £1.2 million of revenue.

Based on that success, I've now been given the exclusive distribution contract throughout Europe.

The challenge now is to explain the technology to 4.3 million registered golfers,

8.5 million gardening enthusiasts, not to mention countless numbers of people that use the gym weekly.

I look forward to taking any questions, but first of all I'd like to demonstrate the product to you.

-Peter?

-I'd love to do it.

A professional pitch from Macclesfield-based Mark Richardson.

In order to reach more glove-wearing customers, he needs a £100,000 investment.

On offer is a hefty 40% of his orthopaedic hand protection range.

-Very good.

-Having tried it for size, what will Peter Jones make of it all?

-Mark, I think the glove is very good.

-Thank you.

-How big is Bionic?

-What was their last year's revenue?

-The revenue for Bionic last year was 11 million.

It's part of a bigger group within the US.

The overall group is around about 120 million.

-And you mentioned that you've now got an exclusive contract for distribution in Europe.

-Yes.

-When was that signed and how long does that last for?

-Er, that was signed in April

and that extends for five years. If everything is adhered to, there's an automatic renewal of five years.

And what sales targets do you have to hit to retain that contract?

It's just 15,000 units. That's the minimum purchase requirement.

Last year we sold just under 50,000 units.

I'm not worried about the minimums.

-So Mark...

-Hilary.

-..what you really have then is a master licence agreement.

-Yes, it is.

-Could I have a look at it, please?

-Certainly, Hilary.

Unfazed by quick-fire questions, Mark has a good start.

Now a begloved Duncan Bannatyne wants to drill down into the business itself.

You said you had taken £1.2 million-worth of revenue...

-Since 2008, yeah.

-OK. And what were you selling then?

It was just golf. Just the golf glove and just in the UK.

-How were you selling them? Were you...?

-It was a combination of me through major high street retailers

who specialise in golf, then we have nine self-employed independent sales agents who cover the golf clubs.

OK. So what's your projection going forward?

Projecting £500,000 revenue for this year and a net profit of £100,000.

I'm expecting revenues to start to increase significantly over the next couple of years.

So in 2013 I'm projecting £1.3 million.

A net profit of £150,000.

And then in 2014 revenue of £1.6 million

and a net profit in the region of £180,000.

Mark, a big jump.

Tell me why it's going to go up so dramatically when you've been selling it for four years.

Because I've now got distributors throughout Europe. In Sweden, Austria, Germany and Italy.

I didn't have any this time last year. I have a meeting with 16 distributors.

The first distributor I've got on board has already given me orders worth 30,000.

So I think the potential is actually fantastic out in Europe

and it's starting to go extremely well. I think we could be a multi-million-pound business.

Ambitious expansion plans and plenty of interest already.

Things seem to be going well for the assured entrepreneur,

but what of his licence agreement? Hilary Devey has been studying it intently.

Mark...

I can't find anywhere in here where it extends

-your licence for five years.

-It extends... Was it not opened up on that page?

Can I...? Sorry.

OK. Can I read you the...? "The agreement shall last for five years beginning from the effective date.

"The agreement will automatically renew in five-year increments based on mutual agreement of both parties

-"and the terms of the contract."

-And that deals with the five-year extension?

-Yes.

But it doesn't, does it? Mutual agreement. The other side can mutually not agree.

-No, and I am aware of that and...

-I really think you need to tighten that up.

-OK.

You need to be saying to them, "What is expected of me? What can you terminate under?

-"And what right of redress do I receive?"

-OK.

As a master licence agreement, it's very, very open.

I would not have signed that.

-OK.

-And I think you're absolutely wide open.

That's a shame because you are so enthusiastic about this glove.

I think I've coupled the contract with the sentiment and experience of dealing with these people.

-Well, I would say you need to get your admin right first.

-Yeah.

-Before you start looking for investment.

-OK, good feedback. I'll certainly do that.

It's not an investment for me and I've got to say I'm out.

A major setback for the passionate businessman as he loses his first Dragon.

Will Peter Jones share his rival's view?

Mark, I keep looking at the business and the model

-and you are ultimately a sales agent.

-Yes.

Whilst that doesn't mean that you can't have a successful business,

I have a very different thought process when it comes to strategy and investment

-with things such as this.

-Yes.

-And ultimately I just don't want to invest in something

that we can't control, own,

look for economies of scale further down the line, bring out our own products,

-so that's the reason, and the only reason, why I'm out.

-Thank you.

-Mark, tell me what the turnover was last year.

-Last year,

we're looking at a revenue of around £394,000.

With a net profit of around about £79,000.

-And are you taking a wage?

-I take a dividend out of the business.

-So in a normal situation you would take a wage.

-Yes.

-£30,000 a year or something.

-Yes.

-So your profit would be £40,000 after wages.

-Yep.

-It's a lifestyle business and a great one for you,

-but this is not a business that anybody can invest in and get a return.

-OK.

Unfortunately, Mark, I'm out.

Two more Dragons out. Mark's investment hopes are looking slim.

And Theo Paphitis seems to have made up his mind, too.

Mark, some things come in the Den that we might not have direct business links to,

-but we have a passion for - a hobby, a love, something that tickles us, floats our boat.

-Sure.

-And golfing is not something I've got a particular passion for.

-Sure.

-Or gloves.

And that might not be, Theo. I need your help in giving it some profile. I can do the rest.

I've got the passion for the gloves, for the brand. I've got the passion for taking it to market.

I've actually got it into a major high street retailer this week.

-Who's that, by the way?

-It's Argos.

-Right.

-And how many are they taking?

-They're taking the golf range, gardening, fitness.

So I'm very excited about that, but that was hard work, Theo. It was hard work.

Listen, I'm not against hard work, but if somebody with your contacts can get in,

-then I can do all the legwork behind.

-OK...

There's something about you. You're tenacious, you don't accept no for an answer.

-You have got a huge enthusiasm for a...

-For a glove.

-..for a glove!

I've never seen anyone so excited about a glove!

My concern is the brand value that you build up

-is hampered.

-Mm-hm.

-Because you've got somebody else's product.

And it very much relies on a contract which I haven't even read.

Theo, it's a good point you've raised. We've run through it with my lawyers, they seem very happy.

I know the people well, I trust them. There is nothing in there that I'm concerned about.

I tell you what I'm going to do.

I'm going to do something when you came in I never thought for one minute I'd even consider.

And that is...

to offer you

part of the money.

As a punt. On you.

OK.

So I'll offer you £50,000

for 20%.

A dramatic turnaround in fortune, but an offer for half the amount in the Den is not enough.

Mark must receive all the money he's asking for or leave with nothing.

And only Deborah Meaden remains.

Mark, can I just ask you which bit is actually the patentable bit?

-There must be something specific about these...

-It's the way the pads are configured,

within the flex points of the fingers and the palm of the hand.

And the other hope, Deborah, is that within the contract that I've got,

I've got the ability to sub-license the product, so to somebody making gloves it could be added value.

-OK. I think the single biggest issue for me is that we have a licensed product...

-Yes.

..and there isn't that exit strategy. So building that brand

leads to profit. It doesn't lead to building value in the business, which we can realise later.

And, actually, you knew that problem because you pitched at a good rate.

You said £100,000 for 40%.

I'm...

I'm going to match Theo's offer.

OK. Well, thank you. I'd like to accept that offer.

-Mark's done it.

-Thank you, Theo. Thank you very much.

-Thank you, Deborah.

-Excellent.

-It's rare to see licensed products get investment in the Den,

but his success proves the Dragons won't pass on a money-making opportunity, whatever the business.

I don't remember many entrepreneurs notching up successes in the Den with licensed products,

which makes Mark's success today all the more impressive.

Now Deborah and Theo have given him licence to grow his business

and make money for them and himself, too.

If you press the red button now, you can get an exclusive insight

into why the Dragons were so keen to invest in Mark. Goodbye.

Next week in the Den:

If you'd have invented baked beans, you wouldn't have sold them!

It's great to be passionate, but you also have to be honest.

How difficult was it to design a piece of cardboard with holes in it?

-BEEP

-Your food's ready.

I was about to say I won't make an offer, but you're very good.

-Did you never take any risks, Theo?

-Oh, my God!

-Amazing.

I'll offer you exactly what you've asked for.

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