Episode 11 Dragons' Den

These are the Dragons, five of Britain's wealthiest

and most enterprising business leaders.

They're about to make or break the dreams of dozens

of budding entrepreneurs.

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

It's great to be passionate about your business,

but you also have to be very honest.

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

I was about to say,

"So on that basis I won't be making you an offer,"

but I actually think you're very good.

The multimillionaire investors have each built up

their fortunes from scratch.

Retail magnet, 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.

Now, it's a difficult time for entrepreneurs.

So often they need cash to get their businesses off the ground,

but banks are not lending like they used to,

and friends and family are less likely to have cash to spare.

The good news is the Den remains open for business,

and already we've seen the Dragons are ready to invest -

but only if the pitch is perfect and the product is right.

Our first entrepreneurs, Emma Jones and Mark Ferguson,

came up with their idea

while relaxing on a skiing holiday in the Alps.

Let's see what the Dragons make of it.

PHONE RINGS

Gosh, I do apologise. I thought I'd turned my telephone off.

I am so sorry.

How annoying's that? And how many times have we seen that happen?

We all know somebody who drops and loses phones.

However, Emma, if you'd had one of these on your phone,

that wouldn't have happened.

Hi, my name's Mark Ferguson.

And my name is Emma Jones.

We're here to ask for a £70,000 investment

in return for a 10% equity in myBunjee.

It slips over the top of any mobile phone, gripping the phone,

ensuring the safety of it.

You simply clip it into your handbag,

onto your trousers or into your jacket.

Since launching, we've sold over 90,000 products worldwide.

We'd like to give out some samples, if we may,

so you can have a little look at it and maybe a little play.

And we'll be happy to answer any of your questions.

-Thank you.

-Thank you.

A well executed pitch from the Chester-based couple,

Mark Ferguson and Emma Jones.

With over 6 billion mobile phones in the world, they're hoping

their invention will help them cash in on

the accompanying accessory market.

They need £70,000 to kick-start their global plans

in return for a 10% stake.

Hilary Devey looks intrigued.

You say you've sold 90,000 to date.

Correct.

At what price?

We have distributors now in 13 countries,

so the price on that varies.

You've got the prices on the...

We sell a Bunjee, retail price, at 6.95.

Wholesale, we'll sell at 2.50-ish.

And these can adapt to any phone, can they?

They'll fit any phone.

The new smartphones it'll fit, the old Nokias.

Who designed this?

-We designed it, actually.

-Both of you?

-Yes, yes.

Presumably that's not patentable, is it?

Well, patent's pending.

It's patent pending. We're 14 months into a patent.

-The searches are being done at the moment...

-Right.

Can you just tell me a bit about yourselves?

My background is a PA.

I used to work in London as a PA, I used to work for

Susannah and Trinny and for the marketing director

of The Times newspaper, organising their busy lives.

What about you? What did you do before, Mark?

I'm a retired headmaster.

-I was a headmaster in a 365-day...

-You don't look like a headmaster.

-A lot of people say that...

-Far too friendly to be a headmaster.

..especially the children.

It was a 365-day residential school for autistic children

with extreme challenging behaviour.

Oh, bless you.

I miss it terribly. Miss the kids, miss the staff.

Don't miss the regulators and the paperwork, but there we go.

Charm and calm in the Den,

it's a good start for the first-time entrepreneurs.

But do they have the numbers to match?

Duncan Bannatyne wants to know.

I want to take you back to the 90,000 you sold.

What was the revenue you achieved?

Can I give you the revenue from December,

which was the end of the financial year?

We're all very new to this.

If you've come in saying you sold 90,000,

you must know the revenue for those 90,000.

So unless you're hiding it...

No, we're not hiding anything.

I can tell you to the end of December,

we sold 76,000 units, with a turnover of £115,000,

with a gross profit of £42,000

and a net profit of £16,000.

-So you're making a profit.

-In the first year. We're very proud of it.

Yep. Making a profit, you're turning over a business.

What's you projected profit for this year?

We expect to sell 250,000 units

with a £800,000 turnover,

which should give us £566,000 gross profit,

with a net profit of £506,000.

So why are you here today?

In short, we would like to use

your expertise, your contacts,

your money, your investment to take us at speed to market

and take us to the next level.

-PETER:

-Can I ask a question, Mark, Emma?

You mentioned distributors that are selling the product?

How many of them?

We've got 12 at the moment, one pending to be agreed.

Our first distributor actually was from Australia.

And we're just talking to Russia at the moment.

How many have you got in the UK?

We haven't got anybody in the UK.

I do the distribution in the UK at the moment, and we don't

have a chain in the UK, which is what we're very much looking for.

So, the high-street retailers, to be on board with them

would be absolutely fantastic.

OK, so all your distributors are people

-that sell the product overseas?

-Correct. Yes.

-You mentioned patent?

-Yeah.

What makes you think that this is patentable?

Obviously, the lead is something that's available.

We've all seen those leads before.

But actually the concept of what it does in gripping your phone...

The reason why I say it is because there's

a product out there that's almost identical to this.

It's attached to the cover of the phone

and I know that, cos I sell it.

But does it fit all phones, Peter?

-It fits any modern smartphone.

-Right.

OK.

I actually think yours is better.

-Thank you very much.

-Thank you.

Praise indeed from the industry expert.

But Mark and Emma have yet to receive an offer.

Can Deborah Meaden find a reason to invest?

So when it went to Australia,

because you found yourself an Australian distributor.

-She found us.

-She found you, even better.

-How many has she sold?

-She has just placed another order.

She's sold 20,000, I believe, to date.

OK, so take another country. America.

Tell me the story in America?

I'm sure you're aware of a chain of retailers in America called

The Container Store, who actually gave us our first order in America,

which was fantastic.

And they sold, in three months, they sold 20,000 products.

And they've just reordered from us.

OK, so you've got all this going on in the world out there,

-but in your own backyard...

-Yes.

I'm trying to understand what's different in the UK.

I don't think we've spoken to the right person.

I find it very hard, when I get on the phone

and I have a list of people I want to talk to,

or companies that I want to talk to that week,

I find it very hard that there's a no-name policy

on a lot of companies.

I send the product in and I don't get a response from people.

So actually getting to the right buyer for me

has been a massive battle and we're still working on it now.

-HILARY:

-Right.

You've got a brilliant product, it's really unusual, it excites me.

Yeah, absolutely. Everybody needs a Bunjee.

Everybody has a mobile phone.

Is there any negotiation on the percentage?

You always negotiate on the percentage.

You're Dragons, that's what you do.

Because it's a very low percentage, for what you're expecting.

-Yes, I understand that.

-And for the input that you're expecting.

-Yeah.

-HILARY:

-I think I can bring a lot to the party.

I have a lot of access into major retailers.

So I'll offer you the full 70,000,

but I'd like 20%.

Thank you.

First to break cover is Hilary Devey,

but she's demanding twice the equity

the confident duo wanted to give away.

Now, will Duncan Bannatyne choose to compete?

Have your accounts for last year been audited and signed off yet?

They're just been done at the moment, actually.

And they will show a pre-tax profit of 16,000?

Yes.

-DUNCAN:

-OK.

Based on sensible projections,

showing a profit of 500,000 this year...

I'll offer you - and I've done this once before in the Den -

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

I'll offer you £70,000 for 10% of the company.

-Thank you.

-Wow. Thank you.

You can talk to Emma, can say, "Thank you, Duncan,"

-and put your hand out before I change my mind.

-Gosh.

I'm starting to sweat a bit now.

We'd like to see anybody else?

I think we go with that.

-OK, I think we'd like to see...

-Mmm?

OK, while you're talking then, I'll counter that offer.

I think, instinctively, this product is great and I did when I saw it.

I really like you, I think you are incredibly credible,

I think you'd be great fun to work with, as well.

-Your biggest thing is taking this product to market.

-Yes.

I feel I could probably get the Bunjee range

with 50% of the marketplace in mobile phones within weeks.

Wow.

Duncan's offered you £70,000 for 10%,

-which is what you came in for.

-It's amazing.

But I'm going to make it really difficult for you, because...

I'm going to offer you

all of the money, £70,000...

..but I would want to see a much larger return...

..on the basis of the access that I can provide you overnight.

I don't think anybody else can.

So...

I'm going to offer you £70,000,

-but I want 35% of the business.

-Wow.

-Gosh, OK.

-35% for 70,000?

The Dragon rivalry comes to the fore.

Three different offers with three very different equity demands.

Will Theo Paphitis make it four in a row?

You've got a variety of offers.

It's already been said before, you've got a good product.

It has a very short lifespan, incredibly short.

Believe you and me, it will be copied in two ticks,

-patent or no patent.

-Yeah. I believe that.

-Right? That doesn't matter, doesn't matter.

-No.

But it is about getting to the market first, having a brand name,

and everything else, which I'm sure you're fully aware of.

So it is right that you'd need to get it to the market quickly.

My investment criteria is very simple.

I look at the people, do I like people, can I work with people?

The next thing I look at is the product.

Is it something that I can make a business out of?

And whilst you get a tick in the first box,

I'm struggling to get the enthusiasm for the product.

-So, I'm going to give you one less headache.

-OK, thank you.

I'm going to wish you the best of luck and say I'm out.

I appreciate that. Thank you.

-DEBORAH:

-I'll tell you where I am.

I think you've done a great job,

and you've got a lot of areas covered.

You've already made a profit, but actually, if you're going to

really grow, you're going to have to be very business-savvy.

But I'm actually not going to beat Duncan's offer.

I can't offer you what Peter can.

Um...

I was about to say...

Well, I was about to say,

"So on that basis I won't be making you an offer,"

but I actually think you're very good.

I think I could add value, I know how to make money, you know?

So I will make you a competitive offer

so that you've got more options on the table.

I will make you an offer for all of the money.

-But I would want 15% of the business.

-Thank you.

-Thank you.

-We'll have to have a little minute, won't we?

-Yeah.

-If you don't mind.

THEY WHISPER

OK, let me talk.

INAUDIBLE WHISPERING

I'd like to thank you all for your comments,

I'd like to thank you all for your offers.

Peter is the obvious man to market for us, for our products.

However, we think 35% is maybe too heavy for us.

So whether you'd consider maybe 25?

I'll tell you why I wouldn't.

I could probably get us large enough orders, initial orders,

from two to three main players in the marketplace.

I'm talking about the main manufacturers that deliver

next day to every consumer in every country around the world.

And we've put products in there on a hunch,

thinking "that is going to be massive."

-OK.

-And my hunch tells me I think it could be incredibly large.

-Right.

-And so I think that to get access to that there is a price.

Your incredible hunch, would it take you to 30%?

When you're sitting there making a huge amount of money,

and I am too, I don't think you'll resent me

for keeping that extra 5%.

-OK, thank you very much. We will accept that.

-Yeah?

-Absolutely.

-Great.

-THEO:

-Excellent!

-Thank you very much. Well done.

-Cheers.

Mark and Emma have done it.

Peter Jones may have strong powers of persuasion, but he also has

the experience and the contacts

that are a perfect match for the business.

-HILARY:

-You are the right person for them.

-THEO:

-You shouldn't be offering, if you can't do it.

I could do it, but I can't do it as quickly as he can.

I could've. I could've just rung Peter

and said, "Peter, help me with this."

HILARY LAUGHS

To have so many offers, you know, you have to take each one

and take its value as to what they can bring to the table.

We were really tempted by Duncan's initial offer,

but Peter made an even more significant offer for us.

We'll take Peter all day long at 35%. He'll work hard for it.

Now, it's common knowledge

that we're all going to have to work a little longer in life.

But what does the future hold for those approaching retirement age?

Katie Harris and Adil Abrar have an answer to that very question.

They came in seeking investment

in their experience-focused dotcom business.

They had a little help from some friends.

The Amazings is a social online marketplace with a difference.

I'd like to introduce you to two of the Amazings.

Hello, my name is Bernadette and I am an Amazing.

I teach knitting and crochet.

Hello, my name is Michael and I'm an Amazing at hairdressing.

The generation that are retiring today, they're not old.

They don't want to go to bingo.

So we're going to allow them to sell their time, make money,

-share their skills.

-Amazing!

A novel initiative, but the multimillionaire investors at first

appeared more interested in the Amazings than the entrepreneurs.

So what exactly do you do, Bernadette?

I teach knitting and crochet.

I do a two-hour stint for £20 a session.

For me, it's a social evening as much as the fact that

I can supplement my pension.

The knowledge-sharing concept seemed to go down well

with the Dragons, but Katie and Adil soon found that getting them

to share their cash wasn't so easy.

How many Amazings do you think you'll have under your control?

We've recruited 25 Amazings, we've done 40 events.

On average, each one of those events has got £140 worth of revenue.

We make our money by taking a commission.

-How much have you turned over?

-In total, it's about £6,000.

-How much profit did you make from it?

-Profit? Well...

Um, I think it's fair to say that what we're trying to

do is build a marketplace.

No, no, I get all that, I'm just asking for information.

Sure. Zero.

No sign of profit yet, then,

and the likelihood of investment soon slipped away.

But curiously, one Dragon felt that might be the way forward.

I actually like the idea and I think it's great that you're doing it.

The issue that I have is that if I was to invest in this,

I actually wouldn't want to make any money.

It should be not-for-profit so that actually the good that you're doing

can radiate and grow, so it's not an investable opportunity.

I'm going to say I'm out.

So, plenty of advice,

but unfortunately no investment for Katie and Adil.

I feel sad, but we're going to continue recruiting Amazings,

we're going to continue helping the world learn.

We think we have a really great concept,

and we're just really keen to get investors on board

that, you know, really want to back us and the concept.

And if they are not the right ones,

then that's cool, we'll find someone that is.

Next in the Den was inventor Mark Thompson from Solihull,

looking for £200,000 of Dragon investment in his new creation.

We've invented a fully portable solar power supply.

Flick a switch, you have electricity. Toast is just cooking there.

This little device changes a lot of lives.

Now, it's important to remain calm under pressure in the Den,

especially when things start to get heated.

-Something's burning.

-It's the toast.

-Crisis averted.

For the moment, at least.

-Have you sold any at all?

-Yes, 100 pieces. To where?

Ghana, UAE, Bangladesh.

And your unique selling point is the portability of it?

Yes, it is, yeah.

Mark, it looks about as portable as a baby elephant.

Not the most helpful observation when looking for investment,

so Mark called for some backup.

Could I bring my dad in at all?

Dad's 70 years of age. We started the business together.

But would standing shoulder to shoulder

with his father, Gerald, help Mark's investment cause?

-What did you do before this?

-I ran my own company. Got Dad involved.

Grew a battery company up to 7.2 million.

-And you sold it for how much?

-The company went for two million.

Mark said to me, "Dad, do you fancy making up another company?"

And I said, "Yeah, let's have a go for it."

An inspirational family business story, but sadly the Dragons

did not think this new venture was worth the £200,000 investment.

I've got a business here making no money,

and you are valuing it at two million.

Why did you come here with such a ridiculous valuation?

-Did you never take any risks, Theo?

-Oh, my God!

Mark's dad, if I told you some of the good,

the bad and the very ugly risks I've taken, you would cry.

And you know what? I don't make ugly investments any more. So, I'm out.

In business, it often pays to go with what you know.

Former mobile DJ Mark Shepherd came up with his invention

after witnessing a common problem facing women on a night out.

Will the Dragons see a money making opportunity?

MUSIC: "Groovejet" by Spiller

-What are you doing?

-Putting my Itsoles in.

-What are Itsoles?

They are the new insoles.

They're so comfortable, I can dance all night in these.

Why are you sitting down?

I can't dance any longer, my feet are hurting.

Hello, my name is Mark Shepherd.

I'm here today seeking an investment

of £50,000 for a 15% share in my company.

Women love high heels, and heels are getting higher and higher.

I developed Itsoles when I was working as a DJ,

and I would constantly see insoles on the dance floor

because they had fallen out,

and women carrying their shoes home because of the pain.

Itsoles was developed to prevent this problem.

You simply place a soft felt pad inside the shoe.

Once you've attached that, you place the front gel insole into the shoe.

You place the back insole in, and then that's securely in place.

Thank you for listening.

I'll now answer any questions. I'll just ask the girls to hand out

a pair of Itsoles for you to look at. Thank you.

A rather low-key end after what was a very lively opening.

Swansea-based Mark Shepherd is asking for a £50,000 investment

to take his women's foot protector brand to the next level.

In return, 15% equity is on offer.

But Peter Jones looks to have something on his mind.

-Mark, Hi.

-Hello.

-I'm Peter.

-Hello, Peter.

I just want to focus on something you said.

-You were a DJ.

-Yeah.

-Was that a while ago?

Well, I was a DJ up until about 2008,

and since then I've been working on Itsoles.

So, you've done nothing else in that time apart from Itsoles?

-Just Itsoles, yes.

-And how have you made a living?

Well, I've just managed to survive on,

just doing the odd disco now and again, that's all.

-Just the odd one or two.

-OK.

You've got a product that looks like it just puts a cushion

underneath the sole and the instep of the foot. Is that right?

No, there's a lot of benefits of this product over existing products.

It has toe ridge on the front gel pad.

This toe ridge helps to stop the foot moving forward.

With the rear insole, you have a heel ridge,

and that also stops the foot moving forward,

also taking pressure off the ball of the foot.

Actually, 70% of the bodyweight is on the ball of the foot when a lady

wears a three-inch heel, so anything higher, there's even more pain.

-OK. So, is this a product that can be patented?

-It is patented.

Well, it's patent pending. And my patent attorney has told me

it should be granted by the end of the year.

And is there any other product out there that is similar to this?

Yeah. Scholl's Party Feet.

And how have Party Feet done as a business?

Well, statistically, in 2008 they made £58 million.

-HILARY:

-Is that turnover?

-Yes. Yes.

-They turned over.

The actual foot care market itself is worth 3.7 billion.

A confident Mark clearly demonstrates a knowledge of his market.

It's a good start. What will Deborah Meaden make of it all?

OK. The good news is, I completely get it, because I've got

lots of pairs of this type of product, a gel style product.

-Yeah.

-They all pretty much deal with the ball of the foot issue,

-which, you're quite right, is where the pain is.

-That's right.

What I'm worried about is somebody else has come up with the solution,

and that what I'm feeling here...

It's making the shoe really tight.

And it's pushing my foot out of the shoe.

So you end up with a different problem,

which is, as you walk, your heel starts slopping out of the shoe.

-So, I understand exactly where you're coming from.

-Yeah.

-But I actually think the problem has already been solved much more elegantly.

-OK.

-HILARY:

-Deborah's right.

I mean, the problem with shoes like this

and what Deborah has got on is that the heels are very thin, they're very high,

-and it's the instability of walking anyway.

-That's right.

-I mean, they are cushioned.

-Yeah.

-So, if, you know...

I mean, I do know people who've bought really expensive shoes

and wear my insoles in their shoes.

And they have paid over £300 for a pair of shoes, and they love my insoles in their shoes.

Customer feedback is important to any business,

but sadly, in this instance, it is not as positive as Mark would have hoped.

Can Theo Paphitis find reason to be optimistic about the business itself?

-Mark. One - how much money have you put into this so far?

-Yes.

And, two - how have you funded it?

I funded it through... I've had investment.

-Give me some numbers.

-OK, well, I currently have five investors.

One of my investors invested 35,000.

Two of them invested together, and they put in 10,000.

-Right.

-And the other two investors put in £10,000 each.

-And have you put any money in?

-Yes, I put in about 30,000.

-So you've spent nearly 100,000 quid.

-That's right, yes.

-And how much stock have you got?

-I've got about 2,000 units left.

-Left? So how much did you have in?

-3,000.

How many months have you had the stock for?

I only had the stock last year.

So how much turnover did you manage?

It was £8,000.

-£8,000.

-Yes.

-Why haven't you sold any more?

I've been doing this all on my own.

You've had the stock for a year, Mark.

-I've had the stock for a long time, yes.

-And you haven't sold it.

-Mark, who owns the company?

-I do.

-What percentage?

I have 70% of the company.

-So, the investors who invested 65,000 between them got 30%?

-Yes.

-And now you're asking us for 50,000 for 15%?

-That's correct.

And obviously you know now this isn't selling as well

as what you thought it was going to sell when you got that investment.

The reason I need investment is for marketing and to establish a brand.

That's why you need the 65,000, Mark, and you had projections then.

And you are actually below the projections that you gave to your original investors, aren't you?

My original investors never even asked for projections, to be honest.

Could I have their telephone numbers?

-I would like some investment in my companies.

-DRAGONS LAUGH

I think that one of the problems you have is that the big competitor

might be sitting waiting to challenge your patent.

I think you should go to them and try and sell it.

Well, actually I approached Scholl with my prototype two years ago,

and they've asked me to come back and see them with a finished product.

OK. You know, I do think it's something that would be very difficult

to make a huge profit on and make huge sales on because of the competition.

The product actually is made for £2.79. I sell it for £14.99.

-Good mark-up.

-Yes, it's a 72% mark-up on it.

OK. I wouldn't give up. I think you've got something here.

But I think it's just too risky and too much hard work for me to invest in it,

and so for that reason, I wish you the best of luck,

but I have to say I'm sorry, but I'm out.

Finally some encouraging comments about the product,

but not about the business.

Mark loses his first Dragon,

and Deborah Meaden looks like she's made up her mind, too.

The competitor you are talking about,

who have absolutely dominated that market

and are known for actually coming up with solutions

-to make people's footwear more comfortable.

-Yes, they are.

For you to compete with them,

you've got to come up with something that is unique and important enough to me

to make it better so that you can compete with them.

-Yeah.

-Truthfully, would I switch from the current product to this?

No, I wouldn't.

Because actually the current product, for me,

does everything I want it to do.

And that says it all.

You haven't given me as a consumer enough of a reason

to move away from the tried and tested,

and the people who are absolutely known for footwear.

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

-OK. Thank you.

Mark, I think this is something that is not going to catch on.

I don't think there's a huge market for this.

And I think at the end of the day,

it comes down to what the consumer reaction is.

And you've had two very serious consumers here,

-and results have been bad.

-Right.

This is not an investment for me, so, Mark, I'm out.

-Mark. You've had the product for a year.

-Yes.

All the excitement of creating it, yeah? Why hasn't it worked?

Um, because I haven't really gone in front of the buyers,

the right buyers for the shops.

I haven't been able to get through to the buyers.

I've tried to get through to the buyers.

I've sent the samples off,

I'm trying to meet the right person and talk to the right person.

-Do you think you should carry on with this?

-Yes, I do.

Because this is just the first one.

I've actually got other prototypes developed to come forward after this.

So you are creating new versions at more cost

when you can't sell what you've already got?

I can bring out, like, for example with the gel,

I can make it a glittery one for Christmas, for example.

The peak times for selling this product is Christmas time and summer season.

Mark. Mark. 50% of all small businesses

-fail in the first couple of years.

-Yes.

And it's great to be passionate about your business,

-but you also have to be very honest...

-Yes.

-..about how things are working out.

-Yes.

-I don't think that this is something that I can invest in.

-OK.

I'm afraid I'm out.

Firm opinions from the experienced investors.

Mark's initial confidence is starting to look misplaced.

Now, just one Dragon remains.

Mark, I'm not a horrible person.

I'm very compassionate, very honest and very sincere.

-But, I don't think there's anything wrong with your product.

-OK.

-I think what is wrong is you.

-OK.

-You're not a natural born salesperson.

-No, I'm not.

-You're not a natural marketeer.

-No, I'm not.

-You haven't got any of those skills.

-I realise that.

If I'd have put 30K of my money

and the rest of other people's money in a product,

by God, I'd be out there,

-and I wouldn't be taking no for an answer.

-Yeah.

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

because, I'm sorry, my friend, you're far too laid-back.

-And please take this as constructive advice.

-OK.

Tenacity, focus, self-sacrifice.

-That's what every entrepreneur needs.

-Yes. I know my strengths.

My strengths are, I am a designer, an innovator,

and I am seeking expertise in marketing.

I'm seeking people who can help me with that.

I'm very sorry. Take a good look in the mirror, and then start again.

And it is constructive criticism, not denigration. I'm out.

-OK, thank you.

-Good luck, Mark.

-Thanks a lot. Thank you.

That was a tough experience for Mark.

It was a brave attempt to get investment,

but he leaves without the cash or the support he badly needs.

So far tonight, only one Dragon has seen enough potential to invest.

Others who tried and failed in the Den included

Cheltenham-based Abigail Whittaker and her husband Andreas Patikis,

who decided to turn the tables on the Dragons.

Let me start by reversing the roles today, and giving you some money.

Oh, my goodness!

You can have that extra cash in your pocket every week thanks to Tick-Tock.

It is a unique visual aid to remind the householder

to use food types we most commonly waste.

So, a money-saving initiative - that's got to be a good idea.

But entrepreneurs be warned - as we know, it's great bottom lines

not great concepts that excite these hungry investors.

Where's the money coming from to make this a business?

We're generating an income via the retailers.

Which retailer have you gone to that has said,

"I'm willing to pay for such a product"?

At the moment, our greatest interest is Sainsbury's.

We manufacture it and they pay for it.

To the householder, it's absolutely free.

Having interest from a major multiple can sometimes

clinch a deal in the Den.

Unfortunately, this time it served only to ignite a heated debate

amongst the rival investors.

I don't believe that any supermarket is going to spend

millions of pounds to reduce the amount of food their customers buy.

Duncan is absolutely wrong,

because supermarkets are spending a fortune trying to cut down on waste.

Deborah, I go to a supermarket and see a packet of food and it's £4.

There is a big sign on the shelf, it says "two for £6".

People will buy the two when they only need the one.

That is food that's being wasted.

If they were truly committed, they would stop doing that just like that.

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

-Thank you.

A lesson in business, then, from Duncan Bannatyne.

But would that have an effect on the budding entrepreneurs?

We went in with a product that we really believe in,

so expected it to go better.

It was obvious that Deborah's been more involved in the waste

side of things, and she understands that there are

big budgets currently to address these issues.

It was disappointing to see Duncan's opinion,

but I think it is always good

to get a bit of controversy going in the Den, anyway.

Next to walk down into the Den were Danny Keane and Phil Andrews from Gloucester,

who hope their novelty outdoor cooking appliance

would be enough to tempt £40,000 from the multi-millionaires.

Welcome to the CarBQ, an outdoor cooking appliance

your friends and neighbours will be envious of.

We've got flashing indicator lights, headlamps.

-HORN SOUNDS

-Your food's ready.

If you'd like to grill us on anything...

Whilst the friends' unorthodox pitching style

raised smiles as well as a few eyebrows,

Danny and Phil did soon settle into the rigours of Den interrogation.

-When did you come up with this?

-I watched a programme on telly once,

and the guy was living on Palm Island in Dubai,

and he actually said, it all comes down to what barbecue you've got.

It's what the Joneses haven't got, you know. I want one of them.

-Have you sold any?

-Yes, two and a half.

-Two and a half?

Unusual figures, then, to match an unusual product.

But at least one of the car-loving multi-millionaires was intrigued.

So, you buy the non-original panels and you spray it?

But you can't have the Mini logo on there, can you?

-No, it hasn't got it on there.

-I can see it's not got it on there.

-I'm not blind!

-Sorry.

-We haven't called it a Mini.

I never said you did!

What I am saying is, it looks like a Mini, but it's not one.

It's a barbecue!

So, the Dragons enjoyed the pitch, but in the end it was

Deborah Meaden who summed up the feeling in the Den.

Sometimes you do something because you enjoy doing it.

I don't think you want an investor, because when you get

an investor on board, it can become a lot more structured and businesslike.

I think you guys have something here that you can sell yourselves,

and you are going to be able to enjoy doing it.

I'd think long and hard about taking an investor on board,

so I'm out.

-Thank you.

-Bye.

There are two basic ways of making money.

You can sell a few items at a high margin,

or you can sell a lot of items at low margin.

Our next entrepreneurs are in the second of those categories.

Luke Booth and his uncle, Chris Eaves, need to sell millions.

Will they convince the Dragons they can?

Hi, Dragons. I'm Luke Booth. This is Christopher Eaves.

We are after a £50,000 investment for 10% equity in the business.

Pack Four designs

unique and innovative packaging for the food and drinks to go market.

We currently have two products. Um..

Um, we're looking...

-We... sorry.

-Go on.

We are focusing on design

and manufacture of our product under the Pack Four brand.

We currently have two products.

The first pack we are going to show you is the "food to go" pack.

We design around the issues of drive through and takeaways.

We are currently in talks

with two of the largest fast food chains in the world.

And there is a possible one million trial order for Europe.

Our second innovative, unique patent pending product

is our four pint beer carrier, "drinks to go".

"Drinks to go" is currently being trialled at a major stadium

in the UK which has a capacity of 90,000 people.

It is easy to load and unload. All the beers are stable.

It only takes one person to take the beers out.

Thank you.

A rather nervy pitch from young entrepreneurs Chris Eaves

and his nephew Luke Booth.

The duo need a £50,000 cash injection to launch

their imaginative takeaway food and drink carriers into the mass market.

10% of their product design business is on offer.

However, Theo Paphitis is not looking convinced.

Chris, Luke. I'm Theo. I'm struggling.

I'm just looking at what's new in any of these.

If you go to the cricket, you can carry six pints in one holder.

But stadiums across the country are having issues

with cardboard carriers like you're talking about

being thrown up into the air and causing harm to people.

There's over 350 stadiums in the UK alone.

We are trialling 30,000 units with a major sports stadium.

Who's the major sports stadium?

-It's one of the Six Nations rugby stadiums.

-In England?

-In England.

We approached companies like the RFU.

They liked it and said, can you design us a four-pint beer carrier.

They pointed out a problem to us,

and we came up with a solution to the problem.

OK, so that is one part of your business.

And the other part of the business,

you've got an integrated bag with a handle in it.

Yes, but it carries food and drink in one.

OK, so, to summarise, you haven't actually reinvented the wheel?

The answer you are looking for is, "no, we haven't."

Everything is designed basically on something that is already existing.

All right, OK.

An awkward opening exchange,

and the pair's nerves have yet to settle.

So how will they fare under the scrutiny of Peter Jones?

-I get it, and I think it's clever.

-Thank you.

If the contract with the RFU is successful,

give me an idea of how much profit that would bring in.

We are looking with the RFU between 60 and 90,000 units a month.

Can you quantify it for me?

About 35 per cent at 12.5p per unit.

Yeah, but if we just stick to the basics,

you get the big-ticket as the wins like the RFU.

What I'm saying is, how can I get to a point

where I can quantify the value of what it's worth?

Sorry, I'm misunderstanding the question. What...?

I'm trying to work out what the value of these contracts are

to you as a company if you win them.

When we did the projections for this year's profits,

we also have interest from Solo Cup Europe, which are the people

that make the cups, that want to buy the product off of us

and sell it with their cups.

Guys, I think this is really ingenious,

but the bit that's really missing is the sort of business demonstration.

I think it's what Peter was saying, how do I get to understand

the value of this business unless you can give us some numbers?

So have you got numbers behind that?

We have got forecasts of sales of 320,000,

gross profit of 115, and then a net profit of 100,000.

So you have next to no operating costs?

We work from home and try to keep bills down a minimum

because we can't afford a plush little unit.

At present, because we want to push the business,

-and we don't want to take anything from the business...

-OK, but as an investor,

we need to understand what the potential is in this business model.

So what's your future business model?

Well, we want to develop new products

and maintain the IP for ourselves.

Sorry, I'm only interrupting you

because I don't want you to go off on the wrong tangent.

You haven't run a business before?

-No, I haven't got any business experience.

-And have you?

I pick up the phone.

You can make the sales,

well, that's the good end to get a handle on in the first instance.

So you are good designers,

but you are really looking for somebody to put money in

and help you structure a business to be able to grow into the future?

-Is that a fair summary?

-Yes.

The Dragons respect honesty, passion and determination,

but is admitting to such a lack of business nous a risky strategy

when looking for investment?

Duncan Bannatyne doesn't seem impressed.

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

Well, the fact that the product holds food in a completely

different way, it can hold drink and food together.

A bag inside an outer carrier.

That's been quite an engineering feat.

What do you mean by a bag inside a carrier?

A bag inside a cardboard outer.

So it's cardboard and you get a bag inside?

-Do you want to have a look?

-Yep.

There's no bag in this. Just chips.

There's a brown bag with a cardboard outer.

You're joking?

What's the benefit of this?

It just makes it easier for the consumer to enjoy their meal.

We've also got potentially this bag holder could rip open into a tray.

We've been in talks with one of the major fast food chains in the world.

-To do what?

-Basically, they've got a rebrand in Europe.

They want a variant of this design.

I can't understand why a huge company would go out and say

to someone else, come and design a box to put our product in,

and we'll give you loads of money. They could design it.

They can't, because they don't own the patent on that specific design.

We own the patent for a bag inside an outer carrier.

And I think that the possibility of that,

taking it to other avenues and other markets, like for new sandwich packs.

-Coffee and cake.

-OK.

So the biggest fast food seller in the world is going to

buy your product, and not only that, you can go

and sell it to other operators that do the same?

They would want exclusivity.

We've not agreed that yet, but that could be a consideration.

They will not buy millions of your products without getting exclusive rights.

I don't think it's worth a gamble at this point. I'm out.

A damning indictment of the future of their business

results in a first blow for the fledgling entrepreneurs.

Can Theo Paphitis be more forgiving?

Guys, why are you here?

If you've got all these wonderful things going on.

We want to develop the company further.

We also want to get these two products further off the ground.

At the minute, we're getting there,

but we really want to focus on what we're doing.

And what will the £50,000 do for you?

The 50,000 is going to invest into some equipment

and also some working capital for us

to fulfil the orders that are going to be coming up.

OK. You've got the carrier.

I like the way all the carriers sitting in that box,

don't take up a lot of space.

That's ingenious. Patent for that, I don't know.

The 6 million question. Until it goes all the way through...

And the big boys buy it, that's when it will be worth the money.

-Exactly. It could be worth millions or absolutely zilch.

-Yes.

-How much have you spent on this so far?

-Um... 15,000?

Student loan, instead of going out drinking.

Tell me about you two guys. What was your background?

Well, I basically studied transport

and product design at Coventry University.

Then I went on to study my MA at St Martins in London.

And then I went into industry,

and just finished working for a British sports car company.

OK.

I studied at Central St Martins also. I have done a BA in product design.

Since I finished, I've been working on the packaging,

trying to pull in clients to drum up some interest.

-So you graduated and set up your own business immediately?

-Yes.

-OK.

You are both incredibly bright, you can see that.

And do you know what, for designers,

you are incredibly passionate as well, which I like.

So really what you are asking for is 50,000 quid investment in you two.

Because we can't assess from what you've got here.

We have seen good packaging, and we see good packaging all day long.

Some of this stuff could come off.

It might be new stuff that will come off.

You're saying, invest in us

-to produce products that will make money.

-Yes.

Guys, I am going to make you an offer.

I am going to offer you the £50,000 investment in you two.

Into your company.

Where all your designs go into.

Um... But I want 30%.

Yep. OK.

-That was a nice offer.

-There you go, first offer.

-Thank you.

-Thank you.

A dramatic turnaround, and a financial lifeline for the duo.

But Theo Paphitis requires three times the equity initially on offer.

With three Dragons remaining,

can Chris and Luke negotiate a better deal?

Guys, in terms of making an evaluation, it is very, very difficult.

So the question is, do I want to take a punt on you

and what you clearly are, which is very talented?

I think I would.

But my worry is you haven't given me enough structure for me

to understand the business well enough for me to say yes.

And I think Theo has made you a good offer,

which I don't think I would improve upon.

-So I'm out.

-Thanks.

-Thank you.

-HILARY:

-Um...

I feel the same, because I think the risk to ratio is worth 30%, so...

And I think you've got a brilliant guy in Theo,

so I'm going to declare myself out.

Theo Paphitis seems to have outmanoeuvred his rivals

as two more Dragons decide against making an offer.

Just Peter Jones remains. Will he now choose to enter the fray?

Guys, um...

I think that you seem very impressive to me,

because you've come up with a couple of great ideas.

But Theo's made you an offer on the back of what you two guys

can hopefully create.

I'm not willing to take that risk.

I see that as one step too far in terms of a punt.

On the potential of more products in the future as well? I'm only 24.

I've got plenty of years left in me.

Well, we can work quick. We can work fast.

It only took us three and a half months

to develop this product and get it out there.

It is a close call.

I'm going to pass on the opportunity,

but I think this is a clever product.

I'm not convinced that you're going to create a business out of it.

-So I'm going to say I'm out.

-OK, thank you.

So, £50,000 for 10% equity, that's what we're after.

And you offered us 30% for 50,000, yeah?

We wouldn't have come here if we weren't looking for someone else

to come and invest into us, push the business forward.

-Where can we negotiate on the percentage?

-It's dead easy.

Anything less than 30% just doesn't cut it for me.

Honestly, it just doesn't make it worthwhile for the investment

in, not just money. It's time as well.

I made my offer first,

so any of the other Dragons could have come in and undercut me.

But actually, they didn't.

-So it tells me that I pitched it incredibly generously.

-OK.

Bearing in mind the risk-reward ratio.

If this comes off, can we sort out a buy-back clause?

We don't know... What does "come off" mean?

Well, if the trial goes ahead,

and then it goes into the rest of the takeaway chains around the world.

So, what you are saying to me is, why don't you take the risk

while it's rubbish, and if it comes really good, we will get rid of you?

Not get rid of you. We just want to...

We say that is going to come off. It will.

But guys, honestly, the time and effort

I'd have to invest in your business,

it is either we're all in it together, or we're not.

-Yeah. Do you want to go...?

-Yes.

-We'd like to take your offer.

-We are happy to take the offer.

-There, we've got a deal!

-I was worried.

-There you go. Congratulations.

-Chris and Luke have done it.

-Thank you.

They may have parted with more equity than they wanted,

but they leave with an influential new business partner on board.

-I'm backing two young guys trying to make it work.

-They are clever.

That they've come up with.

Working from home, low cost-base, not drawing any money.

And a patent.

My legs went to jelly when they were going down the stairs.

I was really nervous when I went in, but after a little bit,

I tried to compose myself and get on with it as best we could.

We're glad for the investment from Theo. It's really great.

Hopefully we will touch base with him

and see where we can push things forward.

Another day in the Den, and another couple of investments.

But there's one point I can't repeat enough.

Which is, of course, why I repeat it every series.

It may be tough getting the financial backing here,

but it's even tougher building a successful business.

The hard work starts now.

To find out more about what a typical filming day

for a Dragon involves, press the red button now,

where you'll get exclusive behind-the-scenes footage.

Goodbye.

-Next week in the Den:

-In my chair, why would you invest?

-Who's going to buy it?

-Frankly, you've done it wrong.

Whoa, whoa, whoa! It's my money you're talking about.

I've had a couple of boats, but I've never had a box. Never wanted one.

I've got a passion for pina colada.

Do you understand the dilemma you've left me in?

Everybody needs a little bit of luck sometimes.

I am desperately keen to make you an offer.

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