Episode 12 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.

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

Frankly, you've done it wrong.

In my chair, why would you invest?

It would be, actually, crazy of me

to miss an opportunity if there was an opportunity there.

Simple.

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 Dragons' Den.

After 11 weeks of drama and revelation in the Den,

the series is drawing to a close.

This year's entrepreneurs have one final chance to descend the stairs

and face our famous financiers in what could be a life-changing encounter.

Will our last batch of cash hungry hopefuls have what it takes

to convince the Dragons to invest?

Hi, my name is Naomi and this is my business partner Helen McAvoy.

We're here today to ask for 80,000

for an 8% stake in our innovative and exciting new brand Rocktails.

Rocktails is a frozen cocktail and inside each of these double-serve pods

is a unique bend of fruit and vodka.

They're 10% ABV and become in three flavours -

Frostberry, Coolcumber and Arctic Passion.

They're convenient, they're super-easy -

you simply freeze, leave, squeeze.

It's an innovative product

and there's nothing like it in the UK or European market.

We've got other products, flavours and pack sizes in the pipeline.

We are focusing at the minute on the UK market to really build our brand here,

before we go internationally in 2014.

We'd like to save you some Rocktails now to try

and we'd welcome any questions that you might have.

A pitch to get the Dragon mouths watering -

but will the 8% equity on offer be as appetising?

London-based entrepreneurs Naomi Kibble and Helen McAvoy certainly think so -

and need an £80,000 investment in their new brand of frozen cocktails.

Ooh, that's lovely.

Deborah Meaden looks impressed.

That's delicious. Absolutely delicious. Er...

So, you've got the product. Are you selling?

We've sold 2,500 units.

-And what does that mean in money terms?

-£6,000 turnover.

And where did you sell those 2,500 units?

We've sold 800 online, 1,100 between retailers and events,

and we've sold 600 in the supermarket that we're in.

So, the event business I get but I guess your model is going to be

based on you being able to sell it to a wider market,

-so I'm going to focus a bit on the supermarket.

-OK.

-So can you talk me through that?

What happened was when we originally approached them,

they said that this has got potential for a national order.

But obviously, with no trading history, we started regionally.

What was the initial order?

We only had a small order to start with - just over 100 units -

but they sold out so we had to restock quite quickly.

-Which supermarket?

-Sainsbury's.

-OK.

A tasty product, a deal with a major multiple and some assured answers.

It's a strong opening for the two friends.

Peter Jones looks to have something on his mind.

-PETER:

-OK, so you're offering a very low percentage.

-On the basis that you've sold £6,000...

-Mm-hm.

..why are you valuing your business at such a large amount of money?

The turnover that we project by year three is 1.2 million.

Yeah, but nobody normally invests in a projection - they invest in the reality of what's today.

-Why have you picked 8%?

-Well, it values our business at £1 million.

-Yeah.

-And we feel that that's a fair valuation for the potential in the market.

-THEO:

-Ladies, if you want to be treated seriously,

-you're going to have to stand there now...

-Yep.

..and justify your valuation.

We've already received some investment and it was valuing our business at the same amount.

-And that's what we're using our money...

-Right. Talk to me about...

Well, talk to me about the corporate structure, then.

-Who owns what shares?

-So, Naomi and I own 85% between us. They own 15%.

-And how much did they put in for their 15%?

-150,000.

A good retort from the pair,

who are handling the tricky financial questioning with some aplomb.

But Hilary Devey wants to take a different tack.

Who's going to buy it...

..when you can buy ready-made cocktails?

In fact, I've got a passion for pina colada...

..and you can buy it in little cans and they're very good.

This is one of the big things that came out of our focus groups -

the cocktails that you're talking about,

a lot of them are pre-mixed, sort of, alcopop-style cocktails.

This is a bar-quality, bar-strength cocktail.

Do you not think that the record of sales just...

totally kills what you're trying to say?

I think this is what we're here to get -

some investment to market the product.

Cocktails are on a massive trend.

They're growing exponentially, so we saw the gap in the market and

sort of crafted the product around that to suit the consumer needs.

I don't think this product will sell

in the volume that you think it will.

And therefore, I'm not going to waste your time

and I'm going to declare myself out.

A first setback for Naomi and Helen, as they lose their first Dragon.

And Deborah Meaden has made up her mind, too.

There's lots of stuff I like about this. This is a different product.

This isn't the same as a product in the can - it's a frozen product.

That's its USP.

My worry is the sales.

And do you know, I'd almost have been happier

if you haven't got yourself into a major supermarket chain,

because they've had an experience that isn't super.

When they like a product, boy can they get it out there,

boy can they latch onto it.

I'm not saying stop it, I'm just saying I'm not convinced

there's the scale of the market you think there is.

So, I'm afraid I won't be investing and I'm out.

Thank you for your time.

Girls, I really want to encourage you to be entrepreneurial

and it's brilliant you're here.

But the market for this, in volume to be a business, does not exist.

-They... Can I interject?

-You're going to anyway.

-They are there.

You look at the US, for instance -

this is a product that is huge in the US

and we're the first on the market in the UK with a product of this nature.

OK. You've got the beginnings of something special as people.

What you haven't got is experience.

You will make your money somewhere else, at some stage -

I'm sure of that.

But I can't invest in this, so I'm sorry, ladies. I'm out.

Two more Dragons walk away from the deal.

Now only Peter Jones and Duncan Bannatyne

can save the young entrepreneurs from complete failure in the Den.

-PETER:

-I do admire what you've done.

But I think that there's a major issue here with the way

that you've taken this product to market, with one of the large retailers.

Frankly, you've done it wrong.

And I don't want to be Mr Know All

but I know where the pitfalls are and I know where the issues are

for you to have a chance to grow this business.

And sometimes, it IS about relationships, it IS about contacts.

-Yeah.

-It's about a little bit of luck.

But I think that you coming into the Den

and offering such a small amount of equity...

..is where, potentially, your luck runs out.

At the same time,

everybody needs a little bit of luck sometimes.

I'm going to make you an offer.

OK.

I'm going to offer you...

£80,000...

..but I'm going to make things a little bit more complicated for you.

Because I'm going to need a pretty decent return...

..I want 40% of the business.

A dramatic turn of events.

Peter Jones has offered the duo a financial lifeline, but at a cost -

five times the equity they initially wanted to give away.

With just one Dragon remaining,

will Naomi and Helen be able to negotiate themselves a better deal?

Let's list the places where you want to see a cocktail that isn't a bar.

Hospitality. Stadiums. Er...weddings.

Airlines. Festivals.

So we're involved in Feastival, which is happening in Victoria Park

and we're going to be one of the main cocktail suppliers.

They're expecting a million people footfall over the 17 days.

OK.

-We...do an awful lot of weddings.

-Yeah.

-..in our hotels.

-So I buy an awful lot of alcohol.

-Yeah.

So it would be, actually, crazy of me

to miss an opportunity to invest if there was an opportunity there.

But this valuation of a million pounds is far too high.

I'm going to offer you the full amount - £80,000...

I want 40% of the company.

So the company's worth £200,000, based on that offer.

Can we go and... Go to the back of the room?

-THEO:

-Go to the back of the room.

-OK, thanks.

-Before you do, let me just tell you...

If Peter was agreeable,

I'd also like to share the offer with Peter so we'd get 20% each.

So if Peter would agree to that, you've got a choice of me

or Peter or both of us.

Peter?

I would actually be happy to share the offer with Duncan,

which gives you two Dragons.

OK, thank you.

(I think we need to say, "Well, if this is successful, can you drop down?")

(We want to keep the majority.)

Er, I think that we would be...

We're really honoured to get an offer.

What we would like to see is, er,

maybe relinquishing some shares if we hit a certain point.

Our thoughts were, potentially, £1 million turnover.

So if we hit that point, you would relinquish 10% -

so 5% each - and you would go down to a 30% overall shareholding.

I think if you're turning over £1 million,

you're making an awful lot of money so you don't need 10% back

because you're going to be very, very rich at that point.

So I think you should accept the offer as it is -

40%, 20% each.

£80,000.

I agree with Duncan, not to negotiate on the revenue point.

But if you turn that to, say,

"If we make half a million pounds' profit in a year," then, yeah, I would.

There's clearly a dividend coming to Duncan and I as a result of that

anyway, if we decide that that's the right thing for the business.

If, obviously, Duncan would consider that on a profit basis...

If you make 500,000, we both give you 5% back -

is that what you're saying?

Yep.

-OK, yes, please. You accepting?

-THEO:

-That's a deal - well done.

-Well done.

-Thank you.

-Naomi and Helen have done it.

The negotiations were tense but they leave with two influential multi-millionaires

as their new business partners.

Now, the Den has played host to guests from all across the animal kingdom

and this year has been no different.

But Merseyside's Steve Forshaw smashed the record

for bringing the most creatures into the Den at once.

He came looking for investment in his new environmentally aware initiative.

The bee is in a lot of trouble and in many parts of the world, it's in terminal decline.

So we came up with a very simple idea - that we would hire bees

to businesses, schools and private individuals.

A solution, perhaps, to a grave global problem.

The Dragons weren't convinced.

Is this a trading business?

-No, we just started two or three weeks ago.

-Right.

Have you made any money?

-We haven't made any money as yet.

-Nothing? Nothing.

-So why am I going to treat you seriously?

-You'd be amazed at...

the interest that there is. Everybody's so fascinated with bees.

The value it brings is priceless.

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

These multi-millionaires don't hand over their hard-earned cash easily

and they're less inclined to do so

if they can't see a way to make a return.

Is it a business? Cos you've not proved it with your pitch yet.

I think so, yeah. The majority of beekeepers that I meet are very good at keeping bees.

They're not very good at selling the idea of keeping bees.

With all due respect, Stephen, you're very good at keeping bees

but you're not very good at selling the idea of keeping bees.

-No, clearly.

-So you haven't really improved anything, have you?

A bit of well-meant criticism.

But while the ambitious apiarist's good intentions were never in doubt,

unfortunately for Steve, his investment dreams certainly were.

I had two beehives.

Unfortunately, mine were killed by wasps,

which I have to say is more traumatic than you think.

So I don't think it's mad because bees are reaching critical levels.

But you have nothing that we couldn't replicate - that anybody couldn't replicate.

-I won't be investing, so I'm out, Steve.

-OK.

When pitching a potentially revolutionary new product

to the Dragons, it's a good idea to offer a demonstration.

Surrey-based entrepreneur Jeff Meers brings with him

two technicians to make sure his demo goes to plan -

but will the Dragons see opportunity in the innovation?

Good afternoon, ladies and gentlemen. My name is Jeff Meers.

I'm here looking for £100,000 investment

for a 20% equity stake in my company Carkoon.

We've got two prototypes here and, obviously, it's a baby seat.

The first thing I need to say about this new kind of baby seat,

er, is that it has an air shield.

Adults - we all have airbags in our car.

Unfortunately, the children are just sitting there, open to the elements.

So, I would like now to do a demonstration,

which the technician is going to set off.

This inflator is identical to that which is in every car that

we all drive around in every day, so it's no different, no worse,

which will have a bang.

So I would urge you just to think of just covering your ears with your fingers.

As you can see,

this buys precious time for the baby to be rescued in an accident.

OK. The quick-release handle is another feature of the baby seat.

It's very important for emergency services to be able to take one action

and actually remove the baby, OK?

So maybe I could get Michel from Spark, our design partners,

to demonstrate how this works.

Click it in, swivel and it clicks again and it's rear facing.

OK, so that's the product. Thank you.

A safety-conscious design for the 21st century.

Company director Jeff Meers believes his potentially life-saving prototype

is worthy of £100,000 investment.

In return, he's offering a 20% stake.

Duncan Bannatyne is first to interrogate the proposition on offer.

Jeff, how serious does the accident have to be for that to flip over?

It's fixed by the ISOFIX to the core of the car.

When the car has a shunt - particularly if it's a serious one -

that will be transmitted directly through to the seat.

Well, you have to excuse me for my ignorance.

Explain to me, what is an ISOFIX?

-Michel?

-Yeah, I can answer that.

A seatbelt is actually the old-fashioned way

of connecting a car seat.

Nowadays, the car seats are all fixed with these bases.

ISOFIX is the current standard, which is mandatory by law for all

new cars and has been for most car marks over the last ten years.

OK. But the baby's strapped in. It's got its back to the...

where the accident is. I don't really see how it actually enhances the safety of the baby.

Well one of - ONE of -

many factors that happen in an extreme violent car crash

is that lots of objects go flying around within the car.

Broken glass, pound coins - any items lying around.

So you're saying the purpose of this

is in case any objects are flying around that would hit the baby?

Two elements.

This stops fire and flying objects and the handle enables the baby seat

to be removed quickly by the parent or emergency services.

Sure-footed answers from the practised businessman.

It's a good start.

But how will he fare under scrutiny from Theo Paphitis?

-THEO:

-Jeff, let's assume that a Dragon gives you £100,000.

What's the business plan? What's the numbers?

We would use that £100,000 to get this to final prototype CAD designs.

Just to quickly explain, one of the reasons

why I want to get a Dragon involved is to actually help us find the best route to market

because in the first instance, we can actually go to market ourselves.

But we also have a plan whereby we work with the car-seat manufacturers.

We've already been to two and had a tremendous response from one.

They sent some over for us to start playing with,

from which we produced this prototype.

You going to be paying them a royalty for that?

Well, there are a number of business models that we want to explore.

We haven't made the decision.

We've got a very good licensing agreement possibility,

or do the whole thing ourselves.

Obviously, at that point, we would, of course, need to raise more money.

But if we work with that supplier...

Jeff, I'm going to have to get a bit more detail. Talk to me about what your projections are.

May I bring my CFO, who's my business partner, in to talk about that?

We could let the design team go.

-Guys, thank you for your time.

-Thank you.

-Hello.

-Maybe you'd like to introduce yourself.

My name's Peter Jones.

-THEO CHUCKLES

-Socks as well.

-Wearing the same.

-Ah!

All right. Just give me the quick headline figures for this product.

We have a fully documented business plan,

which assumes that we actually raise cash

to build the product from scratch,

to market it, to sell it, and that -

to be honest - requires a couple of million pounds' worth of capital.

And year five reaches approximately £70 million -

between 30 and 40% net margin. However...

..the idea now is to just raise a fairly small amount of money

and license the technology to an existing car seat company.

The first people that we contacted in respect of that idea

was a company called Orbit Baby Inc.

It's an American company - very large in the States -

and Orbit, three days ago, sent not quite a letter of intent

but a very comfortable letter in terms of,

"Yes, we like that strategy and we would like to do that."

Still didn't give the numbers. Just that question and I'll shut up for the rest of the time.

Just answer that question.

I have not yet developed a revised financial plan

to take account of this revised...

-So you'd like me to give you £100,000 on a wing and a prayer?

-No. Not at all.

-DEBORAH:

-Peter, can I ask you a question?

-You can, certainly.

-You're the numbers man?

-I am.

I was a bit disappointed that when Theo asked you for some numbers,

he got lots of words but not many numbers.

-Well, there are...

-But the two million... So your two million plan -

what would that do to any shareholding that goes in now?

So say you reached a deal in the Den today

and we faced you needing to raise another 1.9 million...

Deborah, before I go into answering that,

that is the whole point of the plan, to avoid raising £2 million.

-So the two million plan's out of the window?

-Exactly.

-OK, let's focus on the £100,000 plan.

-Yes.

So, £100,000 - what is that going to be spent on?

Very, very straightforward - Spark Design,

who are the developers, who are the designers...

-How much?

-Approximately £80,000 will be to them.

The balance will be to patents lawyers, with a few overheads.

We're confident that for £100,000,

we can get that to a product which Orbit can sell.

We haven't gone through numbers of how many they can sell

but we're confident that we could get something like a 10% margin commission.

So the truth of the matter is,

we don't have any idea what the return on the investment is,

we have absolutely no idea what the size of the market is.

I don't understand that.

-Do you understand the dilemma you've left me with?

-I do understand the dilemma.

-THEO:

-Jeff and Peter...

To come in here just saying, "Guys, take a punt,"

without any homework, is ridiculous.

That's not a way to get an investor to invest.

This is not your finest moment.

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

Strong words from a disgruntled Dragon.

Jeff and Peter lose their first hope of investment.

Will respite come in the form of Peter Jones?

Peter, I think you're getting a hard time

and I think it's not your fault.

What you're clearly saying to me is,

"We've got a product that we think we can license.

"I've no idea of the income that it's going to generate."

I find that quite honest.

You've taken, in my opinion, an honest route to say,

"Look, I've no idea. I really haven't an idea." Is that what you're saying?

That's basically what we're saying because... Yes, it is.

But there's a product that was invented in 2006 -

not only provided a cover

but it actually provided for the baby to take impact.

-And I was the one who was involved with it.

-OK.

I can tell you that that has taken since 2006 and as we sit today,

seven figures and above and it's still not fully approved.

I'm not involved with it today... for that reason.

I do not see that you'd be able to take a product such as this into

the marketplace without spending a considerable amount of money.

And that's the only reason why I'm going to say I'm out.

-Thank you for your kind comments.

-Thank you.

Pitching to experienced investors is a risky business.

And in this instance,

that experience seems to have scuppered Jeff and Peter's chances.

But there are still three Dragons left.

Will Duncan Bannatyne find a reason to invest?

OK, thinking about this,

I'm a bit confused as to how all this developed and where you're going with it.

And if I can't understand what's happening,

then obviously I can't invest.

So for that reason, I'm out.

-HILARY:

-Let me tell you where I am. Basically what you're saying is,

if we like the product and we think it will sell, then we invest.

But A - I don't like the product.

B - I think there's adequate car seats out there.

So on that basis, I'm afraid I find it uninvestable for me.

So I'm very sorry but I'm also out.

Jeff, in my chair, why would you invest?

The only basis on which I would invest from your perspective would be if you believe

that this could be a better and more safer car seat,

and the belief that £100,000 would get us to two patents -

which I think are very valuable -

that would be fully design-ready and then we can do partnership deals.

Jeff, Jeff, you've got it! Do you know the word you've said?

-You've absolutely bang on got it! I've got to believe that.

-Yes.

Your job is to help me believe that.

And that's all you've got to do with an investor.

Which we haven't done, clearly.

So I'm sorry, but I'm out.

-Thank you for your consideration and comments.

-Thank you.

Dignified in defeat, Jeff and Peter leave to the sound of strong Dragon opinion

but without the cash they badly need.

This literally was a last-minute change in strategy.

We failed to communicate that.

Peter Jones obviously explained that he'd already had a failed car seat,

so that was a little bit difficult to come back from.

But I tell you - I'm a very determined man.

This won't stop me or slow me down.

Entrepreneurs are a creative lot

and come up with all sorts of solutions to all sorts of problems.

Aretha Solanki from South London

hoped the Dragons would share her irritation with a specific wardrobe malfunction,

for which she thought she had just the answer.

Most women understand that simple movements can mean

that your tights and leggings shift and slide out of place.

So the proposed solution is the T Strap.

The top end is attached to the side of the user's bra,

-whilst the bottom end is attached the user's tights.

-Can I look at one?

Of course you can.

A common predicament, perhaps, but one Dragon seemed to come at it from a somewhat different angle.

I think, you know, there are some things that, in your clothing, aren't perfect.

Sometimes my socks fall down and I have to roll them back up again.

But it's whether or not you'd want to wear this to solve it.

Whereas Hilary Devey wasn't convinced,

Deborah Meaden was at least happy to explore the idea.

Actually, I do understand that tights do move and, actually,

sometimes you get the waistband will slip a bit and it's slightly out of line.

But tight waistbands are really quite strong.

So if they slip, they could really drag the side of the bra

down with it and suddenly, you might feel comfortable around here but

boy are you going to start feeling very uncomfortable everywhere else.

Er, I wear these so I know that they work.

In the end, all eyes and ears were on the Den's resident industry expert.

In all my years in the lingerie industry,

I've not heard this problem.

And to be honest with you, these are detachable suspender straps

and there's millions of them around.

So I'm not going to invest in this product,

but I will allow you to trial it in our stores and then we'll all know, won't we?

-Thanks. That's great.

-But...

-I'm out.

-Thank you very much.

-Good luck.

-DEBORAH:

-Good luck with it.

-Thank you.

So far tonight, only one business has been deemed

worthy of investment by the multi-millionaires.

-OK, yes please.

-That's a deal! Well done!

Still to pitch, will any of these entrepreneurs secure the cash they badly need?

Next up is former naval officer Mark Tilley.

Now, he has a product that has two different uses -

which has got to be better than one, right?

Well, let's see what the Dragons make of it.

Hello, Dragons. My name's Mark Tilley.

The company is called Boatbox Ltd

and I'm here seeking £100,000 in return for 16% - one, six - equity.

Essentially, the product is a vehicle roof box that,

very simply and easily, is able to be taken off the vehicle -

off the base unit -

in a matter of seconds, and then converts to a proper little dinghy.

It comes as standard with the oars, the rowlocks and the seat.

We have the ability to upsell, with an optional sailing rig

and then an electric outboard motor.

We're hiding under here a petrol outboard.

Patents - I've filed a patent application.

We've now got lawyers doing the searches, looking for prior art.

It's early days but to date, we do believe it to be the first product of this nature in the world.

That completes my pitch and I welcome any questions, please.

A calm and measured pitch by Mark Tilley.

The Dorset-based inventor badly needs a £100,000 cash injection

in his innovative multi-purpose car roof box design.

In return, he's prepared to give away a somewhat precise 16% share.

Deborah Meaden looks unconvinced.

Er...

-why?

-Why?

Er, well, probably the easiest way to answer that is to explain where I've come up with the idea.

Camping in Brittany, I was sat at my deckchair.

A family from the UK turned up and they had a roof box.

I watched them open the roof box, take out the camping equipment,

set up their pitch for two weeks. For that two weeks, that box absolutely nothing. It was redundant.

I thought, "With a little bit of work and a bit of tweaking, you could get some enjoyment out of that product."

It gives it a dual purpose.

So, basically, it's a roof rack, which already exists, er,

which can also double up to be used as a boat.

Yes. I think, more importantly, the price point is £595.

I've exhibited at four international shows

and I had no negative feedback with the product.

The only comment I got a few times was, "I've just spent £500 on a roof box,"

and they're quite frustrated by that because they would far rather have bought this product.

This is a proper little boat.

Understated, perhaps, but Mark's passion for his product is clear.

And it seems it's a passion shared by Theo Paphitis.

I think it's ingenious.

If you are going camping by a lake or somewhere like that,

it's a marvellous thing to be able to have with you

and just play on the water, go fishing...

-The 6 million question, though...

-Mm-hm?

Can we make money at it?

Currently, it costs £350 to make the product.

The reason I'm looking for the £100,000 of investment

is so we could actually purchase our own vacuum forming machine.

Doing that, we could take out close to £120 of cost,

which would give me a more workable margin and enable me to go out

and get a truly good dealer network.

And what will that result in, financially?

-It means in the first year, we would turn over £129,000.

-Mm-hm.

Our gross profit on that would be £54,000.

The net would be 26.

And the sales would come from where on that number?

Cos that's a lot of...car boxes.

I've got a strong order book.

I've got 42 firm orders at the moment, which are deposited.

We're in the process of making the first hundred.

And the camping superstore Go Outdoors trialled the product

and once we get the first production units, they've asked me

to visit them in head office again for further conversations.

Ambitious plans and a solid grasp of his market. Mark is doing well.

But how will he fare under the questioning of Peter Jones?

OK. You mentioned that you want 100k for 16%. Why are you...

What's the 16%?

I, er... At this point, I should... I have actually got an investor on board - a Norwegian investor.

-And what they invest in the business?

-They invested, last year, £30,000.

-Yeah.

And I gave him 30% of the company.

And you want me to put in over three times that amount

and get half that equity.

The key point is, the money that the Norwegian chap Thomas invested

enabled me to make the production tools. And now we've ordered the first hundred.

-Do you regret giving him 30% for £30,000?

-Absolutely.

But at the time, it was that or call it a day.

-DUNCAN:

-Just one thing worrying me a little bit, Mark.

Let's just suppose for a minute that somebody here offered you

the money for something like 30%...

-Mm-hm.

-..and that reduced your equity to 40%, how would you feel then?

I would struggle with that, to be honest, Duncan. Er...

I would struggle with that.

I'm prepared to get to the point where...

I come close to giving away 30% and I maintain 51%.

I still don't understand the 16%.

-16% plus 30% is 46%...

-Yes.

-So the point is that you'll go up to 19%?

-No, beyond 19.

-So you're going to dilute the other investor without...

-Correct.

So he's willing to be diluted by 20%?

We had a meeting at Gatwick Airport and -

very kindly, in my view, cos I wasn't expecting him to offer to dilute - he absolutely has.

He's a gentleman.

Mark, when you need the money, your investor calls the shots.

You know, you shouldn't kick yourself over giving away 30% -

you needed £30,000, you found somebody who was going to give it to you.

Without that, there would be no business.

I think the issue for me lies in the structure of the deal.

I don't think there's enough left in it,

certainly for the kind of returns that I would want.

For that reason, I'm afraid I won't be investing, so I'm out.

Some reassurance for a new investor but not enough for Deborah Meaden.

Mark loses his first Dragon

and it looks like Duncan Bannatyne has made up his mind, too.

Er, Mark, I see it and I like it but I just...

I don't know how many people have got boxes

and how many people have got boats, who want to have both.

I've never had a box. I've had boats but never a box - never wanted one.

Because of the recession, a lot of people are downsizing to smaller cars for the fuel efficiency

and, of course, young families still need the space in the car - so the roof box market's actually growing.

I think it's... It's a lovely product - it's great.

I just don't know how much of these you could sell.

I don't know how many people want a boat that goes on the roof of the car.

And so I've got to say, I'm sorry, Mark, I also am out.

Thank you very much, Duncan.

-HILARY:

-Mark, can I tell you where I am?

I'm not particularly a boater

but I think I probably would go out and buy that,

to mess about on the lake and go fishing et cetera.

And I can see how passionate you are about it.

But unfortunately, passion doesn't necessarily create profit

-so I'm out.

-Thanks very much, Hilary. Thank you.

-PETER:

-Mark, er, it's great. It is.

And I can see you getting your pre-orders.

I can see you financing through a bank.

I can see you making a decent living...

..but I'll never, ever see my £100,000 back if I gave it to you.

-So that's why I'm not going to invest today, Mark, and I'm out.

-Thank you.

Er...so, unfortunately, I'm your last hope.

-That's right.

-It...

It's been great seeing this,

and I'm a boater, as you know. I enjoy boats.

In Spain, I've got a property there and I've got a big box.

I think I must have paid a similar price for it.

-And I would love to have bought this.

-I hear that all the time.

-Er...

-THEO SIGHS

Mark, what's the maximum deal

that you are prepared to do for a new investor?

OK, with no negotiation...

..25%.

That keeps my 51%.

-That would leave Thomas at 24.

-Yes, yeah.

THEO SIGHS

Er...

..I am desperately keen to make you an offer.

But...

-..I'm struggling to see how I put £100,000 in...

-Mm-hm.

..and end up with 25%.

My background is in high-value yachts

and I've never sold a product that's been so well received as this. I've never had a negative comment.

Mark, I can't see it.

-As much as I want to help you...

-OK.

-..I can't see it. I'm sorry.

-All right, thank you very much.

-I'm out.

Thank you very much. Thank you.

-DUNCAN:

-Thanks, Mark, good luck.

-HILARY:

-Good luck.

Mark got close. He received plenty of plaudits but it was the cash he badly wanted.

He leaves with nothing.

I loved that! I LOVED that!

Others who tried and failed in the Den

included dapper Craig Amour from Essex

with an invention he believed could pave the way to his and the Dragons' fortunes.

If you go into your local DIY store,

you get very helpful guidance on how to build a patio.

It will tell you to use 10mm spacers.

But when you go to look for them, they're not there,

hence this extremely simple concept of bespoke paving spacers was born.

Simple.

Simple perhaps, but is it necessary?

Theo Paphitis wasn't so sure.

-Mrs P, when she lays our patio...

-Yeah?

-..she gets big strips of wood, puts it down, lays the slabs...

-Yeah.

And it's perfect. So why would she want to use that?

Well, because you need one at every single joint.

No, no, it's just a long piece of wood. Every row of tiles, she just moves it.

And she's never needed to use these.

No, you don't, in the same way that with regards to wall tiling,

if you go back 20 or 30 years, people used matchsticks.

And they're fine and they work, and they still work today

but you don't use them at all.

They use purpose made spacers.

A confident defence of his product, then, but sadly for Craig,

the Dragons didn't feel so confident about its money-making potential.

When you launch a product that is easily replicated,

and it becomes just down to volume against cost,

somebody such as Wickes or B&Q - these guys, as quick as you can say, "Peter Rabbit,"

they're going to be bringing out their own product.

I can see a market and I think you'll earn a little bit of money from it.

-It's not sufficient for me to make a return so I'm out.

-OK, Peter. Thank you.

What do you get when you mix some fabric,

a giant fan and an entrepreneur?

You get the eye-catching business of John Spence,

who is next to face the Dragons.

Hello. My name is John Spence.

I'm managing director of a company called Megaflatables.

I'm here today to offer 10% of our business for a return

of £37,500 investment.

In the inflatable world that I live in, there's a product called

Air Dancer that you may have seen before.

It's a 20-foot stick guy and when you flick the fan on,

it sends air up through the design.

The air has to leave the product and use through the arms,

through the head and that's why it goes a little bit crazy.

About 18 months ago, we thought about the product

and we changed it slightly.

And our product the Megaflatable, when you flick our fan on,

it sends a re-circulating motion through the design.

What that enables us to do is to make up to 20-feet designs

to be pretty much any design you want it to be.

So we can make, in reason, any shape with any branding, any core messaging,

or any colours or anything you can think of to promote your business

and try and gain additional revenues into your company.

If it's OK, I'm going to switch the product on.

Immediate impact is what most businesses want when marketing their product -

and John Spence from Essex believes his new inflatable designs provide just that.

In exchange for 10% equity,

he needs £37,500 to broaden his customer base.

Theo Paphitis wants to get straight down to business.

-Now, Megaflatables - how long has it been going for?

-18 months.

-A fairly new pup.

-You're a new pup?

-Yeah.

How much have you turned over this year?

We've, er, turned over, er...

120,000 revenue in the first four months of this year.

-Right. And you're in profit?

-Yes. We're... Yeah, we're just there.

-OK.

-You own it all?

-I'm 50% owner of the company.

-Who owns the other 50?

-My partner, a gentleman named Kieran.

-Right. So why isn't he here?

-He is, he's outside.

-What's he doing outside?

Well, the way the company's set up is that I...

As a company, I run everything. Kieran is more the financial side.

-What does he do?

-He owns, er, a quite large courier firm.

-Quite large? What are they called?

-Addison Lee.

OK.

-Get Kieran in.

-Shall I get him in?

-Yes, please.

-OK. Thank you.

It's a risky decision not to pitch alongside such a substantial shareholder.

A Dragon needs to know who they might be in business with.

Hi.

This is Kieran.

But will this early summoning help or hinder John's investment cause?

-Hi.

-Introduce yourself.

-I'm Kieran Griffin.

I've known John since we were five years of age.

John came with this idea about the Megaflatables,

which I thought was a good idea, and the figures seemed to make sense.

How much have you put in?

I've put in 300,000.

-PETER:

-Kieran, you've put £300,000

into a... a childhood friend's business?

-Yeah.

-Are you willing to write that off?

That will... I'm not willing to write it off.

It is loaned to the company and I would love to get that back

but I'm not looking to take it out of the company at this...

-And how much of that 300,000 does the company have left?

-Nothing.

-Sorry?

-We've invested all that money into the company

to get it to where it is, through websites and so forth.

-Yeah, we had stock...

-Yeah, it's stock.

So you have money still in the business,

in the shape of either stock or assets or cash?

-Correct.

-Yes.

The duo's need for a further £37,500

is dwarfed by the amount invested so far.

But at least they can demonstrate that some of that value

remains in the company.

However, something seems to be bothering Duncan Bannatyne.

-Why is there no "in"?

-Sorry, sir?

-Why is there no "in"?

-Why's there...?

No "in".

-Why is it called Megaflatables, not Mega-inflatables?

-What?!

DRAGONS CHUCKLE

Why is there no "in"?! Did you really ask that?

-Someone already has that as a domain name.

-Yep.

-There's a lot of small bouncy castle companies in the UK.

-OK.

What would one of your customers expect to get as a return investment if they bought one of your products?

OK. Pizza Hut - they called it a "ticket seven" product.

Every time our product went outside their premises, they got seven sales through that day.

-What you're saying is, they got seven extra customers that day?

-Yeah, they attract the whole thing.

-Why would they advertise an individual product and pay for it?

-To give you an example of that one,

this is a little champagne bottle.

So what their current campaign is - two of our products,

either side outside the store,

get people to look and hopefully come in and spend money.

But we're currently working on a 20-foot muesli and 20-foot, er,

apple juice.

-DEBORAH:

-John, it's one of those lovely things

that's really very simple to understand. You know, so can you tell me, how much do they cost?

The product costs us £310. We sell it...

-Depending on the design, it's either £695 or £795.

-So...

So, basically, if I was a customer and I could buy the base unit,

-could you change the envelope on top?

-Exactly right.

So, where we are now -

an average month will be between 30 and 40 contracts.

Currently, we are on track to being a kind of 1½ to £2 million a year company in the UK.

Additional revenue streams and promising projections,

but the assured pair are yet to receive an offer.

Can Peter Jones see a money-making opportunity?

-One thing that was going through my head was events.

-Yup.

Because they are spending money on displays.

And they are pop-up displays - the aluminium ones -

and then they go back, roll back up and they...

-They look OK.

-Yup.

-Whereas these, I was thinking...

-..maybe one or two of them, it could work.

-They do.

We have them as a range called Location Beacons.

So McDonald's is an example.

They chose Location Beacons with "drive-thru", with an arrow.

That's what they use it for.

Kieran, have you used your contacts in your business, or would you...

Are you willing to open up the contact base of your business for direct mail?

Yeah, we could... I haven't but it's something that's potential.

-But you would?

-For sure, yeah.

OK. I'm going to make you an offer.

I will offer you...

..£40,000 - so more than the money you've asked for...

..but...

..I want 25% of the business.

Being offered more than you come in for is an unusual occurrence in the Den,

but the equity demand is 2½ times more than John and Kieran initially wanted to give away.

However, with four Dragons remaining, can they get closer to their original valuation?

-HILARY:

-Why 10%?

We didn't want to price ourselves out of the market.

We want to find a partner here today. That's what we've come to find.

We wanted to try and make it as easy decision for you was possible.

But you're not going to find a partner at 10%, are you?

SHE CLICKS TEETH

I will match Peter's offer.

OK. Thank you.

OK, so this is not the newest thing I've ever seen

but you're two really smart guys and they're neat.

-I think they'll make money, so I'm going to make you an offer.

-OK.

So I'm going to offer you all the money - £37,500...

..and I want 20% of the business.

Thank you.

Dragon tactics come to the fore as a wily Deborah Meaden undercuts her rivals.

Will Duncan Bannatyne now choose to compete?

What I don't get is, when you pass the supermarket,

they have big signs with their name on it.

-So you know it's a supermarket. You know what supermarket it is.

-Yes.

So they're not going to advertise a supermarket outside a supermarket.

I'm still not convinced of the benefit to retailers.

Er, so, for me, it's not...

It's not a great business investment.

I'm out.

Guys, I'm going to tell you where I am.

I think there's no question in my mind this makes a statement.

I've seen them. The fact is, it's... The novelty of it and how it then...

The novelty dies off. I'm going to wish you luck and I'm out.

Right. OK. Thank you, guys. Thank you.

Three winning Dragon investors, two different investment offers

and at least one key dilemma -

whether to opt for more money or to give away less equity.

A tough decision for John and Kieran.

Er...th-thank you all very much.

Er, we are wondering if two Dragons may be better than one Dragon

and if any of you would be open to working with any of the others.

I don't think there's enough equity in it.

I think because it's such a small amount of money - it's £40,000 -

it...wouldn't be focused, I don't think, enough

with more than one Dragon.

OK. Ladies, thank you very much. Really do appreciate it.

-Peter, we'd love to accept your offer.

-Wow!

-THEO:

-There you go!

-By hook or crook, you got there. Thank you very much.

-Thank you.

John and Kieran have done it.

When the multi-millionaires choose not to share,

that higher stake secures more Dragon focus.

It's the end of series ten of Dragons' Den.

Business is actually simple. People complicate business.

And what a series it's been!

HE SCREAMS

94 businesses...

-THEO:

-Not bad.

-..descended the stairs...

-Georgia!

..to pitch for investment, hoping to secure a badly needed cash injection...

I've got to make you an offer.

..and a powerful new business partner to boot.

Do you WANT an investor?

-Well done.

-Deal done!

A record-breaking 20 deals were agreed in the Den this year...

You've got a deal!

..shaking hands on an astonishing £1.75 million of investment.

We're going to make a little fortune, you and I.

After many months of intense and nerve-wrangling preparation,

some of the entrepreneurs will be pretty pleased with how it all went...

I've got a funny feeling you might end up with five offers.

You haven't just done well. I mean, you've done remarkably well.

..although many others may not have gone quite as originally hoped.

Now, you're not listening to me and I buy this product.

Do your homework.

I'm not going to waste my words any more.

One of us is barking mad.

(It's not me.)

As always, there's been a heady mix of the inventive and surprising.

MACHINE: 'Will you take this person to be your very best friend?'

Experiencing the Den at first hand can be quite daunting.

-Yeah?

-We'll gladly accept.

THEY CHEER

Much easier to watch it in a more comfortable environment.

Told you!

'My whole life has changed.'

Everything's gone topsy-turvy, upside down and exciting.

So the Den doors are now closed for business

but not before we say a big thank you to all those brave entrepreneurs

who applied to us this year.

DRAGONS CHUCKLE

I've never, ever, ever seen... What have you done?

If you think you have what it takes to face the fearsome investors,

why not visit our website - bbc.co.uk/dragonsden -

where you can apply to enter the Den online.

Goodbye.

Later in the year on Dragons' Den...

Hello. I'm known in the industry as Mrs Christmas.

-Which is the Christmas one?

-That's the Christmas one there.

-Which one's the Christmas one?

-That's Christmas one?

Can I have a cup of tea, please?

Children's jumpers. JUMPER SQUEAKS

-Jumper dresses, dog jumpers.

-Maybe I could wear one on Christmas Day.

That's a gin punch. The green one is Sexy Twist.

# Pull my cracker, it's Christmas. #

Bing Crosby, Cliff Richard and Noddy Holder.

And now we've got...you.

Subtitles by Red Bee Media Ltd