Episode 9 Dragons' Den

-EVAN DAVIS:

-These are the dragons.

Five of Britain's wealthiest and most enterprising business leaders.

Over the coming weeks,

they'll make or break the dreams of dozens of budding entrepreneurs.

It's just a boring pitch.

Your valuation is off the wall.

You've had more experience than most people have had in a lifetime.

You can't make an offer on my behalf.

Shall I go home and leave you all to it?

The multimillionaire 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 back to the Dragon's Den.

Now, imagine yourself in the role of the dragons.

What questions would you ask?

Who would you invest your money in and why?

Now, don't forget, the dragons are not imagining anything.

They're making real decisions using their own cash.

They stand to make a fortune or to lose one,

and that's why only the very best entrepreneurs who come here

can expect to secure their backing.

Hello, Dragons.

My name is Hannah Windrass.

I'm asking you for £80,000

and I'll give you 15% of the business.

I'm a nurse,

and I suffer with a terrible bad back.

Have you ever struggled to wash your face over the sink?

Or struggled, ladies,

to sit on the toilet? I have.

I was given a solution.

I didn't like it.

My husband didn't like it. I have two girls, they hated it.

They laugh at it and call it all sorts of funny names.

An idea came to me

to develop something that would be more attractive.

And it's my pleasure to welcome you to the Nebo.

Thank you very much.

A polite but passionate plea from Birmingham's Hannah Windrass.

Her invention offers some relief

to the six million who suffer from chronic back problems in the UK.

And she now needs £85,000 to launch her product.

Deborah Meaden is first to question the likeable businesswoman.

So, Hannah, has anybody else tried them or tested them?

Yes, it's tested.

-By who?

-By Rapra.

And what do they test it for?

For the strength, durability.

And how many of these are out there?

Millions. Millions of these.

One small company

produces over two million pieces each year.

And how much do those sell for?

The cost for this, 70-odd pounds.

And how much would yours be?

Mine is £82.

So is the idea that you could go back to toilets that are already fitted

and put this underneath the toilet?

-That's the beauty of it.

-That's the beauty of it.

You don't have to discard your toilet, all you need to do is just raise it. It's a plumber's job.

OK.

Can I just show you?

-Oh!

-Actually, this is a multi-kit piece.

You can just install it there. Could I sit on it just to show?

This is the best thing that ever happened to me.

Precise and composed responses from the first-time entrepreneur.

And Peter Jones looks to have something on his mind.

-Hannah.

-Yes.

-You can't see when I'm sitting down, but I'm 6ft 7.

-Yes.

So when I go to the toilet and I start to squat down,

I always feel that I'm about to sit on a flower pot.

Would you like to have a try?

I think so, yeah. I think a tall person should be on there.

-I'd like to see it.

-I'd like to see it.

-That's fantastic.

-Look at that, your knees are 90 degrees.

You got a paper?

This is, it is very comfortable, this.

I think that you've invented something that clearly solves a problem.

But, for example, you could, very simply,

create a framework with some wood around the side, put cement in it,

take the wood away when the cement dries.

It's a very good question, but you have to buy the cement,

that's money. You have to mould it, which would take days.

And once it's there, it's there forever.

I'll tell you what my problem is. I've seen both of these before.

But I've patented it, I've had my patent.

No, but I have seen it before. How long ago was it you patented it?

I filed it July 2003.

You see, I used to be in the care home market

and I sold up in 1997.

-Did you?

-We had them before 1997.

So I don't know how you could have patented it

when it was already on the market.

I have my certificate here.

Let me have a look at it.

OK. I'll let the other four Dragons ask you some questions

while I'm reading your patent.

Hannah, you've got a finished product.

How much money have you spent on this?

94,000.

-Hannah. You were a career nurse?

-Yeah.

Nurses don't get paid a lot of money.

It's my savings, pension.

Because I do believe in it, I have a passion for it.

Where did you find 94,000? Did you borrow any of it?

No, sir.

It's just my savings. I make cuts and whatever little savings I have

I put it towards it because I know.

And you put all your money into this?

Over the years, for how many years? Nearly, roughly, ten years.

Did anybody ever say to you, "Hannah, stop"?

Well everybody who spoke to me,

they encouraged me, that is an excellent idea,

and the demand is there.

But Hannah, I'm going to have to say something

-which you might not like to hear from me, because...

-No, it's OK.

Face the stark reality of life, Hannah.

Either this will work and people will buy it,

or it's not going to work and you need to get on with your life.

And there's only a few phone calls you need to make

to the people that sell this equipment,

and send them a couple of samples out, and you'll get the answer.

This is not an investable opportunity for me.

-Oh, dear.

-So I'm out.

OK, thank you.

Disbelief in the den turns into stark reality,

as Theo Paphitis offers Hannah some tough love.

Peter Jones is ready to show his hand too.

-Hannah, you're lovely.

-Thank you.

-But you know that.

-I don't know.

No, you are, you're lovely.

But I think there are other ways of raising a toilet.

I, for one, also know you can buy toilets in different, varying heights,

so I'm not convinced that that would be the perfect solution.

And if I can't see how I could make money out of it, I can't invest in something.

So, Hannah, I'm going to politely decline your offer of investment and say that I'm out.

Thank you.

Hannah. I'm going to say this because you're lovely.

I don't want you to spend too much time on this.

You've had some very, very good advice.

I hope you've heard it and take it on board.

And I really urge you,

please think very hard before you spend any more money.

-Yes.

-I'm very sorry, but I'm out.

Kind words but no cash from two more Dragons.

Can Duncan Bannatyne find anything in the patent

that will help deliver Hannah's dreams of investment?

Now, looking at your patent,

it does seem that there are other similar products.

There's one called US 5 303 430.

I'm glad you raised that topic because, when I did my research at the library

from the Chamber of Commerce,

that patent is like an old sink,

-and the other one is like a massive bath.

-OK, OK.

And nothing pertaining to a toilet.

Hannah, there are similar things on the market that people are using

and have been using for a long time.

And I think they would argue your patent.

And I'm sorry, but you need to face up to that.

You're a nice person, but I'm out.

Hannah. I'm not going to invest money in you.

But I will invest a little bit of time in you.

And with the contacts that I have,

with The Princess Trust for all carers and the Stroke Association,

I will ask around to see whether or not

it is required in their facilities.

Thank you.

If it does ease people's suffering and improve people's lives,

then it's worth a bit of my time to try and help you do that.

-Thank you so much.

-So that's what I'm prepared to do.

But, I'm afraid, as regards investment, I'm out.

Thank you.

-Patent lawyers.

-That's outrageous.

If someone puts markings for screw holes in a different place,

they'll not infringe her patent.

-£94,000.

-A lot of money.

Heartbreaking.

The den has already witnessed its fair share of helpful holiday gadgets

and time-saving travel solutions.

Next to showcase his latest innovation in this sector

was Kevin Stevens from York, accompanied by his two children.

Snowmule is basically a rucksack

designed to make skiing with children easier.

It has two main features, the first is the carrying capacity.

The second is the towing device.

They would just grab a handle each out of the bag.

I would have skis on as well.

The handle goes back into the bag, everyone skis off, everyone's happy.

Intrigued by the product demonstration,

Deborah Meaden wanted to get the measure of Kevin himself.

What's your background?

I've been in sales a lot in my life.

-Selling what?

-Oh, crikey, all sorts of things.

So how long have you been trading and what's your turnover been?

Oh, about six months, it was just 300 bags, so about £15,000.

Yeah, I've sold a few things, a bit of this, a bit of that. Yeah, yeah,

15K or something like that.

Are you just a very casual guy, or what is it?

-Well, I'm reasonably casual.

-What do you do for a living now?

-I'm an airline pilot.

-You're an airline pilot!

-Oh, please don't be casual, please!

-So I'm not casual doing that.

A good save by Kevin. He may have won the Dragons round,

but that wasn't enough to convince them to invest.

There's been rucksacks for skateboards and snowboards for years.

It's not a brand new concept to say to a skiing family,

"Would you like to take a rucksack skiing?"

What I need to do is get them to say, "I might as well buy one that does all of these extra things."

Would I buy one? Probably would.

But it's not just a general rucksack, it's a seasonal item.

-Yeah.

-And one item,

it's not a business that I can invest 90 grand in and get a return.

-OK.

-So I'm out.

Well, thank you anyway.

Some really successful companies have emerged lately,

adapting an idea that works for adults, to make it work for children.

Our next entrepreneur is Ashley Sayed,

who's hoping to pull off the same trick.

Hello. My name is Ashley

and I'm looking for £150,000 for 25% in my company, Karuma Innovations.

Based in Singapore, we have affordable, durable

and easy to use tablets for kids and parents.

Our first product is PlayBase Go,

designed to be as thin and as light as possible.

Our second product is PlayBase Plus.

It's the world's first antibacterial tablet.

Using our patented technology,

it kills 99.99% of all germs

on the screen and on the silicone covers.

I've been speaking to retailers

and distributors in Singapore, Malaysia,

the UK and the States,

and we've just achieved our first retail deal

with the largest electronics retailer in South East Asia.

I hope that you love PlayBase as much as I do,

and thank you very much for taking the time to listen to me.

Thank you.

A hi-tech opportunity for the Dragons.

Product designer, Ashley Sayed

believes he can introduce his new lines to more customers

if only he can get a £150,000 cash injection.

25% equity is on offer.

Peter Jones knows this sector well.

-Ashley.

-Yes.

Who's the retailer that's taken this in Singapore?

-It's Courts.

-OK.

We've had a lot of people that are really interested in the product.

We went to CES in January this year.

What's the total cost of this unit?

179.

And what does it cost you, delivered, landed here?

It costs us about £60.

What do you believe is unique about this product?

OK, so there are a few unique things.

As you know, a lot of kids are using

their parents' iPads and things like that,

and what I noticed was that they were dropping them,

because they're not designed for kids.

So, really, what we've done,

is we've developed a much more durable product.

And the fact that we've got our antibacterial protection as well.

-Is that on this unit?

-Correct.

We basically developed a patent

to put it into a film which goes onto the screen.

OK.

Robust responses from the Singapore-based businessman.

So what of the entrepreneur himself?

Deborah Meaden wants to know.

What's your background, Ashley?

OK, so I did a degree in product design engineering

and worked for Motorola,

developed their thinnest mobile phone in the world.

Tom-Tom, where I was Head of Design.

And after that, I had Philips chasing me for quite a while,

and they offered me a great opportunity,

managing teams of over 100 people.

And then, I've always wanted to, obviously, set up my own business,

that's when I set up in Singapore two years ago.

OK, and how much money has it cost you to get

where you are at the moment?

It cost me around about £50,000 so far.

And the money has come from just my own cash.

OK.

-Can we just talk a little bit about the patent?

-Yeah.

The antibacterial.

Which bit is actually the patentable bit?

OK, so what we've done is we've taken silver ion technology,

which is basically an agent,

and the IP is based around how we apply that to a film,

and then how we apply that film onto an electrical device.

How long has it taken you to get it and how much have you spent?

It's pending.

When did you put the application in?

About two months ago.

Very early days, that's not quite having a patent, is it?

Yeah, it's patent-pending, so I mean,

obviously, we did our checks and we know what's in the market right now.

And the process of putting on the agent onto the film

is very, very difficult.

The first sign of uncertainty from Ashley.

It looks like alarm bells are ringing for retail expert Theo Paphitis.

OK, where do I start? This market, hugely competitive.

-Yep.

-I bought one of these. Not this one.

-100 quid.

-Yeah, I mean, can I...

So price-wise,

you're way above what the market is

for generic tablets of this size.

Yep. The thing is, look, we're not going to compete on price,

because we'll always lose that war.

So what we're trying to do is understand the end user

and listen to them and feedback as much as we can into the product.

So the actual tablet itself, you say that's all your design, is it?

Yeah, we basically did the design for the covers and the external,

but the reference design for the PCB,

it comes from our contract manufacturer.

So we basically put a skin around it.

-Yeah.

-Yeah.

So the innards, basically,

are the same as you would get in any of the other tablets.

Yeah, but what you've got to understand is they're all running android.

An android has a set of buttons, as you know, right.

-Thank you.

-That's correct, yeah.

Ashley, my 150 grand

isn't going to go very far in developing these products

in what is an incredibly fast-moving market.

Yeah, but look at Steve Jobs and Wozniak, right.

They developed the Apple I, Apple II

in their garage when HP were giants.

Don't forget, if it wasn't for Microsoft, Apple wouldn't exist.

-Well, that's true, yeah.

-I mean it changes so quickly,

with so many dominant players.

Unfortunately, whilst I like the subject matter,

and I'd probably enjoy working with you,

150,000 to get into that market

is not going to do it, it's too competitive,

even with my own, personal distribution channel that I've got.

-So I'm afraid I'm out.

-OK, thanks.

Despite a confident repost, Ashley loses his first Dragon.

And it doesn't look like Duncan Bannatyne

is going to offer him any hope either.

Ashley, I have to say, I think you presented very well.

But technology and gadgets is not my strength.

So there's nothing I can really add, so for that reason

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

OK.

Ashley. You're great, you're really good.

You've got great track record.

And the bit that could've interested me was the antibacterial,

because I can see that, if you had a patent on that,

that could be very valuable.

-Very valuable.

-Yeah, that's what we believe, yeah.

-But, the trouble is,

I don't think you're going to convince me that that will go through

when you've only put your patent application in two months ago.

And, if you ask me to put my money on it,

I would probably say, I don't think you'll get that.

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

Ashley. I can't put it any more succinctly than what Deborah has.

And again, I think that we all think that you're very credible

and, obviously, very knowledgeable.

But, unfortunately, I won't be investing today.

-OK.

-So I'm out.

Ashley puts on a brave face

as three Dragons declare themselves out in quick succession.

Now, only Peter Jones can save him from complete failure in the den.

That leaves me, Ashley. You're a product guy,

but I think it's poorly designed.

I just turned that and it just ripped.

I don't think... I mean, look, I'm not pulling it hard, but that's gone.

Yeah, we have actually addressed that

by increasing the thickness of the material.

Is this a prototype?

-Well, this is a pre-production unit.

-OK.

-Yeah.

Look, I know this is not absolutely perfect,

OK, and what we've done is,

with the development of our second generation,

we've got some really cool IP that I've developed.

What's the IP you've developed?

We've figured out a way to do wireless charging.

And what we've done is figure out how to build it inside the product.

We will be able to charge two or three PlayBases at the same time.

You know, I understand all the things that you've said.

And everyone thinks I'm crazy, obviously, to go into a market

that's so competitive.

But, being based in Singapore, we can actually at least be quicker

than everybody else in developing the technology and bringing it out.

So you've come over here, all the way from Singapore, to pitch to us.

Yeah. Two days ago.

Wow.

Ashley, I think you're really employable.

And, if you were pitching...

..for a job,

I'd offer you a job.

It's an interesting one.

How would you feel if I put an offer together

on the basis of employing you directly

so, ultimately, you get what you wanted coming into the den?

Yeah, OK, I'd be interested in doing that in a deal.

-Yeah, I'll be interested.

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

OK.

I'm going to offer you £150,000,

which would be paid to you,

and you go and prove that this concept works.

Right.

And if, within that 12 months, we've got a product

that can go to market and that can make money,

I will fold your concept into one of my existing businesses.

And you would end up with, if successful,

25% ownership of that division.

Right.

But if, after 12 months, this division has not made money,

I want the right to be able to have a conversation with you

and we both go our lonely ways.

OK, we'll do a deal.

-HILARY:

-Well done.

DRAGONS APPLAUSE

-Thanks.

-Well done.

It's an extraordinary conclusion.

-How do you feel?

-Tired.

Ashley's paying a high price, but he's got the money he needs,

and the full support of Peter Jones' technology empire.

-Good deal. Very clever, Peter.

-Thank you.

The rise of e-commerce has led to many traditional industries

being overhauled and reworked into lucrative web-based ventures.

Solicitor James Mather and business partner, Lloyd Barrett,

hoped they'd launched the latest.

High street legal advice is getting more and more expensive

and legal aid is being cut.

Expert Answers aims to bridge that gap.

It's a legal questions and answer website.

The user puts the question on the site

and then they decide on how much they want to pay for the answer.

The minimum's ten, the maximum's 150.

First to raise an objection to their money-making proposal was Duncan Bannatyne.

Let's suppose I come on and I want to pay ten quid, do I get an answer?

Yes.

So why would I pay more if I can get the answer for £10?

The fact is that the public do because there's a perception of the value of their question.

So, all the products I sell online now,

I should actually put a range of prices so people might pay more?

It's not a good idea that, really.

Jokes aside, the Dragons still had further interrogation for James and Lloyd.

You believe that this is worth a million pounds?

There is one other site in the world doing exactly the same.

-And they...

-Just hang on.

-Sorry.

And they are turning over... You've got an idea of the turnover.

2.2 million, just on the UK alone.

I like the concept, but you're now competing with a monster out there.

Final verdicts in, and it was left to Deborah Meaden to close proceedings.

Actually, I think you've got this right for people who want very, very cheap advice.

I can't tell you how much I think you've got this wrong

to get a proper return on your investment.

-So I'm not investing and I'm out.

-Thank you.

So far tonight, only one entrepreneur has secured a multimillionaire investor,

creating a new deal and company, here in the den.

OK, we'll do a deal.

-Thanks.

-Well done.

For an update on how some of our previous entrepreneurs are getting on,

press the red button at the end of the programme.

Do you ever wonder where entrepreneurs get their ideas from?

Well, as often as not, it's from their own, personal experience.

And that was the case for close friends Natalie Balmond and Weze Hannam.

But what kind of experience will they endure in front of the Dragons?

Hello. My name's Natalie and this is Weze, by codirector.

We're looking for £90,000, in return for 15% of our business,

Purepotions Skincare.

Millions of people worldwide suffer from severe dry skin.

These statistics meant very little to me until my daughter, Lula,

developed a chronic dry skin condition, and I was desperate

to find a moisturiser which would not aggravate her sensitive and allergy-prone skin even further.

Finally, I took matters into my own hands

and I formulated an ointment at my kitchen sink,

which, within a matter of days, transformed Lula's life.

As a business, we have a strong foothold in the natural health market.

We have a web shop. We're in 200 health stores,

carried by three distributors, and we are available in one high street chain.

The products are listed on the NHS drugs tariff, and, in certain circumstances,

are being prescribed by GPs.

Since March last year, we've sold around 42,000 units

and we now feel ready to position ourselves as a more mainstream offering

on the high street and internationally.

We would like your help to grow this brand into a household name

and help the six million sufferers to lead a better life.

Thank you.

A product and a business born out of necessity.

Brighton-based Natalie Balmond and Weze Hannam

want to expand their moisturising cream company

and they need £90,000 from the Dragons to do it.

They're offering 15% equity in return.

Retail expert, Theo Paphitis, wants to drill straight down into the numbers.

-Natalie.

-Hello.

-I'm Theo.

-And it's Weze?

Weze, yes.

So you've got some track record, hit me with some numbers.

OK, in 2009/10 we turned over 81,000 and we made a loss of 12,000.

10-11, we turned over 148 and we made 11,000.

And this year coming to an end now, we will have turned over 450,000,

and we will have made a profit of 27,

but we've put 29,000 back into the company in marketing activities.

OK, which is the high street chain that you talk about?

We're in Holland & Barrett.

What about Boots, there's Superdrug, there's Lloyds, what about them?

Well, it would be fair to say that, so far, we've concentrated in the health food world

because, when the product began, it sort of had a natural affinity, because it's a natural product,

and we've grown the brand there, but we'd very much like to see it on the shelf in those chains.

OK, that's good. Now, I want to understand,

you mentioned in some cases this is prescribed.

-Yes.

-I assume that there's been clinical trials

to prove its benefits?

Well, actually, not so.

GPs can prescribe products that don't hold a medical licence

if they feel it's going to be beneficial to their patient.

Be careful, I want to make sure. You're making claims

and it's those claims which are the key ones.

Essentially, the reason it was developed was as a moisturiser,

and there are other products out there that are being prescribed,

and so we're seeing out there that there are models,

other companies that have done this exactly the same as us,

but don't carry medical licences.

-Without clinical trials.

-And without clinical trials, yeah.

OK, thank you.

Calm and confident assurances from the duo.

Peter Jones looks impressed.

-Hi Weze, hi Natalie. I'm Peter.

-Hi, Peter.

-Hello, Peter.

-I've got to say congratulations.

-Thank you.

-Thank you.

And how much money did you both invest at the start? I'm assuming probably nothing, but...

-Well, when I joined the business, I put in 11,500.

-Yeah.

-Five years ago.

-Five years ago.

And what's the business like now in terms of cash?

It would be fair to say that, month by month, the cash can be tight.

We're basically breaking even a lot of the time, so we need to up the volumes now.

So how much money have you got in the bank today?

-In the bank today, we've got 9,000.

-And how much money do you owe?

About 15,000.

-And have you got any loans in the business?

-Yeah, there's a 30,000 loan.

-Who's that from?

-It was a consultant that got involved with us last year.

He actually came into the business with the task

of looking for investment for us.

We don't work with him any longer. We felt that it wasn't going anywhere.

-Well, hold on, sorry. He leant you £30,000?

-Mm-hm.

So which part of the arrangement, which was for him to get investment, didn't he fulfil?

Putting us in front of investors.

I mean, we wanted to work with him because we wanted to get investment into the company

and that part of our arrangement with him hadn't come to fruition.

-What are the terms of the loan?

-We agreed that the loan would be paid back in instalments,

so we pay it back on a monthly amount.

So it's sort of kept the cash in the business.

-What's the interest rate on it?

-It's 25p a day.

OK, that has thrown me, you've got me.

That's definitely thrown me.

Do you realise what that means?

Somebody lent you £30,000 for 90 quid interest a year.

In all honesty, in lots of business relationships, people come together,

they have something that they come together over, they've got lots in common,

they work together, and then naturally people part.

We haven't had any huge fallings-out with people.

It's just unfolded in that way for us.

Natalie, Weze, when you first came up, I'm thinking,

it's a great story, you've created a real business

from a situation and circumstance.

But if I was that person that invested £90,000 for 15% of your company,

and perhaps I wasn't playing that part, in your mind, of what you thought I was there to do,

I'd feel that actually, I'm going to be having similar conversations

and you'd be saying, "Peter, look, we don't really need you in the business any more".

So that is the reason why, ladies, I'm out.

A damning analysis from Peter Jones and an early blow for Natalie and Weze.

But can Duncan Bannatyne see beyond his rival's concerns?

OK, so, how many Holland & Barrett stores is your product in?

It's in 212 at the moment.

What's the average sale per store?

Well, at the moment we're still in our trial period,

so we've got a 12-week trial that we're just coming to the end of now,

so actually we have provided them with free fill for that trial.

That was the conditions that they wanted us in under.

-You've given them the product free?

-Yes.

-In their stores?

They put half the amount in first

and they've now restocked the 212 shops because they're selling out.

So it is going really well and we're now waiting for an order to come in from them.

OK, so you must have had a deal where you got some feedback.

-Yeah.

-What volume of your product they sell?

Yeah, we were on the understanding that we would be given updates,

and the feedback that we've received so far is that they are selling the products.

-How much free fill did you give them?

-We had to give them 2,000 units.

-What's it worth to them?

-It's worth 26,000.

-26,000.

-Yeah.

-So they've got £26,000 of free stock from you.

-Yes.

-That's worrying.

Because, if you're sitting there waiting for a new order,

and you don't know what the sell rate is, you might not get an order.

Yeah. It's absolutely true.

What surprises me is that you've had to give free products,

and that neither of you had the acumen to say,

"There is 26K worth of profit to you,

"clear profit, because we're giving it you.

"Now, in exchange for that,

"we want a contract with you that says you will run a trial with your customers."

And yet you didn't think of that.

Didn't think of running a trial with the customers, no.

If you'd have gone out to a marketing company,

part of that strategy would have been that they had to report back to you

what was gleaned from that marketing strategy.

They are meant to be giving us some feedback.

But you should have had it in writing.

Yeah, we should, you're right, yeah.

We live and learn.

Let me tell you where I'm at. I think it's lovely.

It feels really nice on your skin, so well done for that.

And I can imagine it actually moisturising dry skin.

But I just think you've got so far to go, so many hurdles to jump,

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

The duo's early confidence takes a further hit

as Hilary Devey walks away from the deal.

And it looks like Theo Paphitis has made up his mind too.

Ladies, I think you've got a cream

that obviously moisturises.

But you've had a business together for over five years.

You should know it inside out.

We are lacking in experience and it's showing, and perhaps it's...

No, you've been going for years,

you've had consultants, you've had partners,

you've had more experience than most people have had in a lifetime.

I'm not going to come and run your business.

If other Dragons wish to do that, that's down to them.

But I invest, I guide and you run the business.

But, to be honest with you, I don't think I could leave you to your own devices.

I don't think it's investable for me. So, I'm afraid, I'm out.

-OK, thank you.

-OK, thank you.

I have got much respect for you and what you've done,

but I haven't heard anything to convince me

that this company's worth an investment that values the company at nearly £600,000.

I think the valuation's far too high.

It's not an investable product at the moment.

Not for me anyway. So I'm really sorry but I've got to say...I'm out.

OK.

You are very reassuring. We've accidently stumbled

across quite a few important pieces of information we should have known about.

But you see, you nod reassuringly,

and I sit here and I think, no, that's fine.

Well, actually, to be fair, I don't think it is fine at all.

I think you're right, and I can absolutely see why you'd be alarmed by it.

When I invest in a business, I have to feel comfortable.

And what worries me is, if I was working with you in the organisation,

I could see you nodding reassuringly at me

and giving me very good explanations and this, sort of, warm glow washing over me

and thinking everything's all right.

And then finding it's not.

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

-OK, thank you.

-Thanks. Bye-bye.

It was a promising start for Natalie and Weze.

But these Dragons need more than just a good product

before they invest their own cash. The duo leave with nothing.

It's a very difficult situation to get enough points across

in a sort of clear and concise way.

I think they found it difficult to decipher all the different things

that have happened, the history, the people we've worked with.

But they could tell we were doing a good thing,

and that's another reason for us to carry on.

Other entrepreneurs who tried and failed in the den

included Chris Poole and Ashley Watson from Birmingham,

who brought four year-old George

to demonstrate their musical invention.

"Twinkle, Twinkle, Little Star"

DRAGONS CHEER AND APPLAUD

When teaching the guitar, the most common problem I found

was teaching students how to read traditional music.

Our method can be applied to any musical instrument,

using the coloured strings which then correspond

with the coloured musical notes through the book.

And why are we here today, George?

For £75,000

for 10% and a bag of sweets.

George proved the perfect tactic in their pitch,

but that didn't spare Chris and Ashley's business

from the usual interrogation.

Great to see George, four years of age, clearly playing.

I have an immediate issue.

I don't know whether it's better with colours

or whether it's better to go string two, three, four or five.

If you call them one, two and three,

they get mixed up between the frets one, two and three.

So, whilst numbers proved bad for their product,

unfortunately they also proved bad for their business.

I think what you're doing is fantastic,

and I just think your valuation is off the wall.

It's good, but 75 grand is too big a number.

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

-Thank you very much, thank you.

Next into the den was Jamie O'Connor from Halifax.

She needed £60,000 for her nifty oven gadget.

During cooking, splashes of fat stick onto the inside of the oven door.

To overcome this problem,

simply replace the oven door shield with a suction fixing.

Single product businesses have a tough mountain to climb to gain investment.

So how did Jamie fare?

I do think it's an inventive product

but I think it's a very, very tiny considered market.

But I've got quite a lot of interest.

We're ready to deliver into Currys,

Comet, Betterware, all different avenues.

There's three major retailers talking five million in the States.

There's so many roads I can go down.

Impressive revelations from the mother of two,

which led to some high praise in the den.

You've done remarkably well

and I hope you go on to make it a huge, huge success.

You've developed something, you've taken it to market,

you've sold it, you've got interest from abroad.

You know what, there's times when we don't invest

and we really do wish to see someone become incredibly successful,

and you're one of them. So I'm sorry, I'm out.

Thanks.

Our next entrepreneurs live together, they share a pastime together,

and they've built a business out of it together.

Husband and wife team, Anne and Keith Proctor.

They are next to face the Dragons.

Hello. My name's Anne Proctor,

I'm the managing director of Protec Covers,

and I'm here to ask today for £75,000

for 10% of the company.

This is Keith Proctor, he's my fellow director,

he has got many skills within the company,

the main one being, he makes good coffee.

Oh, thank you. I do actually make good coffee.

But we also make very good covers.

If you've just spent £15,000 on a caravan,

or even triple that on a motor home,

you don't want to sit there watching it depreciate in the weather

and all the things that the elements can throw at it.

So our covers will protect it from all that.

The fabric is a trilaminate.

It's got a patented breather membrane

and, basically, this demonstration will show.

This is a hollow tube and the fabric is in the middle.

-The water is staying on top of the fabric, it's not going through

-.

But if we put air...

The air will travel through the fabric

and the water won't go the other way.

So it will keep all the water on top of the caravan cover

and keep the inside nice and dry.

The other thing that our covers have is the Easy Fit system.

You can lift this off and go forward with it, and then lift it back on.

And that's what Protec Covers have got, so we're open to any questions.

A rather subdued pitch from husband and wife team,

Anne and Keith Proctor.

They need £75,000

to take their protective cover business to a wider market.

On offer is a 10% stake.

But is that enough to excite Peter Jones?

-Keith, Anne, I'm Peter. Hello.

-Hi, Peter.

-Hello.

I'm seeing a cover with a pole and thinking, you've got to be kidding me.

And it's just a boring pitch.

-We're from Yorkshire, so it's...

-Does that make a difference?

Well, we don't get excited over stuff, do we?

-You definitely don't.

-Yeah.

OK, so how long have you been going in business, selling these?

-12 years.

-12 years?

-Yeah.

Give me last year's financials.

Right, the turnover was 885,000,

gross profit was 220,

and the net profit was 86.

What are you going to do over the next 12 months?

Next year, with investment, we'd be looking at 1.65 million.

The net profit would be 164,000.

I look a bit stupid now, I take it back.

-You've sold nearly a million pounds' worth of covers of these?

-Yeah.

I am absolutely staggered that you have been able to make

that much money out of a tarpaulin cover and pole.

Please don't call it a tarpaulin, it's a lovely fabric.

-It's a lovely fabric cover then, and a pole.

-Yeah.

A Dragon floored by the entrepreneurs' success.

A rare moment in the den.

Now, Theo Paphitis wants to dig deeper into the detail

of this thriving, Bradford-based company.

What is it that £75,000

is going to affect your business

so dramatically that it's going to double its turnover?

At the moment, we can only fulfil so many orders due to production,

to the machinery and the capabilities that we've got.

We've been looking at new machinery so that we can therefore increase production.

Well, how much is that machinery going to cost?

It's £15,000 per machine.

-THEO:

-OK, but Anne, you've just told Peter you've got cash in the business.

Yeah. The reason the money stays in the bank

is because the covers are a winter product.

So when we come into February or March,

we've got nothing to go through the summer.

-I see, so it's cash flow?

-So it's cash flow.

-OK.

-DEBORAH:

-So how does that relate to the numbers?

Once you've invested this money, what's your capacity?

We can produce now up to 70 covers a week

at the peak times.

So when you've actually spent this money,

how many will you be able to do a week?

We'd be able to do 100 a week comfortably.

So what's at the moment your limiting factor?

Are you taking as many orders as you can?

No. Basically, we know that we're doing well

year-on-year in the UK market.

But we know that there's a big market in Europe.

To give you an idea, at any one time in the UK,

there's over a million caravans and motor homes.

In Europe, it's vastly superior.

And so we want to get into Europe.

An untapped market will often be pound signs in the eyes of an investor.

But something looks to be troubling Hilary Devey.

What's the shareholding of the business currently?

-It's two to one to me.

-Sorry?

It's two to one. I only found out recently.

Anne has two shares, I have one share.

It was just how it was set up originally.

-So have you got children?

-Yes, we've got four children between us.

And do they want to go into the business?

My daughter already works for us.

My son, he does the web accessory shop.

What's your exit strategy, is it to bring the family into the business?

Yes, to bring the family into the business.

And to step back and do shows and still be involved that way.

-So why do you want an investor?

-To secure the company.

-But an investor is going to look for an exit strategy.

-Yeah.

-Yes.

And when there's family involved,

it's very difficult to find your way through an exit strategy.

Yeah, I think with an investor, the business would grow quicker,

rather than at a steady pace.

Basically, Anne's a sewing machinist

and sewing machinist trainer,

and I'm an old sewing machine mechanic,

and so we've no great business knowledge.

Yeah, but Keith, an investor could come in,

-help to grow it quicker.

-Yep.

But how does an investor capitalise on it?

What's his exit strategy?

For example, if I invested 75,000 for 10%,

and the company's valued at 750,000.

And, in two months' time, we get an offer for double that,

-and I say, let's sell.

-Yeah.

-Would you consider that a sensible proposal?

-Oh, yeah.

-Would you?

-Oh, aye.

-So you could you sell out?

-Yeah.

I think from mine and Keith's point of view,

that there's all sorts of other things that we want to do as well.

The couple reveal a shrewd and ambitious streak

with their pragmatic approach to the future of their business.

And Deborah Meaden knows this market very well.

I think you're doing a good job.

I think you're right to look to Europe.

But the bit that concerned me most

was actually investing in a family business as a minority shareholder.

Because it does make it very, very difficult,

if you have a very like-minded family

who are believing very strongly one thing,

and you can see as clear as a bell,

through lots of experience, another thing,

-believe me, that doesn't always work.

-Yep.

But I actually think your best route

is to carry on doing what you're doing,

have your plan to actually pass it on to your children,

just grow this business. And, with what you've done already,

I'll bet it won't take you long to crack the European market.

But I won't be investing, so I'm out.

The industry expert delivers a first blow for Anne and Keith.

Has Peter Jones heard enough

to change his mind about the proposition on offer?

Keith, Anne, what you've done is quite incredible.

But if I was to invest, I would probably struggle,

in terms of level of excitement,

and I would struggle even further with the level of excitement

that you and I might exude working together.

-And I'm being quite horrible and blunt.

-No, it's fine.

I always think it's best to be open. Absolutely.

It's lovely to have met you but, unfortunately, I'm not going to invest.

-I'm out.

-OK.

-Thank you.

OK. What's been absolutely clear

is that you've got a good business.

-But my pound is worth more.

-Absolutely.

But it's worth more because of my experience, knowledge, contacts.

Now, if I invest that pound in an area where I have no relevance,

-it's worth exactly the same as everyone else's pound.

-Yeah.

I can't see a role for myself that's going to enhance your business.

So I'm afraid I'm going to wish you the best of luck,

-and say that I'm out.

-All right. Thank you.

-Thank you.

-DUNCAN:

-That was a good description of why Theo's pound is worth more.

Is mine worth more?

Yes, because you're involved in the leisure industry,

and covers are not only confined to caravan covers.

It's a main product, but we just got an order for covers

for the London Eye X-ray machines. It's not just caravan covers.

OK. I just want to go back over something, something you said.

You're making 86,000 net, in the last year.

-Was that after you took wages?

-Oh, yeah.

-You both took wages?

-Yeah.

-What salary did you take?

We took 25,000 each.

OK.

I'm going to make you an offer.

I'm going to offer you half the money, which is 37,500, as we all know.

But I want...

I want...

..16% of the company.

At last, the low-key husband and wife team get an offer.

But for only half the cash they need.

Strict den rules state they must receive the full amount,

or they leave with nothing. And only Hilary Devey remains.

Are you prepared to separate your children from the business?

-Yeah.

-Because I think they're two separate entities

and you should keep them apart.

Business is business and family is family.

I mean, we have had this discussion.

Whatever we want to do with the company, then that's fine.

DUNCAN: So are you going to make an offer, Hilary?

For all of it or half of it?

-HILARY:

-I think I could help you get this into Europe.

And it does excite me.

I know they'll think I'm crazy.

So I will match that offer.

What?

No?

No. We don't even have to go to the back of the room and discuss that.

-So what is the maximum you'll go to on percentage?

-20.

20%?

Would you go for 26%?

-But between you or each?

-All the money for 26%.

-Yeah, did you make an offer?

-26%.

-For you?

-For you and I.

You can't make an offer on my behalf. Should I go home and leave you all to it?

OK, I'll tell you what.

I think Hilary and I are offering you all the money for 26%.

-Is that right, Hilary?

-Yeah.

-Are you happy with that?

-Yes.

-You will.

-Yeah.

-You will? We will.

-Thank you, we accept.

-We accept.

DUNCAN AND HILARY: Wey!

-PETER:

-Well done.

-Anne and Keith have done it.

-Well done.

-Well done.

-I look forward to working with you.

-And you, as well.

It was a somewhat comical conclusion to a serious business decision,

but they're now in business with two powerful multimillionaire partners.

That was one of those cases where the numbers did the talking.

Peter Jones may have had an obvious lack of excitement at the product,

but all the Dragons agreed

that Keith and Anne's profits were far from dull.

Having set their sights on European expansion,

now all they have to do is demonstrate their UK success

can go the distance.

For more insight from Hilary Devey and Duncan Bannatyne

on why they chose to invest in Anne and Keith's business,

and how they see it progressing,

press the red button now. Good bye.

Next week, in the den.

SHOUTING

I've opened a bit of a can of worms there I wasn't expecting to open.

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

CLUNKING

I would not have signed that.

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

It's a bit like buying the emperor's new clothes.

I'm not happy with this. Let's crush them like worms.

Subtitles by Red Bee Media Ltd