Episode 1 Dragons' Den

These are the Dragons.

Wealthy, well-connected,

innovative and influential.

Over the next six weeks,

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

The opportunity in terms of investment

is about as attractive as eating a rotten egg.

There's no money to be made in that, because it's too expensive.

5% just doesn't excite me.

We have a motto in our company.

When an elephant sits down, get out of the way.

He should come back. He'll kick himself if he doesn't finish this.

He'll come back.

Leisure and marketing expert Deborah Meaden...

..telecoms giant Peter Jones...

..and hotel and health club owner Duncan Bannatyne

have between them struck deals worth more than £7 million in the Den.

But ready to fight for the next shrewd investment is the creator

of her own world-renowned interior design brand, Kelly Hoppen...

..and cloud computing pioneer Piers Linney.

The multimillionaires will give each entrepreneur just three minutes

to pitch their idea and then interrogate them

on every aspect of their business.

To face them takes nerve and vision,

so who will leave with the Dragons' money?

Welcome to the Dragons' Den, open for business for another year.

Quite a bit has changed.

We have new Dragons, new dangers for entrepreneurs,

but the quest remains the same.

Our illustrious panel are in a search to discover

and invest in the next big thing.

First to face the Dragons are two expat entrepreneurs,

Louise Ferguson and Kate Cotton.

Their fake tanning lotion's already flying off the shelves

in Australia, so they want to bring the product to Britain.

# Skinny Tan, Skinny Tan Who wants a Skinny Tan?

# I want a Skinny Tan!

# Who wants a Skinny Tan? You want a Skinny Tan

# I want a Skinny Tan? You want a Skinny Tan

# Who wants a Skinny Tan? You want a Skinny Tan

# Skinny Tan, Skinny Tan! #

Hello, Dragons. My name's Kate Cotton.

And my name's Louise Ferguson, and we are two of the owners

of Australia's best-selling new tanning brand, Skinny Tan.

Skinny Tan combines an eco-certified natural tanning active

with naturally derived cellulite-smoothing and body-firming

and contouring actives in the same cream.

We believe it's this dual effect

that makes us immediately stand out from the competition.

We've spent six months formulating the product to be far superior

to anything else on the market.

So with such a superior product, we knew it was going to be a success,

but had no idea just how quickly that was going to happen.

We registered our company in February last year.

In March, we were already accepted

by Australia's biggest pharmacy retailer.

We launched with our first advertisement on September 9th.

Six months on from that launch,

and we've turned over 920,000 Australian dollars.

We believe with a Dragon investment,

we can replicate and hopefully better our Australian success in the UK.

Thank you for hearing us today, and we welcome any questions.

It's a high-impact pitch from Louise and Kate,

who want £60,000 in return for a 5% stake in their business.

The girl in the middle looked a little bit like a Lucozade lozenge.

-Did she?!

-Lucozade lozenge!

-Looked a bit orange to me, rather than tanned.

-She looked gorgeous.

She looked gorgeous, obviously, but she already had a bit of a tan.

The other two were completely pale, so we had more of a blank canvas.

-There's definitely no orange in this product.

-OK.

And are you Australian? You have a bit of a Sheila ting to you.

We're both English, but we've lived in Australia for ten years.

-Hello. I'm Piers.

-Hi, Piers.

-How did you come up with this idea?

I've always used tanning products.

I didn't really like them for different reasons,

and also, using cellulite creams,

but using the two products together can interfere, you know?

So we were pondering the idea of a tanning product one day,

and I said, "Look, let's just put the two together,

"do something a little bit unique."

I tell you what, if my abs looked anything like that,

I'd be buying a container-load of this stuff.

But your clever edge is, it's a self-tanning product,

but what you're throwing into the mix is it does other stuff.

We've only been on the shelves since September,

we're a very new product, but so far,

we're really, really pleased with how well it's gone.

A confident start from the brains behind Skinny Tan.

Peter Jones is keen to find out more

about Louise and Kate's Australian success.

-You said you'd generated income of 920,000 Australian dollars.

-Yes.

Could you convert that back to pounds for me?

You just take a third off, so it'd be just over £600,000.

-OK, £600,000 worth of sales.

-Yes.

-How much profit?

-The gross profit on that is probably close to £450,000.

-Wow.

No wonder you've got smiles on your faces!

Confident entrepreneurs who arrive in the Den

with impressive sales figures always go down well.

But Kelly Hoppen wants to get

to the bottom of Louise and Kate's cellulite-busting claims.

I do use self-tan, being as pale as I am.

You said that a tan makes you look skinnier, which it does,

makes you look better, for sure, but cellulite,

it's not really proven that any cream removes cellulite.

-It's exercise and it's good nutrition.

-Of course. Sure.

But there are clinical studies on caffeine

for helping reduce cellulite.

-I know, but...

-Published. I mean, there are.

We're not trying to introduce something new

to the cellulite market.

I think it's clever, but for me, it would be more true, I think,

to say it's Skinny Tan,

because you're tanned and therefore you look better with a tan.

Yeah, well...

I'm not sure that there's room for another tanning product,

unless you're really going to pump a huge amount of money.

Concerns about the amount of cash needed to crack the UK market

have unnerved the Dragons.

Deborah Meaden wants to establish

whether a brand that's big down under

would necessarily sell here.

Business is littered with the graveyards of people who thought,

"Fantastic, I've got the model. Now we just pick that up

"and take it over there," and they haven't managed to do it.

What do you know about this market?

We've looked at the consumer and found they're similar

and, in fact, in the UK, tanning is bigger than in Australia.

If you've got a brand there, why not focus there, build the brand there,

-make a huge amount of cash and then come here?

-This is our home.

We're just, bang, bang, first to market opportunity.

If you're ever going to launch a tanner that you think you can market

and know would be a success, now is definitely the time to do it.

Louise and Kate have made a powerful case for expansion.

But Peter Jones remains concerned by the high level of risk

involved in launching a brand-new tanning product

into an already crowded UK market.

If you get the investment today and it doesn't work for whatever reason,

-that is all the money gone. That's 60,000 gone.

-No.

-Why?

-Because you're investing for a 5% equity share in our whole business...

-That's my question.

So I would still get, still own part of the Australian business?

Which means we could pay your £60,000 back on that

projected forecast on that business alone, so it's very secure.

It's risk-free, in fact.

The expat entrepreneurs' dramatic revelation that the equity offered

will be in their already-profitable Australian business

has whetted the Dragons' appetite for the deal.

Peter Jones is first to show his hand.

I'm going to make you an offer.

I'm going to offer you all the £60,000,

but I'd like 20% of your business.

And the reason why I've asked for 20% is,

if I do crack for you the main retailers, then it could be big.

And if it's big, then I will have helped you create that.

OK. Thank you.

-Are you accepting?

-What?

-KELLY: Hold on a minute.

-DEBORAH:

-No!

I'm going to make you an offer.

Um...I'm going to offer you all of the money, but because of your

success already in Australia, I'm going to want 15% of the business.

OK. Thank you.

You're undercutting Peter, Deborah?

I'm making the offer that I think is a fair offer.

With two offers now on the table,

will Duncan Bannatyne be prepared to strike a deal?

5% just doesn't excite me. I need to be excited.

How about if we keep the 5% in the business, then,

because we've also registered in the UK, the 20% that you want,

you can have in the UK market, to give you the drive to be...

So you would offer a higher than 5% in the UK company?

-Which would be a subsidiary of the Australian company?

-Yes.

I'll make you an offer for all the money

for 10% of the Australian company

-and 25% of the new British company.

-OK. Thank you.

The three established Dragons have all made Louise and Kate an offer,

leaving the two newcomers to the Den

with an opportunity to stake their claims.

I'll make you an offer as well.

The full 60K for 10% of the whole thing.

-Thank you.

-OK. Thank you.

It's a highly competitive offer from Piers Linney.

Will Kelly Hoppen be prepared to match it?

I've built a global brand, so I have contacts all over the world.

-Yeah.

-I think I would be quite a good person to show the tan,

and I think I could really help build this business for you.

-I will make you the same offer as Piers, £60,000 for 10%.

-OK.

Thank you.

I'll make you another offer.

I think Kelly would bring a lot to the table.

I can bring the modelling, with a bit of work!

And what Kelly can bring, and this is very important,

she can bring contacts, endorsements.

So if Kelly wanted to, I'd be happy to go into it with Kelly.

I would be happy with that, Piers.

-So it's still 10%, and you're sharing it together?

-We'll split it.

It's a surprising twist.

The two new Dragons have joined forces

to beat the old guard to the deal.

But Deborah Meaden isn't ready to concede defeat.

I'm going to confuse you now, because,

with all the discussions about splitting the company,

that's happened since I made my first offer, so again I would still

want 10% of the Australian market, and I want 20% of the UK market.

-OK?

-OK.

With competition for the deal reaching fever pitch,

could Peter Jones's retail contacts give him a valuable edge?

I've got businesses that sell over £100 million of UK sterling

of product into the retailers you want to deal with.

I think by having me part of the business and having me in the UK,

the amount of money you're currently making would be insignificant.

If you believe in that, you must believe in fairy tales.

-Any of us could do the same thing.

-I don't agree!

You can't, because you haven't done it.

Louise and Kate's assured performance

has raised temperatures in the Den.

Now there's a crucial decision to be made.

This is really, really difficult.

Can we phone a friend and ask our advocate,

-who's also a shareholder, to cast a vote?

-Yeah, of course.

-Thank you.

-Hello.

-Hi.

To me, what I really want to do is partner with somebody who's

got the strongest relationships with the key retailers.

I think you're missing the point. I think we can sort that out.

I mean, we're all well connected people, but actually what this

needs is the PR. The marketing pull is going to make this work.

I have such a brilliant relationship with all the magazines

and all the press. I also have a huge celebrity client list.

At the same time, I can ring up Boots,

I can ring up any big department store.

As a woman, I always have a gut feeling about what I want to do.

I think it's a great product.

But I'm also aware of the fact that I'm a new Dragon,

Piers is a new Dragon, so we're fighting our corner here, you know.

We can debate until we're blue in the face,

but this is your business, you really need to make your minds up.

-Absolutely.

-Sorry.

-We do appreciate that.

-Do you want to go to the back of the room?

-OK.

Have Piers Linney and Kelly Hoppen done enough

to swing negotiations in their favour?

Or will one of the more established Dragons prevail?

This is intense!

We've made our decision.

Thank you very much to all of you,

but we're going to go with Piers and Kelly.

Yes!

-Thank you so much, guys.

-Congratulations.

-Good luck.

Thanks ever so much, everybody.

Success for Louise and Kate...

..with £60,000 from two Dragon investors,

making their 20,000-mile round trip worthwhile.

-It's life-changing!

-It's totally life-changing.

In the last five minutes,

our lives have probably just completely changed,

and it's not just about getting a UK market and money, it's about...

I don't know, this is just going to be such an incredible journey

with those guys. I can't even... It's overwhelming.

-It's a surreal moment.

-It is!

-It is!

It's not just the entrepreneurs

that can find the Den a surreal experience.

What are the tingly feelings?

-Just be quiet.

-What's so funny?

Sometimes it's the Dragons that need to pinch themselves.

Clare Lower came in seeking £125,000 for her luxury mobile picnic hamper.

But would her product for the super-rich prove too bizarre

an investment even for the well-heeled Dragons?

I love wheels. Anything you can drag - perfect.

There's just one fundamental flaw.

There's hardly any room to put food in.

If it's accompanying a shooting party, people put a game curry

in the bottom here and a celeriac mash and a braised cabbage here.

If they've got a bothy, they can set up a picnic after people have

come back from their winter walk,

and they can have an intimate picnic a deux.

Sorry. Clare, what's a bothy?

This is like listening to a pitch in a different language.

I need to get out more.

At the moment, where has been your biggest market?

The Kuwait royal family bought 50.

Why would you have a heavy picnic golf trolley in the desert?

They don't even have to carry their hamper, they have staff that do that.

The weight is certainly not an issue for them.

Did I mention the royal family bought two?

You can tell it's not my cup of tea. I'm not going to invest.

I'm going to say I'm out.

The Dragons all agreed that its lack of mass-market appeal made

Clare's mobile picnic hamper an unappetising investment.

Thanks for the opportunity to lose all my money, Clare, but I'm out.

-Are you sure?

-Well, I'd love a picnic with you some time.

And it was left to Kelly Hoppen to dish up some words of advice.

Get a PR company, get yourself into Tatler, The Hill, Portrait magazine.

The best thing that you could do

is to exhibit in Maison et Objet in Paris,

do an amazing space. You want to create theatre.

And you will start to make money, but you should do it on your own.

Thank you for your feedback.

Next in to the Den are entrepreneurial husband and wife team, Rachel and Alta Fogel.

The pair are hoping to secure investment

in their new children's construction toy.

With a current value of almost £3 billion,

the UK toy market is undoubtedly rich in opportunity.

But competition is fierce

and any investment could be fraught with risk.

Will the Dragons be prepared to take a chance on Rachel and Alta?

-Hello, I'm Rachel Fogel...

-I am Alta Fogel.

-..of Bizzy Bitz.

Bizzy Bitz is a patented new construction toy with

potential to become a world leader in the construction toy market.

We've been selling locally to get some market feedback on the toy

and a while back we got a telephone call.

SHE MAKES A PHONE RINGING NOISE

Hello, Bizzy Bitz, can I help you?

"Yes, I've just bought the Bizzy Bitz

"and I'm afraid I think you're missing a warning on the box."

If you look carefully enough,

you'll see that all appropriate toy testing has been done and it's safe.

"Warning's still missing - addictive."

Our toy is exceptionally enjoyable and fun to play with.

Bizzy Bitz - guaranteed to keep the children busy.

It's a playful pitch from Rachel and Alta, who are looking

for £80,000 in return for a 10% stake in their company.

Deborah Meaden wants to find out more about how Bizzy Bitz was born.

It looks really colourful, it looks fantastic, actually.

You've invented them?

On our patent, we're both written as the inventors,

but Alta actually worked out the system.

OK. I say this slightly tongue-in-cheek -

who's your biggest competitor?

Lego is the biggest construction toy on the market -

way above anything else.

I would say they probably... I don't know,

about 75% of all construction toys is Lego.

At least 75%.

Second biggest toy company in the world now.

Oh, are they? Right.

So, where is the space in this market that's so heavily

and incredibly dominated by Lego?

It's the only toy that you've got

so many shapes that you can put together in so many different ways.

I would say that if you've got 15 pieces of Lego,

you are very limited to what you can create with it.

If you've got 15 pieces of Bizzy Bitz, there are probably

quite a few recognisable models that you could make with it.

I'll tell you that a person like this was made by a three-year-old,

the first time she had the toy.

-Peter's tried.

-I've made myself.

It looks like me.

Head's too small.

It's not easy to come up with something that hasn't been done before.

And I think you've put a lot of hard work into this.

And I do like it.

Bizzy Bitz certainly seems to have brought out Peter Jones's inner child.

Over 20 years spent working with children, as well as the

small matter of having 12 of their own, has given Rachel and Alta

an intuitive grasp of their potential customers.

But Deborah Meaden wanted to bring the conversation

back around to business.

-How much does a box sell for?

-I sell this particular box for £25.

This cost me to produce £8.

If I sell it wholesale, I sell it for £14.

How much of this have you got in stock?

I have in stock roughly about 1,000 boxes.

And how many have you sold?

-Totally, from the day you started.

-Most probably about 700.

What I don't understand is why you haven't sold more?

If you've got a product that you know is fantastic,

if you've got 1,000 boxes,

why you wouldn't actually go out and sell them?

Well, we have sold about 700 pieces.

Only locally, because we wanted to get as much

feedback as possible, before we go on a larger scale.

I mean, if the market feedback comes back, what can it say?

It can either say, "Fantastic, sell it all over the country,"

or, "It's rubbish."

What... Where's the benefit in the feedback?

We send it out to a lot of people or potential buyers and we ask them,

"Tell me, what do you think of the product?"

-Yeah.

-And they wrote us back, "We think it is a great product,"

and this is how far we went. We didn't... I didn't go further to...

Why don't you say, "We've got it now, it's patented, how many do you want?"

Cos I wanted to come up with a bit of a bigger range.

Why?

Because we've seen from feedback that that's what will do better for us.

Duncan Bannatyne's irritated by Rachel and Alta's

reluctance to bring their product to market in its current form.

And given their lack of sales,

fellow Dragon Kelly Hoppen wants to know just how much

of a financial sacrifice they've had to make to keep the business afloat.

-How much money have you actually invested in this?

-About £130,000.

Wow.

-My goodness.

-That is a lot of money.

I would go and set up a stall in a market down Columbia Road or

do something like that.

You've got something big there.

I can see any child going into a nursery or playroom

and sitting down and wanting to play that. It looks great.

The problem is it's not selling.

It's not a viable proposition for me to invest, so I'm out,

but good luck with it.

Rachel and Alta have lost their first Dragon.

Will Peter Jones be prepared to offer them a financial lifeline?

I like what I've seen and I think that you've got something,

but I don't think the money that you're asking for is enough.

I actually think, potentially, you might find somebody

that is willing not just to put in 80,000, but is willing

to reinvest, because I think that's what's going to be needed

in seeing this come to market.

And that's the only reason why I'm not going to invest and I'm out.

Plenty of praise for Rachel and Alta's product,

but so far no offers of investment.

Now, it's time for Piers Linney to have his say.

We have a motto in our company -

"When an elephant sits down, get out of the way."

Now, you've already got one that's been sitting down on your market for quite a long time.

If you go up against the big boys,

you're going to struggle with the kind of money you are talking about.

It's not something I could invest in.

I'm out.

I fully disagree with Kelly and Peter Jones -

I'm the truthful Dragon.

And I'm going to tell you the truth.

I wrote down one word when I opened it and started using it.

The word I wrote down was - "rubbish".

And you should stop spending your money on it.

You've spent too much on it and you're going to end up with nothing.

-I'm out.

-Fine.

I disagree with Duncan, I don't think it's rubbish at all.

In fact, I think it's very clever.

I urge you - spend no more money, make no more changes and

go and sell the remaining stock you have.

I see no upside and I see a lot of risk in you being

so committed to making this work that you're not thinking straight.

I can only offer you advice and I can't offer you my money today.

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

And I'm out.

BOTH: Thank you.

Despite enthusiasm for their product, Rachel and Alta's

shortage of sales and the cut-throat nature of the market in which

they've chosen to compete, mean they walk away from the Den with nothing,

leaving the Dragons to continue heatedly debating

the merits of Bizzy Bitz.

The "Truth Dragon" called it rubbish.

It's two bits of plastic like that with this little connector on here

and you can't really find anything to connect it to.

It's complete and utter rubbish.

You've got to have something in here to be able to play it - that's your issue.

So far tonight, only one set of entrepreneurs

has triumphed in the Den.

We've made our decision and we're going to go with Piers and Kelly.

Yes!

PIERS CHUCKLES

Will any of these enterprising individuals be able to part

the Dragons from their hard-earned cash?

Maths wasn't my strong point at school.

I'm starting to realise that.

From burgers to burritos, sandwiches to sushi,

not to mention myriad versions of perfect fried chicken,

there's a staggering choice of fast-food dining options

on our high streets.

So, question. Could there possibly be a gap

in what appears to be an oversaturated market?

Our next entrepreneurs believe they've found one.

Good afternoon, Dragons.

My name's Tayub Mushtaq, I'm the managing director of World Gourmet Restaurants Ltd -

owners and operators of the brand, Wrap It Up.

I'm here today seeking an investment of £500,000 for an exchange

of 11% equity in our business.

My name is Afnan Bashir and I am a co-founder of Wrap It Up.

Back in 2003, when I was living in Chicago, I began to notice

this emerging trend in the eating out sector called fast-casual,

which basically sits in-between fast food and casual dining.

Our research suggested that a lot of the authentic street food

from around the world is served in a wrap form.

Hence, we created a brand based on world gourmet wraps.

The current UK sandwich market is worth over £6 billion -

of which wraps account for around 4%.

This is around £250 million per year and growing year-on-year.

What a market. What an opportunity.

-Shall we come and look at your wraps now, then?

-Please.

Why don't you come around here?

A composed pitch from Tayub and Afnan,

who are seeking the hefty half-million investment that could

transform their handful of high-end takeaways into a household name.

It's hot!

It's going to take something special for the Dragons

to buy into Wrap It Up at the company's current valuation.

Deborah Meaden is the first to question the fast food entrepreneurs.

I've been spending quite some time sitting with a food industry expert

who we were only last week talking about wraps being

the next big thing.

This is a space that's open and it's up for grabs.

The question is -

why is it going to be you that's going to win this space?

When I created the brand, we wanted to create, recreate,

authentic street food from around the world -

that's where the idea came from.

So, street food's all about good quality,

it's all about preparing it in front of the customer.

It's all about drama and theatre. Everybody else will serve wraps.

But they won't serve it in that way.

It's a positive start with the entrepreneurs displaying

a real passion for their business.

But Piers Linney seems to have something on his mind.

I eat this stuff all the time.

Within 20 metres of my desk, there must be 12 to 13 businesses

selling this kind of food or a variation on the theme.

You've mixed together this world food,

whereas everybody else does seem to pigeonhole themselves

in Caribbean or Mexican, whatever it might be.

That's the whole idea of Wrap It Up.

You can come into our stores

and choose a wrap from nearly every continent in the world.

You tell me where else you go and you'll find a roti sat next to

a burrito sat next to an Indian tandoori tikka.

Could Tayub and Afnan have spotted a lucrative niche in the

highly-competitive takeaway market?

Duncan Bannatyne is eager to find out more about

Wrap It Up's financial performance.

-How much money did it turn over in 2010?

-£680,000.

-And what profit did it make?

-Net profit of £47,000.

-2011?

-What is your turn over and net profit?

-£980,000 with a net profit of £110,000.

2012?

Turnover of 1.3 million with a net profit of £180,000.

Our projected turn over for this year is 1.8 million with a

net profit of £250,000.

A solid set of numbers, confidently delivered.

But it's left the Dragons confused about why Tayub

and Afnan are asking for an investment at all.

So, now, if you're making £250,000 a year,

why do you need to raise any money, let alone £500,000?

We have one central kitchen which is absolutely at maximum capacity,

there is no way we can service any further stores without

expanding our central kitchen facility.

Isn't this a debt deal?

I mean, I know the banks aren't quite as friendly as they used to be...

But this is a typical debt situation for expansion.

Though I'm here for the money, I'm more after your expertise

in taking this business globally.

I see Wrap It Up as something that can sit alongside the big brands.

Tayub certainly has no shortage of ambition and Peter Jones

appears impressed by the detailed grasp he has of his business.

Tayub, you present really well.

You clearly know your numbers, which is refreshing, actually.

When you spend 100 hours in the business every week,

week in, week out, you know what you're paying for. That's the reason why this business...

-And if you tell me you're 23 now, then...

-Sorry?

-How old are you?

-I'm 30 years of age.

-30, yeah.

I can tell you're working hard, because you look older than that.

It's made you ill, hasn't it?

I literally lost my hair, I had alopecia for two years.

But since I've had my first child, I've taken a step back

and I've thought, "You know what? It's not just about work and business."

It's about family, it's about making sure that family comes first and,

you know, I've taken time out.

-But you're still working 100 hours a week?

-No, no.

Since October 2012, I've had a management team put in place

and I've literally allowed myself to take the business forward

as opposed to being involved in the nitty-gritty.

By delegating the day-to-day management of the business,

Tayub has allayed the Dragons' anxieties about his health.

However, design guru Kelly Hoppen is concerned by Wrap It Up's

lack of visual appeal.

When you go to Thailand, you go to Mexico, it's all very beautiful,

very colourful.

This to me just looks like I'm driving along on the motorway

-and it's a fast food.

-So, like the brand image?

-The brand image.

To some extent, I completely agree.

And to add to that point, let me tell you, over the last three years,

I've spent not a penny in marketing, branding...

Part of those funds, if they are invested,

will be used towards improving our brand image.

But I thought it was for kitchens?

The £500,000 would be split around 250k for our central kitchen

and an allocation of 30 to 40k to get some branding agencies

in to come and revitalise and reignite the brand.

You're in the throes of growing a business.

Perhaps you can fix the branding, the name's not too bad.

I think the valuation though is bonkers.

Despite Tayub's obvious entrepreneurial zeal,

the mood in the Den has taken a darker turn.

Duncan Bannatyne is also concerned by the

high valuation the duo have attached to their business.

My head isn't calculating a value in this business of...

It's 500,000 for 11%.

We've taken that based on a multiple of 1.7 on our sales

and added a premium in there for the fact that we are a growing business.

Literally, we've scratched the surface, so we feel that if I was to

sell this business today,

I'm quite confident that I could achieve £4 million.

I would value the company maybe as three,

maybe as four times profit, so that's 600, 800,000.

And you're asking for £500,000 for 11%.

-You're taking a multiple of three times?

-Yeah, that's the price.

And this doesn't give me a good enough return to value

the whole thing at enough to invest £500,000.

-And for that reason, I'm out.

-OK. No problem.

With one Dragon already having walked away from the deal,

will Deborah Meaden and Piers Linney

also be deterred by Wrap It Up's £4 million price tag?

A business would have to have something that absolutely

the only way of me to enter that market was via that business

for me to pay the kind of multiples that you're asking for.

You've got a business that I could go out tomorrow,

put a team together and do.

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

I'm not afraid of buying companies with five times revenue,

to be quite frank. The reason you'll do that is about growth, isn't it?

-It's growth.

-If you're going from 1.8 to 5 to 10 to 20 to 30 to 50 million of revenue,

that's when you're valued at five times revenue,

so, on that basis, it's not for me, I'm out.

Thank you.

Three Dragons have now bowed out and Tayub and Afnan's chances of securing

an investment rests with Kelly Hoppen and Peter Jones.

Something needs to wow me, you know,

that's the first thing, the smell and then the sight and then it's talking.

And I didn't get that. It's not wowing me.

I'm sorry, but I won't be investing and I'm out.

No problem, thank you.

The opportunity in terms of investment,

at 500K for 11% is about as attractive as eating a rotten egg.

-OK, fair enough.

-Fair enough.

You should have come in at a realistic level to get

the one person that could turn this into something special.

But I'm not going to invest today and I'm out.

-Thank you very much.

-Thank you very much.

Despite a promising initial pitch, Tayub and Afnan are leaving empty-handed.

Their valuation of the business's overall worth

having effectively scuppered their chances of Dragon investment.

-That's it, isn't it?

-We got lost in the valuations.

Given the business we operate in and the market we are in, we were,

in my opinion, realistic in valuations.

You've really got to believe in the brand and be passionate about it as an investor,

and I just don't think the Dragons...

They didn't come with passion, I don't think

they understood the business as we would have liked them to.

They were certainly not the first entrepreneurs in the Den

who felt they'd been misunderstood.

-That was rough, wasn't it?

-It was a mauling and a half, that was.

-Yeah.

It really was surprising. I'm really, really surprised.

-It wouldn't have made any difference at all.

-They just weren't interested.

Richard Yu, who came in wanting a £50,000 investment

for his unique twist on the traditional hot water bottle,

was hoping the Dragons would share his passion for the product.

It was a really, really bitter winter's evening

and I had a traditional hot water bottle on my chest.

My chest was warm because the hot water bottle was there.

But my legs were freezing and it was my Eureka moment.

I want to make the world's first long, slender, beautiful, soft hot water bottle.

It's being sold for £199 in Harrods.

-Have you made a profit on selling those products?

-No, we've made an £80,000 loss.

I spent a lot of money loosely and naively.

What does Yu Yu mean?

That's my name, Richard Yu, and a lot of people call me Yu Yu.

Personally, I feel a warmth to it, so it was important for me to use that.

The most ridiculous name to call this product.

Totally egotistical, totally about you...

and it's wrong.

And Piers Linney believed he had spotted a more serious issue than just the product's name.

I could probably keep one leg warm, or my back, or my waist.

You've still got the same fundamental problem,

it doesn't really keep much of you warm.

-I think it's a genius idea.

-I disagree with that.

What you need to do is design a square one where you can

-manufacture as many as you like, sell them cheap.

-Thank you.

LAUGHTER

You have got a moment here to convince us to hand your cash over.

-My grandmother told me when I was very young that I should...

-Oh...

..she said that you should make your own footprints in the snow.

I'm not going to hand you a cheque because your grandmother told you a story about footprints in the snow.

-I actually love the product...

-Thank you.

-..because it's cashmere, it's got mother of pearl.

But there's no money to be made because it's too expensive.

I wish you great luck, but I'm certainly not going to invest my money.

Sadly for Richard, neither design expert, Kelly Hoppen,

nor any of the other Dragons viewed his long hot water bottle as a viable investment.

Richard, I think this is just absolutely crazy.

-And for that reason, I'm out.

-Thank you.

Next up is Ross Mendham.

He's a fitness buff looking for a muscular investment of £60,000.

He used to be a personal trainer, and he's come to the Den with a product inspired by his old career.

Hello, guys. I'm Ross Mendham, managing director of Bare Naked Foods.

When I was younger, I was always slightly overweight and as a kid I was bullied as a result.

In my teenage years I suffered from body dysmorphia and it really got me down.

I did, however, decide to do something about it.

I hit the gym, eventually got a six pack and a chest most men were envious of.

I had just started another low carb diet, and I was thinking,

"I really fancy pasta," but I couldn't eat it.

So, started researching, is there an alternative?

Couldn't find anything, so I thought, "Right, I'm going to do it myself," and my company was born.

There are two products we are currently selling online on our website.

One is Bare Naked Noodles, one is Bare Naked Protein Noodles.

Both are under 30 calories, they have no fat, they are gluten-free.

They have no nasty ingredients either.

I really need a volunteer to help me for two minutes, just to show you how quick and easy it is...

-I'll do it.

-Yeah, Kelly? Thank you very much.

What I'm going to do first is put some oil in the pan.

Simply...open the bag.

And drain the water.

-When you said two minutes, how many minutes do you actually mean?

-Erm...

I think...well, two minutes, I usually do this in two minutes.

-Could you hurry up?

-Yes.

I think we're pretty much there, so another minute.

-Let me get the plates out ready.

-Is that it?

Thank you very much, Kelly, you've been a great help. Thank you.

-Could you serve it now?

-Yes.

Leave him alone, what is the matter with you? Have some patience.

A nervy pitch from Ross Mendham, from Norfolk.

He wants £60,000 in return for a 20% share of his business.

Having sampled Ross's noodles, the Dragons want to discover more about their contents.

-Erm, so, I heard a lot about what it hasn't got in it.

-Yes.

What has it got in it?

Right, it's got oatmeal flour, Konjac flour...

soya bean fibre...

..and calcium hydroxide.

-You say they are gluten-free?

-Yes.

-But you say they have got oatmeal in them.

-Is it a gluten-free...?

-It's oatmeal flour.

Oatmeal flour's shown it doesn't have gluten in,

but sometimes mimics gluten-like symptoms.

I think you're wrong because I actually have a gluten allergy.

If I have normal oats, my fingers will swell up.

Kelly Hoppen has thrown Ross's initial claims about the content of his noodles into doubt.

And Deborah Meaden is about to subject the ingredients to further scrutiny.

I want to see this proof that says this is gluten-free.

I'm going to explain that to you.

You probably need to, because at no point on that piece of paper

-does that say this is gluten-free.

-No, erm...

..it's not, because...

The ingredients is cornflour and rice flour, not oatmeal flour.

-So it's not gluten-free?

-It is gluten-free.

Ross's confusion over the composition of his noodles has riled some of the Dragons.

It falls to Piers Linney to defuse the situation.

Ross, I think everyone has gone off on a gluten tangent here.

-I think, fair play to you.

-I completely understand...

Let me carry on.

Fair play to you, I can see the idea and you've got up and you've done it.

That's your problem, I think you've maybe nearly done it.

But you've got an idea, can you get there? I don't know.

-What's your 60,000 for?

-Warehouse...

-Warehouse?

That's not the best thing to start with.

Additional stock to cater for the increasing demand.

Marketing and product development.

I think you should put product development at the top.

I've realised, I've learnt today that's going to be the most important part...

-Way before your warehouse.

-Well, yeah.

Ross is struggling to win the confidence of the Dragons.

But will news of a potential distribution deal change the mood in the Den?

Currently we have interest from two national high-street retailers.

One with 800 stores, one with 600.

We are very close to signing a deal with them.

You have agreed a price to sell them?

Yes, £1.33 and it costs us to make, 41p.

-So you make approximately 85, 90p per packet to this company?

-Yes.

-And they're going to take how many from you a month?

-8,000.

-How much profit would that make you in a month?

-That will make me...

You'll have to forgive me, maths wasn't my strong point at school.

-I'm starting to realise that.

-Yeah!

Ross's tenuous grasp of his numbers has frustrated his audience.

And Deborah Meaden has heard enough.

Ross, I've got to tell you, this is a very disappointing presentation from you.

I don't think you know enough about this product to make

the claims that are sitting on the front of this packaging.

You need to be very careful about that.

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

-Thank you, Deborah.

A blow for the young entrepreneur as a first Dragon walks away from the chance to invest.

Will Kelly Hoppen prove any more forgiving?

Problem is, the texture wasn't great,

it really kind of disturbed me, the way it tasted.

What you said to Deborah was, it isn't oatmeal,

it's actually corn and rice, which is gluten-free.

But why have you got oat on the packet?

You don't know your product well enough. For that reason, I'm out.

With two Dragons now having bowed out,

Ross's chances of securing the healthy £60,000 investment he came for are looking slim.

Duncan Bannatyne wants to find out more about the man behind the noodle.

At the moment, how are you funding your lifestyle?

I have a fantastic wife who erm...

..sorry...

Sorry...

HE SNIFFS

HE SIGHS HEAVILY

-Just take a minute, Ross, and come back.

-Sorry.

Take your time.

HE SOBS

He should come back or he's going to kick himself if he doesn't finish this.

-He'll come back.

-He needs to come back.

-I do apologise.

-No problem.

So obviously, this is something that is very emotional for you.

But I want to get back to about how you fund your lifestyle

-and you were talking about your wife?

-Yes.

She supports both of us while I'm getting the business off the ground.

-She's working to do that?

-Yes.

-Full-time?

-Yes.

-OK.

Unfortunately, she had a third miscarriage before I came...here.

Sorry to hear that, Ross.

HE SOBS

It can only get better, Ross. It can only get better.

What we've just heard, as we can see it's emotionally heart-wrenching.

It's great that you're here, but you're not here for sympathy,

you're here to gain investment in a business that you were

-supposed to demonstrate had a future.

-I know.

What you've presented today, frankly, tastes like baby food.

-I know.

-I think you've got a good brand.

I think Bare Naked Foods is clever.

And that's why I'm going to make you an offer.

HE LAUGHS

And I'm going to offer you all of the money for half of a business

that we've yet to create together.

HE SOBS

I think you deserve a break and I think you're the kind of guy

that will make it, given an opportunity.

HE EXHALES HEAVILY

Sorry, I can't believe this.

While recognising that his business needs plenty of work, Peter Jones

has spotted a spark of potential in this young entrepreneur.

Now, Duncan Bannatyne is ready to have his say.

I'm not going to make you an investment offer.

I'm going to make you two investment offers.

I'm going to offer you the same as Peter Jones offered you,

£60,000 for 50% of this business.

And my second offer is, £30,000 for 25% of the business.

Which means to get my second offer you'd have to have another Dragon to match my offer.

Investments like this are about investing in people.

So I'll make you an offer as well.

So I'm going to offer you the same as Duncan.

So it'd be 30,000 for 25% of the company.

I'm going to make you another offer.

The full 60,000 for 50% of the company.

So, just to complicate it further...

..I'm happy to work with Peter on that as well, if he was willing to split.

But that's up to Peter to decide on that.

Piers Linney has made a bid to align himself with Peter Jones,

but will he agree to share the deal?

It's normal that you would ask the Dragon what they're going to bring to the party,

-but I wouldn't mind asking Piers what he's going to bring?

-Youth.

LAUGHTER

Good answer!

Some energy. So let me answer the question, seriously.

I'm on a trajectory, a slightly different place maybe in my career and the development

of my business, so I can understand where you are a bit more.

You'll find out very quickly that I will help you get to where you deserve to be.

Would you go into business with Piers?

The offer is for 60,000, I'm not willing to share it with another Dragon.

That's fine.

I'd like to accept your offer...

Peter, for £60,000 in return for half of my company.

-Excellent.

-Excellent. Well done.

APPLAUSE

-Well done.

-Thank you.

LAUGHTER

-Thank you very much.

-You feel all right? Don't faint on us.

No, I'm not going to faint. Thank you very much.

Ross has done it.

Given his shaky start, it's been a truly remarkable turnaround.

Peter saw my resolve, and Peter saw my determination.

And with his investment, Bare Naked Foods will be a worldwide brand,

and it will be successful.

And I can't wait to be working with him.