Episode 10 Dragons' Den

These are the Dragons.

Wealthy, well-connected,

innovative and influential.

Each week, they make or break the dreams

of dozens of budding entrepreneurs.

-You ready, Kelly?

-Yes, I'm ready, Peter.

-Let's go.

I'm a natural investor for you, but...you've stopped me.

I don't want to have to redesign...

I've asked the question, Duncan, so I'd like Benjamin to answer it.

I'm not entirely convinced about this.

Although...I sort of like it, in a way.

Thank you.

Why have you felt it necessary to come in here

and try and pull the wool over our eyes?

Leisure and marketing expert Deborah Meaden...

..telecoms giant Peter Jones...

..and hotel and healthclub 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 Dragons' Den,

where a fresh batch of cash-hungry entrepreneurs are ready to

face five self-made millionaires, hoping to convince them

to invest in their business ideas and inventions.

Now, most of us have had a bad night's sleep from time to time, and

first to face the Dragons today are a couple who believe they can help.

Their answer involves sheep, but at no point do you have to count them.

Hello.

My name's Roger and this is my wife, Lesley, and we've come here today to

ask for an investment of £130,000 in our company and offering 15% equity.

Four years ago, we decided to reinvent the blanket.

Wool is the ideal material for bedding,

it's the most breathable natural fibre known to man, it has

the ability to regulate temperature of two people sharing the same bed.

It's hypoallergenic, it's resistant to dust mites

and it's resistant to mould spores.

Wool is far superior to polyester, feather or down,

and we're on a crusade to try and convert the British public back

to sleeping under wool, but not under a blanket, under a Baavet.

A cosy pitch from Roger and Lesley,

who are seeking £130,000 in return for a 15% stake in their business.

But queen of home furnishings Kelly Hoppen foresees a problem

with their plans for a wool-inspired revolution.

The problem that you're going to have with this is converting people.

We know.

Cos everybody's already got the bedding,

and so it's an extra cost to convert.

If the British public can be converted from wool to a feather

and down within ten years when there wasn't an internet,

when there wasn't the word of mouth that we've got today,

I believe we can convert them back much quicker.

And that's what's happening in our experience,

so there's a big move to not only wool but natural products.

-Is that one of your products, there on the bed?

-Yes.

-These are the duvets.

-Can I have a look at it?

Course you can, yes, please.

Not sure we've got a big enough bed for you, though!

You just wanted to lie down, Peter.

Just want to see how hot it is and sweaty.

Ah!

I'm a great advocate for wool, and it is a lovely product

and I don't know why we ever forgot it.

You've got me there - so far, that's great.

-But, in the Den, I'm looking for a business investment.

-Yeah.

So you've been trading for four years.

Talk me through your revenue over those years.

In the first year, we turned over about £1,000.

In the second year, that went to £18,000.

In the third year, that went to £120,000, and this year,

with a month to go of the year, we're on target for £250,000.

Last year, net profit...

27%.

..£27,000. This year, £54,000.

27%. It's a net profit of 27%.

You can't have £27,000 as a net profit

against £120,000 and be 27%.

-Roger's usually wrong on the figures.

-Yeah.

Do you mind if I can just ask a question

so I can get out of this bed?

Go on. Ask your question and get out of the bed.

-It's quite heavy.

-Is it?

That surprises me.

People tend to tell us that they're lighter

than they expected them to be.

I know a lot about bedding.

There are duvets now that you can get which are very light,

so literally you can't feel them on your body, but they've got

different types of filling which just adapts to the body heat.

-Which is what this does.

-Naturally.

-Naturally.

What do you need the money for?

We need about £117,000 to upgrade the existing carding line,

replace the quilting machine and make it all synchronised.

If we have the new machinery, it would just...

It should actually cut down on our waste and our costs.

That's not a compelling business case.

How much is it going to drive cost down?

We're not too sure.

Surely when you decide to spend £117,000

you say, "This is the benefit,"

or is it just because it's my £117,000 that you haven't...

-Probably.

-Yeah, that's not a good answer in the Den.

-I'll leave the figures to Lesley.

-So go on.

What's the benefit of spending £117,000?

Well, the machine we have requires two people constantly

-to be there operating it.

-OK, so you can cost that.

You can say, "So I only need one person." So that's what I'm after.

What's the financial decision behind spending £117,000?

-You haven't done that, have you?

-Percentage-wise?

-No, we haven't done that.

-We haven't done that figure.

A woolly grasp of the figures from Roger and Lesley.

And now Peter Jones is keen to test the logic behind the £850,000

valuation of their business.

If you had an opportunity now to get three quarters of a million pounds

in your bank account but I asked you to walk away from the business,

would you take it?

-I don't know.

-Probably.

-That's a toughie.

We'd have to go and discuss it for a few minutes.

Do you need a marriage guidance counsellor?

-We certainly would, yeah.

-Probably.

If you're potentially willing to sell your business

for £100,000 less than what you're asking me today to invest in,

that kind of tells me a story as a potential investor

that you have overvalued your business coming in.

-Quite possibly.

-OK.

It just makes your valuation a bit baa-rking, doesn't it?

SHE CHUCKLES

Your valuation at the moment, I think at this stage, is crazy,

and I think you'll probably go out of here

and think about that valuation point.

But I can change the valuation

because I can make you a different offer.

But you've stopped me from doing that by not evaluating

how you're going to apply those funds

and the effect it's going to have on the business.

I'm a natural investor for you,

but you've stopped me.

OK.

And I'm sorry for that. But I won't be investing. I'm out.

Thank you.

A blow for Roger and Lesley as an initially enthusiastic

Deborah Meaden walks away from the deal.

Will Duncan Bannatyne be more warmly disposed towards

the bedding entrepreneurs?

I like it, I like the business.

Um...

I'm going to make you an offer.

What I'm going to offer you is half the money, £65,000.

But for that £65,000, I'd be looking for 25% of the business.

That stopped us in our tracks.

It's a question of whether we're going to follow like sheep

or whether we're going to go our own way.

I love you as a couple, I love the fact you've built this business.

The fact is, I wouldn't buy one.

I know, I know, and I'm very organic, but I like nothing, like,

something that's so light on me,

and it feels slightly claustrophobic, the wool.

I'm not going to invest. I'm afraid I'm out.

-But I honestly do wish you luck with it.

-OK, thank you.

Like the product, think you've done a great job.

I just can't get excited by it, I'm afraid.

I think there is a market for this.

-You will sell some, but it's not for me, so I'm out.

-Thank you.

So far, no-one has matched Duncan Bannatyne's offer.

And with the chances of securing an investment now

hanging by the slimmest of threads, everything rests on Peter Jones.

What do you think of Duncan's offer?

Don't know. We need to confer.

-Don't we?

-Yeah.

Obviously, it's not the amount we require.

I'm not interested in punting this on my own.

I think it's a large amount of money

and I think Duncan's done the right thing by offering half

because he's de-risked it for himself.

So what would be the offer?

Or don't you want to make one?

I will offer you...

..£65,000...

..and I too will match Duncan's 25%.

-Thank you very much for the offer.

-So we'd all be equal partners.

-Can we confer?

-Confer.

We're not going to give them 50%.

No, we're not, are we?

Because we believe in what we're doing.

Even if it's a bit slower, we'll take that chance.

I don't know, actually. THEY LAUGH.

OK.

It's a very difficult decision and we're not even sure

if we're making the right decision.

It's been a very, very long, hard road to get where we are,

and to actually give up 50% of the business

is a little bit too high for us.

So, unfortunately, we are going to say...

Thank you but no thank you.

If that's your decision, I'm sad to see it go. Good luck to you.

-OK, thank you.

-OK, thank you.

So Roger and Lesley had two offers

but they decided that handing over half their business

to the Dragons was ultimately

too high a price to pay for investment.

-It was a hard call.

-Yeah, it was. Very tough.

And when you're in there you're so tempted to say yes, aren't you?

-Yeah.

-I think we're insane.

-THEY LAUGH

We probably are.

The Den sees no shortage of entrepreneurs

who are also husband and wife.

But confronting five of Britain's sharpest business brains

can put even the most solid of relationships to the test.

-Do you get on at the moment, husband-and-wife?

-Yes!

What happens if I invest and you don't get on?

-So did cordial bring you together?

-In some ways, yes.

-Not often you can say that.

-Exactly.

I think you're adorable.

-It's not put on, this is really you.

-Yeah, it really is.

I can guarantee that, yes.

Married couple Peter and Claire Lomas

were seeking £50,000 for a 15% stake

in their compact trailer business.

We'd like to introduce you to Towbag.

The world's first truly foldaway trailer.

It folds away in under five minutes from this to this

without the need for any tools.

Peter Jones was first to question the viability

of the space-saving product.

That looks about as practical as an ashtray on a motorbike.

We've spread it out a bit here for display purposes.

-The trailer is a very popular accessory.

-I'm not saying it's not.

I've got two trailers at home. I don't personally use them.

But I've got two trailers at home.

Yeah, but you've got 300 acres to put it on.

Some people live in a terraced house

but they've got no access to the backyard through the sides.

They can carry it through the house,

put in the garden shed in the backyard.

A sceptical Deborah Meaden was unconvinced

about the size of the market.

If I only very rarely need a trailer,

I'm going to borrow somebody's trailer.

I'm not going to sit with that in my backyard

or in my flat for the sake of the once or twice.

If I use a trailer regularly, that's not going to do the job

because it doesn't look very robust.

It is, it's very robust.

I would worry about putting too much on the back of that.

For camping, for garden waste, for general household waste,

for moving large, bulky items.

You'd be hard-pushed to put more than 200 kilograms in a trailer.

Despite scrutiny from the Dragons,

Peter's defence of his product had impressed Kelly Hoppen.

The best bit about your pitch

was actually watching you get so animated.

I mean, I've never seen anyone so excited.

Clearly, you're passionate about this.

But Duncan Bannatyne had been closely observing

the couple's dynamics and was keen to discover

if Claire was as committed to Towbag as her partner.

Peter, you come across very, very good

in convincing everybody that you believe in this.

Your wife doesn't.

All of her body movement since she came in

tells me she doesn't believe in this product.

She believes you've made a big mistake.

And she's told you you've made a big mistake

and she's told you it's not going to make any money, hasn't she?

-She hasn't, no.

-Like Pete, I totally believe in it.

Speaking to the target audience, the trailer will definitely sell.

Where their business is concerned, Peter and Claire

appeared to be of one mind.

But when it came to a product with genuine mass-market appeal,

the Dragons felt that Towbag was trailing a long way behind.

Some things don't need inventing if there's not a market.

This is not something for me. I'm out.

Thank you very much.

Next into the Den is a Ghanaian entrepreneur

who believes his hot chocolate drink

is perfectly placed to exploit our collective sweet tooth.

But will the prospect of setting up a factory in Africa

stir the Dragons?

Hello, my name is Benjamin Mougarbel.

I'm here to pitch for £65,000 for 10% equity of my company,

Benjamin's Hot Chocolate.

Benjamin's Hot Chocolate is an in-cup product.

The content is sealed at the bottom of the cup.

So what you do is when you remove the foil seal,

you have the content beneath.

It's very convenient, very easy and very hygienic.

I have currently been able to secure £433,000

from one investment company,

and I have over five million-plus cup orders in 11 countries.

Would you like to taste Benjamin's Hot Chocolate?

Oh, yeah.

An appetising pitch from Benjamin, who is looking

for £65,000 in return for a 10% stake in his Ghana-based business.

But will a cup of Benjamin's Hot Chocolate have sweetened

the Dragons towards the prospects of a deal?

-So, what you want me to do is invest in a company...

-Yes, sir.

-..that's going to build a factory in Ghana?

-Yes, please.

-And start making chocolate in Ghana?

-Yes, please.

And export to the rest of the world.

What's going on in Ghana at the moment in terms of business?

Ghana is the fastest-growing economy in West Africa now.

It's very stable now.

The Ghanaian government are giving Western investors

the opportunity to invest in Ghana.

So therefore there would be 100% exemption on direct

and indirect duties and levies

and also 100% exemption of income tax on profits.

Why did you turn towards the hot chocolate market?

I've been in the marketing and advertising industry

for about ten years now.

Hot chocolate is a beverage that cuts across all range of people.

Adults will drink hot chocolate, kids will drink hot chocolate.

People drink hot chocolate in Ghana already.

Benjamin plans to undercut the competition on price

both in Ghana and here in the UK.

But Kelly Hoppen is concerned that however popular this beverage

is in West Africa, it will always have limited appeal

in the health-conscious British market.

Cocoa and chocolate, fabulous.

The fact it's in a cup and you can pour water in it, great.

And I love the name. The problem is the content for me.

-There is 362 calories in that cup.

-Yes.

That's a lot of calories, so it's not a terribly healthy product.

We will improve on the content

because what is happening here is people want to go more organic,

they're watching their health, their watching their diet,

so we intend to make the product a much more healthier product.

Three things in your pitch.

One thing, £433,000 secured.

Yes, sir.

And it's in your bank?

Not yet. We are on the due diligence process.

And what is happening here is I have the letters of intent.

Let me have a look.

Thanks.

So if that doesn't happen for whatever reason,

due diligence isn't what they thought it was going to be,

what happens?

It's going to happen.

I've worked in venture capital, private equity for years.

Until the ink is dry on that agreement, it may not happen.

It's totally irrelevant

because the investment would be subject to the £433,000...

-I'm just interested...

-Anyway, so that's it.

-Yeah, but is it..?

I don't know why you have to redesign

somebody's complete business plan.

I've asked a question, Duncan. I'd like Benjamin to answer it.

So what would happen? Could you progress the business?

It's going to happen.

So far the Ghanaian entrepreneur is keeping his cool.

But Peter Jones wants to drill down further

into some of his initial claims.

Let's pause for a minute and smell the hot chocolate, shall we?

You've made, when you came in here, some pretty amazing claims.

Why have you felt it necessary to come in here

and try and pull the wool over our eyes?

This is nonsense. You don't have £433,000 secured.

You've got a letter that says

they're going to look to try and invest in your business.

They haven't even started a due diligence process.

So that's worthless.

Hello, Peter. Sorry for the misleading.

Is it right that you have not secured £433,000?

-I have secured £433,000.

-Oh, no. Don't do that.

-Benjamin.

-It's the truth...

-Owe it to yourself to be honest.

Don't do this.

Believe me, I am very, very honest,

and I've secured £433,000.

-You have not.

-Yes, I have.

That letter has not given any credence to you securing £433,000.

And then you talk about these orders that you've got,

and you have no more than just people writing to you

to confirm that you can sell your product at various events,

they'd be willing to take your product on.

You haven't got an order of five million, have you?

-I have.

-Where's the order?

It's not an order but letter of intent.

-Is that the letter you're talking about?

-Yes.

-No order for five million.

-It's...

-No intent for five million.

-Can I see the letter, please?

Sorry.

It states here that the company "intend to be a sole wholesaler

"and distributer for Benjamin's range of products and offers its huge

"experience in retail dynamics

"of the Ghanaian market to Benjamin's Hot Chocolate

"so as to become a household breakfast of choice."

Where's the five million order from that company?

They have 11,000 outlets.

Where's the five million order from that company?

It doesn't state five million.

I do not have an order but I have letters of intent.

I don't have an order of five million.

You don't have an order for five million.

Thank you.

I'm out.

Benjamin has lost his first Dragon.

A disgruntled Peter Jones has bowed out.

Will Kelly Hoppen prove any more forgiving?

I don't think for one minute you're a liar.

I think the way you came in and delivered it was incorrect,

but I don't think you did it with malice at all.

I don't like the product.

It's not something that I would invest my money in,

but I honestly do wish you all the luck, but I'm afraid I'm out.

Thank you very much.

You are mistaken in your beliefs in how this is going to take off,

and so therefore I'm not going to invest and so I'm out.

Three Dragons have now walked away from the deal.

Will Deborah Meaden or Piers Linney be prepared to back Benjamin?

If I decided to give you this money, I would have to do

a lot of due diligence and given the way you've presented this

it would be a lot of due diligence.

There is a huge amount of work to get anywhere near comfortable

making an invest in this business.

One thing I want to add is I am an honest man.

I'm not saying you're not for one moment.

I've been doing this by myself for the past two years.

And it hasn't come easy, which I didn't expect it to.

But once you see this is a good product,

I know that with your contacts you could put us where we ought to be.

Even if you are the most honest man on Earth,

and you do have a great idea, I would find it very difficult

to get comfortable with investing in this, so I'm out.

It's difficult enough to due diligence an investment,

but to due diligence a country, its structure,

what's happening there, it's a big ask.

To look at all of the evidence we've got ahead of us,

and actually then take a leap of faith, which could be quite

exciting and thrilling and interesting

to actually set up a manufacturing process

over in Ghana,

but you would have had to deliver the sharpest pitch

with the strongest evidence,

and the evidence is weak.

And I'm afraid, put all of that into the pot,

it doesn't help me invest, so I won't be. I'm out.

Thank you very much.

Thank you.

So a bruising encounter for Benjamin who leaves the Den empty-handed.

A sugar-coated pitch ultimately resulting in his prospects

of investment turning sour.

I'm feeling disappointed.

I think the documents I've brought into the Den today is credible.

If you're going to the Den and you do a timesheet,

you need some orders, you need some letters.

You can't set up a manufacturing plant in Ghana

without half a million pounds.

But I just know Africa's like...

I bet you he'll get it off the ground.

-I hope he does.

-I hope he does.

Benjamin's Hot Chocolates is already a success

whether the Dragons invest or not.

Other entrepreneurs that have tried in the Den

include Rory O'Loughlin.

He came in hoping to create a stir

with what he believes is a must-have multifunctional kitchen accessory.

Imagine you're cooking up a lovely Thai green curry at home

and you've just stirred the sauce.

What do you do with the spoon?

You pinch Frogjaws' legs, it opens its mouth,

place in position on your cooking utensil.

Now it's really, really hard to remove

so it will travel with you while you're cooking.

You can pinch Frogjaw onto your loaf, it will keep your bread fresh.

Put Frogjaw down, flat, and it stops the bottle rolling.

Deborah Meaden wasn't bowled over by his spoon stand invention.

Oh, still tips forward.

Oh, still tips forward.

Ah, now tips back, and at that point I don't know about anybody else

but I think that is going to get stuck on it.

You'll get a frog in your soup.

Dragons, you are...

"Brilliant" is the word you're looking for now, Rory.

With the heat turned up, it was time for Piers Linney

to bring the knives out.

Have you invented something that doesn't need inventing?

-And then over-engineered it?

-Um...

Piers, no, I don't think so.

-Is it OK if I get a glass of water?

-Yeah, yeah, of course.

You've got a frog in your throat.

HE LAUGHS NERVOUSLY. It's just getting a wee bit croaky.

While keen cook Duncan Bannatyne saw merit in the product...

I absolutely loved this. I think it's absolutely fantastic.

..he struggled with the branding.

But I have to say, I think it's got a stupid name - Frogjaw.

I don't think it's really anything to do with frogs.

I'm waiting for the business lesson.

And interiors expert Kelly Hoppen was intrigued by how Rory planned

to leapfrog the big players in the kitchen utensil market.

What else do you know that's out there

that's comparable that has sold millions?

The major competition would be the Joseph Joseph range.

-Or Alessi or Philippe Starck.

-Yes.

You know, Philippe Starck did come up with some pretty iconic,

incredible designs for the kitchen that no-one else had...

-He brought a kettle out.

-Right.

-And they were all quite quirky.

-Yeah.

I just think that the product, for me,

isn't brilliant enough that it's going to sell huge volume.

This is something that should form quite a small part of a range.

It is not the foundation of a range, and that is the difference

between where you are now and those other big brands we've talked about.

A neat idea or a messy irritation?

It was left to Peter Jones to serve up a final helping of Dragon wisdom.

You have pitched a gimmick product that will become a fad

and ultimately, the more of these that you have around your house,

the more annoying they will become.

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

So far, no-one has left the Den with an investment.

Unfortunately, we're going to say...

-Thank you.

-Thank you.

-But no.

-But no, thank you.

Will any of these entrepreneurs succeed in striking a deal?

Part of the bit about weighing something up

is how good are the people in front of you, and you're very investable.

-Thank you.

-Thank you.

Given that smartphones and tablet computers

are so prominent in modern life,

we've had surprisingly few innovations

based around these products in the Den.

Our next entrepreneur is flying the flag for technology

with what she thinks could be the 21st-century replacement

for the traditional shopping catalogue.

Hello. My name is Karoline Gross

and I am here today with my business, Smartzer.

I am here to raise £100,000 for 10% of the business.

Smartzer is a mobile and web application

that enables interactivity on video content.

To illustrate this,

I made a demo video of our current iPad application.

So, as we are watching these videos,

we can touch the screen to reveal these icons

that will instantly tell us more information about the products.

Clicking "order now" will take you directly to the website

that sells this particular product, where we have more information,

we can purchase it or go back to the show.

And we can also share via Facebook, Twitter or e-mail and,

for example, send this link to a friend and carry on watching.

So, I hope that has clarified how our product works.

The problem that our product is solving

is inefficient monetisation of product placement

for content owners and retailers.

Revenue will be generated through a hybrid of commission per sale

and licensing the technology.

Thank you very much. I welcome any questions that you might have.

A quick-fire pitch from Karoline, who is looking for £100,000

in return for a 10% share of her technology business.

But cloud computing pioneer Piers Linney wants to establish

more about how the software she has devised actually works.

-Karoline, hi, I'm Piers.

-Hi.

So, simplistically, I am a dress manufacturer or whatever,

I've got my five dresses, I've got a nice video of a fashion show,

blue, red, green.

I can run it through your system, tag the green one with a URL,

-put it on my website with my phone app.

-Yeah.

When somebody sees the green dress,

they see there's a logo and they click it

and it goes to a URL or shopping basket and they can buy it.

-Yes, correct.

-They don't have to go to your website.

No. You only go to ours for the tagging process.

We've built this very, very simple way of tagging videos

through an editor where you literally enter the product details.

You say the tag is here, it moves from here to here

and it is in place instantly.

So, how unique is it?

-Unique in...

-It's not a new concept, is it? At all.

No, I think this has been tried to do in the '90s the first time around.

But I think now people are more and more using devices

that will actually suit this type of technology -

for example iPads and mobiles and laptops - to consume content.

So, I think this is the perfect timing

to implement something like this.

So, what forum do you mainly see this being used in?

One of the first companies that has approached us

that we are talking to now is a TV show that has an app

and they would like to have this as an extra feature on their app

so people can purchase the items featured in that content.

So, they'll use it as a second screen experience

and through that, they can engage people a lot more

and also get sales through their products.

So, I have a company, I create a video.

-You would then create this?

-Yes.

So then, what is that going to cost me?

So, if you would like us to build you an application

or add this feature to your app,

it will cost you yearly £42,000 for the licence

and then, obviously, you will be generating revenues

through sales of the products.

And will you then take a percentage of those sales?

So, we would split the sales 50-50.

I'm just trying to work out why me with my warehouse full of goods

and fighting to my main margins, am I really going to give you...

a big part of my margin. I just can't see it.

I think this can hugely increase the amount of sales you're going to get,

so overall benefit for you is still going to be

very, very large in comparison to what the costs will be.

I am actually building an online business at the moment.

It's a Kelly Hoppen website. I'm using a similar application to this.

You're £42,000, is that a yearly fee?

Yes, that will be the installation and then a yearly maintenance.

Yeah. You see, I'm using a company, I give them a one-off fee,

they're creating the whole thing, the whole package for me.

This, to me, is you're making more money every year for something

that I can be doing once I've actually got

the whole system set up.

The fact that this big client has approached us

and offered to pay us a weekly fixed sum of money

does signal to us that clients

that would see huge benefit in this product are willing to do so.

You can't charge £42,000 for this type of technology.

I think you would be better off saying,

"Oh, we'll just sell this application to you for £500,"

or a couple of thousand pounds.

A very big retailer in the UK has put aside £200,000 a year

for their app development.

So, charging £42,000 for something that will actually generate sales

and is a very engaging way of doing so,

I think is very good value for money.

A solid defence of her revenue model

from the young technology entrepreneur.

But will it be enough to convince self-confessed technophobe

Duncan Bannatyne?

I think it's crazy to think that you're going to get companies

paying you £42,000 per year for a licence fee.

The only thing I can say is... I'm out.

I think what you demonstrated is great. I could see people using it.

I think the fact that you've gone very tablet-based

is new and is good.

When I do, and we create websites on a worldwide basis

for some major brands,

from the top end, you've got a complete end-to-end portal

and inside that portal, you've then got unique ways to display video

and encourage the user to have a user experience and buy.

Yeah.

You need a suite of applications and a further offering

and maybe there are some things that you could go to

to the next stage with something like this.

But, Karoline, I wish you the best of luck.

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

I disagree. I think you should focus on this application

and make it the best it can be.

You should be an online model

that just makes the stuff work seamlessly.

So, I think the model you've pitched probably isn't the business model

I think you should be going forwards with.

Um...

So, I think you're fantastic.

You've come here, you're very credible, you have achieved a lot

-but it is not for me, so I'm out.

-Thank you.

Three Dragons have now declined the opportunity to invest.

It is now down to Kelly Hoppen or to Deborah Meaden to make an offer.

Will they be prepared to put up to £100,000 she needs

to develop our business?

To try and charge somebody £42,000 a year

for something which actually probably will cost somebody less...

Once they've seen yours,

it will cost them a lot less to develop their own.

The licensing fee is too close to the development fee.

With things like this,

what you see on the screen is the tip of the iceberg.

As a comparison, I have had a quote from a large US development company.

Just to build a simple prototype of this would cost 150,000 -

a prototype.

400,000 for them to develop this as an app.

I could go to another company that would give me a different number.

As good as you are, as good as this is,

it is just down to that revenue model.

You know, if I paid that much money upfront,

I wouldn't want to have to pay anything else.

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

-I'm out.

-Thank you.

I think that you have to be careful

because there's a lot of competition out there.

You should be selling more of what you do for less.

So, for that reason, I'm out. But thank you very much for coming in.

Thank you. And I appreciate all your advice and the opportunity.

So, Karoline leaves the Den with plenty of suggestions

but sadly, no investment.

Despite enthusiasm for both the entrepreneur and her product,

a highly-ambitious revenue model ultimately turned the Dragons off.

-There are so many people doing it.

-Strange, wasn't it,

-because she's got everything right...

-It's nothing new.

But she got some much right and then to get the revenue model...

If you just go on Net-a-porter, you can do that.

Seriously investable individual, but pitched it wrong.

There is nothing that frustrates the Dragons more

than an investable entrepreneur

with an uninvestable hole in their business model.

Everybody likes the product, but I can't invest at these levels.

I am so sorry about that

because I would have loved to have got on board with this.

It's a massive flaw. I'm really upset about that.

As the Dragon who wears her heart on her sleeve,

you can always rely on Kelly Hoppen to proffer a heartfelt opinion.

It's getting sadder by the minute to me, honestly.

If somebody proposed to me with a fake ring, I would hate that.

The litmus test for whether

a business can become a Kelly Hoppen investment

is as straightforward as she is.

You've got a lot of sugar in here, and I'm really anti-sugar.

I don't know what the world's coming to.

I mean, this is the most ridiculous idea.

You've created something for lazy adults, nothing else.

To have something like that in my garden is an eyesore.

I mean, I look at it and I sort of lose the will to live.

As she's often inclined to remind us,

she's the name and face behind a globally-recognised brand,

and understands the power of marketing.

I have such a brilliant relationship with all the magazines

and all the press.

Don't get me wrong, it looks great.

It's just you're trying to build a brand, and I know about brands.

-Exactly.

-And, you know, it doesn't all fit.

I also have a huge celebrity client list that I can ring up

and say, "Try this, use it. What do you think?"

I'm going to give you some advice.

Get a PR company, get yourself into Tatler

and you'll create something for yourself.

Thank you for your feedback.

And when it comes to appraising an investment,

Kelly Hoppen has her own very special analytical techniques.

It's all about the person and you have to believe in that,

so there has to be, for me as a woman anyway, a gut feeling.

I love everything about the way you've come in here today.

I think you should be the face of the brand.

I think you're great. I think you've got huge potential.

I love you and I do love the idea of the product.

I think you're fantastic.

I might be mad, but I'm going to make you an offer.

£60,000 for 10%.

I would want 40% of both the businesses.

I think I'd like to accept.

-Yay!

-Accept the offer.

One of the most famous rejections in Den history is probably Trunki,

a ride-on suitcase for children.

It didn't secure an investment, but it went on to big things

and now you see them in airports the world over.

Well, I wonder if the memory of that will affect how the Dragons react

to our next couple, who are pitching a similar product.

Hello, Dragons.

My name is Filip Devogeleer and this is my wife and business partner,

Jessica Wang.

We are here today to ask for £70,000 in return for 15% of our business.

Our business is called Roomii Toys.

Our first toy is called the Roomii Monster,

a multifunctional toy children can play with, ride on

and put their toys inside and pull along.

It has only directional wheels.

That means that the toy can spin around very easily

and in any direction, so it's a lot of fun for the children.

It has a gently closing lid, it has rubber teeth,

and it has a pulling hook at the front,

allowing the children to pull the toy.

Thank you for your attention. You have any questions?

Is that it? Is that your pitch?

-This is our pitch.

-I like it. Short, sweet and to the point.

-Thank you very much.

-Thank you.

-Just like me, apart from I'm not short.

A Peter-Jones-friendly pitch from Manchester-based couple

Filip Devogeleer and Jessica Wang.

They'd like an investment of £70,000 in return for 15% of their business.

So, what do you do? Do you sit on it and you get pulled along?

Yes, well, there's several options.

-It's a ride-on toy in the first place.

-Can you not demonstrate that?

FILIP LAUGHS

-I'll sit on it.

-And I'll pull you.

FILIP CHUCKLES

-Are you ready, Kelly?

-Yes, I'm ready, Peter.

-Let's go.

-Stop.

-KELLY AND JESSICA LAUGH

-What was that like?

-What was it like? Was that a serious question?

Was it comfortable or not comfortable?

No, not at all, but I'm eight stone and so...

But I mean, it didn't feel unsafe, put it that way.

Thank you.

The Dragons have had some fun road-testing Roomii Monster.

But Kelly Hoppen wants to bring the conversation

back around to business,

specifically Filip and Jessica's competition.

I don't have children that are little any more,

so it's not something I would go and buy,

but I do in the side of my brain

see them being pulled around at airports and things.

I mean, how many other products are you up against, similar?

I think our main competition will be coming from

both toy storage and the ride-on toys.

-But the...

-And the...

But the thing is, our toy is a multifunctional toy, so...

Jessica, you know the answer to the question. Why don't you just say it?

-Um...

-Trunki.

It isn't, though, because it's not a suitcase.

It's not a suitcase.

No, but they've just said it's a combination of the ride-on,

which is Trunki, and storage, which would be...

It's home storage more.

It's not a product that you can take to the airport because it's too big.

-It's much bigger than Trunki.

-You wouldn't be allowed to.

It's not designed to be stowed away in the airport.

How much have you spent so far developing this product?

So far, we've spent £170,000 on the product.

Wow.

Can you repeat that?

£170,000.

Well, do you mind me asking where you got that money from?

-Personal investments.

-Yeah, private savings.

I have an apartment in China

and I sold the apartment to fund the business.

Have you got any orders at all?

We are at very early stage of selling.

We had a pitch with John Lewis about two weeks ago

and we got very positive response

and we were asked to go back for a second meeting in a few weeks',

and so far, they have shown us that they are very interested in our toy.

How much do they sell for?

£69.99.

How much do they cost to make?

£25. Including shipping from China.

So, what are you offering them in at the shops at?

The wholesale price is £35.

What are the shops' response to that?

Because that margin looks quite tight for the retailer.

It is a bit tight but they are positive about it.

They like the uniqueness of the toy.

They also do like the fact that the product has won

several international design awards.

What they'll like more than that is when the product sells,

because awards are lovely,

but has anybody said to you the margin is too tight?

Well, because we actually haven't, apart from John Lewis,

we haven't spoken to the other parties yet.

We're trying to get a foot in the door.

And I guess in the next couple of weeks,

we'll find out more about this.

The tight profit margin on the product

may be worrying Deborah Meaden,

but family man Piers Linney has a different concern.

-I've got a five-year-old and a two-year-old.

-Perfect.

-Yes.

Perfect. You might think.

PIERS LAUGHS

I'm just trying to work out,

would I have one or two of these kicking around our house?

I can't see it.

We've tested it with our own son. He's three years old.

We didn't tell him anything and he just did it spontaneously.

For how long, though?

He started playing with our first prototype

and he just played with it and so far,

we don't see any sign that he's bored with it.

-Can you pass me one, please?

-Yes, of course.

All right, there you go.

If you lifted it up, could you insert a potty?

-That we haven't tried, to be honest.

-We did put...

There might be a possibility to do so.

..some toys inside to show the capacity.

17 litres, 16.5.

Oh, that would have to be a big child to...

PIERS CHUCKLES

I wasn't... I was not thinking of that, by the way.

LAUGHTER

Well, you could. You could create a potty in the top of it.

I'm sure you could create a potty that...

-Wheel it along. That's going to work.

-Get your own.

A lighter moment in the Den,

as Roomii Monster continues to capture imaginations.

But is there something troubling Deborah Meaden?

There is something a little bit spooky about it.

It's almost like the face has been cut off.

I'm not sure that a child wouldn't find a hippo or a tiger

more exciting and engaging.

One of the things we would like to make available

is maybe sell together some stickers

so that the children can personalise the toy

and they can then make it their own.

They can put eyes on there,

they can make it, you know, the way they like, if they wish.

Now that Deborah has talked about its face and I look at it,

-when I first saw it, I could just see the teeth.

-Yes.

But I actually agree. It's actually a body without a head.

OK.

It's actually quite weird, looking at it, though,

without this face on it.

-Do you mind if I have..?

-Please, go ahead.

-Yes, of course.

Please go ahead.

I think we've got the solution.

-Oh, my god, Peter!

-I'm sorry, Peter, that's worse.

-Don't you like it?

-It's like it swallowed a small child now.

JESSICA GIGGLES

Roomii Monster's design may be award-winning,

but it's not winning over most of the Dragons.

Will Duncan Bannatyne share those reservations?

I'm not entirely convinced about this.

Although...

I sort of like it in a way.

Thank you.

I don't think I'm going to take a punt on this at £70,000.

But I would offer £35,000.

OK.

But for £35,000, I want 20%.

-Oh.

-Thank you.

-OK, thank you.

Filip and Jessica now have an offer for half of the £75,000

they were looking for.

Time for Kelly Hoppen to have her say.

I don't think it's something that I actually want to invest in.

It doesn't seem like it's a business that I could bring much to.

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

So, you've got no confirmed written orders?

No. I'm sorry.

We just started talking to retailers. We have ordered a first container.

-It is now coming on its way.

-On its way.

Our plan is to start with soft loans.

It's not very soft, a container load.

So, I'll tell you where I am. Um...

It's too much of a punt.

I'm out.

Everything now rests with Peter Jones and Deborah Meaden.

Will either be prepared to complete or better

Duncan Bannatyne's earlier offer?

I don't disagree that it's good design.

I just think it would be more engaging

if it actually looked a little bit like an animal

or like something that they could actually engage with.

But I don't think you're going to get me there, so I'm afraid I'm out.

OK. Thank you very much for your feedback.

Part of the bit about weighing something up

is how good of the people in front of you, and you are very investable.

-Thank you.

-Thank you.

Could I see this in some of the stores? Could I see it selling?

And I'm kind of at the stage where I could.

Um...

PETER SIGHS

It's the margin...

..that is the worry here

and I don't think you've got sufficient margin to launch this.

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

-OK. Oh, dear.

-So, it's just me left in, eh?

Yes.

If another Dragon had came in and matched my offer,

would you have taken £70,000 for 40%?

-Yes, we would gladly accept.

-Yeah.

It's a real shame.

I've got to say, I'm actually in for half of it,

but for all of it, I've got to be out. Sorry.

-Thank you very much.

-Thank you for your time.

-Thank you.

So, heartbreak for Filip and Jessica,

who came within a whisker of leaving the Den with £70,000

and the backing of two Dragons.

But instead, they walk away with nothing.

-That was a good offer, Duncan.

-I thought so, yeah.

I thought you'd come in with me.

No, I was really close. It was just that margin.

You've got to sell 100,000 of those to make any money.

At the moment itself when Duncan made an offer,

I was quite happy, saying, "OK, there will be another Dragon now."

-To match up, yeah.

-Too much this offer.

And unfortunately, it wasn't to be.

So, clearly maybe a bit more disappointed

than maybe if we'd had a no from all the Dragons, you know.

Well, it is the end of one of those unusual days in the Den

where the Dragons' cash remains unspent.

We've only had a handful of those in the history of the Den.

It wasn't for lack of trying, though.

Spare a thought for Duncan Bannatyne,

who was thwarted in his attempts to invest on two separate occasions.

The conversation about all of tonight's pitches

continues on Twitter using the hash tag #dragonsden.

Next week in the den...

-See you, guys.

-KELLY LAUGHS

I don't like it. I really don't.

That on its own, fine. Hate this.

-When do you run out of money?

-In about four months' time.

-So, you're really in big trouble, then.

-Yes.

Did you interrupt me to make the very same point I was making, Piers?

I'm just checking.

You said in three years, you will make £2.5 million.

That is a delusional comment.

Right, I'll take a punt with you.

So, this is an offer but it has got a big caveat.