Episode 3 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.

-It's just a toy.

-It's just a toy.

-It's just THAT you would value at £1 million?

It's a bit airy-fairy to me and YOU are a bit, to be honest with you.

-Do you think that's fair?

-Yeah. I could lose a lot of money.

Very easily.

Trial and error with your own money is one thing but with mine,

it's slightly worrying.

So you either need to make an offer or you need to go out.

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 Dragons' Den, where five great names in British business

have the power and money to make or break

the dreams of entrepreneurs pitching business ideas to them.

Remember, the Dragons know nothing about the entrepreneurs

or their ideas in advance of the pitch.

They have to take their one chance to invest

or walk away from the deal.

First to enter the Den is Laura Bartlett,

the founder of a fashion magazine, Urban Coco.

Call her brave, but she wants to buck the latest trends

by turning her online publication into a full, printed magazine.

-Let's get this under control.

-Good luck.

-Thank you.

# You lift my heart up

# When the rest of me is down

# You, you enchant me

# Even when you're not around

# If there are boundaries

# I will try to knock them down

# I'm latching on, babe

# Now I know what I have found. #

Hi. My name's Laura Bartlett from Urban Coco magazine.

I'm here today to offer £100,000 for a 15% share in my business.

It's something that I launched in June 2010.

It started online as an online magazine and just a hobby, really,

to write about fashion and events, initially in Leeds, but then started

getting interest from all over the country and covering events in

fashion in London and Manchester, to the point where in January last year,

I decided to quit my full-time job and turn my hobby into a business.

So I decided to move from online into print,

so from later on this month, the magazine will be

available on newsstands in 20 different countries

and I'm here today to ask for the investment to help me

turn my one-woman publishing machine into a fully-running company

that's not just run by me.

Happy to answer any questions that you might have.

A model pitch from 26-year-old Laura Bartlett who is looking

for £100,000 for a 15% stake in her fashion magazine, Urban Coco.

Piers Linney is the first to question the fashionista entrepreneur.

Hi, I'm Piers.

Why are you going from online to offline where the whole industry

is going in the opposite direction?

If less people are doing it, you've got more chance of standing out.

Like I say, it started in Leeds, so there weren't any other magazines in Leeds,

so I thought that by moving into print

and being the only fashion magazine in the city, it would be able to

raise the profile of the brand

and also with the whole blogging community and blogging

becoming such a massive thing, it was kind of hard to stand out online.

That is the main reason why I decided to move into print.

It didn't really work online, did it?

It did work online, yes, until, I think, blogging got so big.

Tell me what "it worked" meant?

It worked that I was generating revenue from online,

advertisers, and also getting quite a lot of hits.

So again... That's what I'm after, I'm after the successes on the online site

and the indicators that said actually, this will work better.

Yes, so I already had so many followers and fans

-that I knew that if I moved into print...

-How many?

8,000 unique visitors a month.

OK, so 8,000 unique visitors a month.

-Does that sound like a lot to you?

-Um, yeah.

Somewhat.

The £100,000. What are you going to spend it on?

To take on a full-time salesperson so there's someone dedicated to sales.

-A salesperson is how much?

-£18,000. Salary for myself, 25,000.

-Yes.

65,000 on marketing.

Um, the graphic design, which is £20,000.

Well, that's more than 100.

-Then, that's it.

-Well, no.

-That's more than 100.

-Yeah, the graphic designer isn't £20,000.

-It's 13,500. It was £1,000...

-Do want to do that again, then?

Shall we... Because the question was, start with 100,000 -

how are you going to spend it?

-25,000 on a salary for myself.

-Yes.

-65 on marketing.

-Yes.

No, 50,000 on marketing. Um, yeah, and the graphic designer,

and the full-time salesperson.

Ooh! You do know it's beginning to sound like you're just plucking those numbers out of the...

I'm not. It's just that I've kind of gone through them so many times.

OK, well, I assume you're not just plucking those numbers

out of the air but my worry is that the number that's reduced,

which I thought was under-shooting it heavily anyway, marketing

for £50,000 when you're going to be marketing in 20 different countries?

-Yeah.

-Does that sound like...that's going to even dent...?

Erm, yeah, I think it...would.

-Really?

-Yeah.

Laura's laissez faire attitude to her costs is confusing the Dragons.

But Peter Jones, who has himself invested in a magazine,

has altogether different concerns.

-Have you heard of Wonderland magazine?

-I have. It's fabulous.

And when you first walked in and I saw these,

being held by the models on the front cover, my heart started

to race a little bit and it started to race

not because of the models that were holding this

but because of the fact that I was concerned that this could enter

the market and be a competing product to Wonderland magazine.

But the minute I got it in my hand, I breathed a massive sigh of relief.

It's substandard quality, the content is just appalling,

I'd expect better or more from a student.

Whilst I'm happy because you will never,

ever compete with something I own, I would suggest that you have

a reality check, go back to the drawing board,

and make this 100 times more impressive than what it is today.

-OK.

-And for that reason, sadly, Laura, I'm out.

I appreciate your honesty. Thank you.

A brutal assessment by Peter Jones.

Will Kelly Hoppen, who has a good working

knowledge of the glossy magazine sector, be any more sympathetic?

I can see you're passionate.

And the way you've presented yourself and the way you

came into the Den, and it's always quite heartbreaking for me because

I think that passion is part of what drives a business and what you do.

But I think it's a lot of money, £100,000 to put in.

You're going to swallow that up in five minutes.

I think that you need to re-look at the magazine to have it more

lifestyle so that's interiors, fashion, food, health,

everything that people are interested in.

But it's not a business that I would invest in,

-so for that reason, I'm out. But good luck.

-No worries. Thank you.

I think what you have here,

really, in many ways is a potential college project piece.

I don't want to be unfair but I think that's how I view this.

I think you are going against the flow in a global industry

and you are competing with some very serious brands

but I don't think you're going to be able to make any noises at all

in the industry you're up against.

So, I wouldn't invest in this, I'm afraid.

-No worries.

-So, I'm out.

-Thank you.

Um...just because this is such a difficult industry

and you put a valuation on this of almost £700,000,

I really can't invest £100,000 in it.

-I'm out.

-Cheers.

Four Dragons out...

only Deborah Meaden remains.

I am delighted you have come to the Den today.

Thanks.

It's not because, I'm afraid, I'll be investing, because I won't.

But I'm delighted because you came early enough to get that advice

and, hopefully, stop you making those mistakes,

so you can use that spark of ambition elsewhere.

But I agree, everybody else is going the other way - for a reason.

Yeah.

It's not great.

And valuation - crazy.

So, no reason at all... You've given me no reason to invest,

so, I'm afraid, I'm out.

Thank you.

A tearful Laura has failed to convince the Dragons that her

fashion magazine has legs.

She leaves the Den empty-handed.

Thinking about what the Dragons said, I don't think they were wrong,

I just think that was their opinion and I'm not going to change

anything I was doing.

I'm just going to continue down the path that

I was going and try and prove them all wrong.

It's not unusual for entrepreneurs who've invested time

and money in their businesses, to have great self-belief.

Whether it's a new type of toilet brush...

The Toilet Maid has no messy bristles.

..a device to get babies on their tummies...

Tummy With Mummy is the world's only fold-away baby and toddler seat

with a built-in tummy-time platform.

..or a USB stick that the inventor thinks

will solve our password problems.

We all know that our passwords should look like this. However,

humans can just not remember so many different things.

Therefore, I proudly present to you, Aladdin.

Whatever the merits of their idea, however,

entrepreneurs need to follow certain rules in the Den.

Oops. Sorry.

The first is to be concise.

It's our Tummy With Mummy here...

..which is a giant market because it's global...

..it's 4.3 million and if you take in all the...

..through international retail, through licence...

Clarity helps, too.

I have been using one of these for most of my life.

Um...

Um... SHE MUMBLES

Mmm!

But even if memories fail and nerves take over...

Do I start again? Or, what do I do?

..entrepreneurs need to make sure any demonstration of their product

is a triumph.

What happens when the baby gets to the edge?

If I put the baby on here now, it squashes down with the weight of the baby so they slip off the edge.

They slip off the edge onto the floor - their face into the ground?

Is that the "slide" part of your invention?

All you do is swipe round, imagining what this actually is.

TOILET FLUSHES

If I found that key, can I break into it

and extract that strong password?

-Yes.

-Well, that's not ideal, is it?

A full grasp of facts and figures can help turn the Dragons around.

Have you got orders, then?

Not for the whole lot but we're part of the way there, yeah.

What's part of the way? Have I got to guess that as well?

Yes, you probably have to guess.

I've got to guess what you did in your business?

How many have you sold to date?

Er, none.

I've got to be honest, I hate what you've got.

I think that is absolutely ridiculous.

-Your pitch was appalling.

-I think it's terrible.

I'm completely confused.

Everyone's trying to solve that problem. You haven't.

Break the rules, face the inevitable.

It's very, very simple...I'm out.

Thank you very much.

Thank you, Dragons. Have a nice...

I'm not out yet!

I'm out.

ELEVATOR DINGS

The phenomenal success of Levi Roots in the Den

with his Reggae Reggae Sauce seems to have inspired

lots of entrepreneurs to pitch food ideas to the Dragons.

Hoping to win an investment with theirs

are Timo Schmidt and James Carter

who have a plan to deliver organic ingredients and recipes to the door.

Hello. This is James, and I'm Timo.

We're here today to ask you for £100,000 in return for 7% of equity.

Do you find it difficult to cook healthy

and delicious meals during the week?

Writing a shopping list, going to the store

and carrying home heavy bags can be pretty time-consuming.

Every week, we design ten new recipes for you to choose from,

to cook according to your preferences.

Everything is then delivered straight to your door

in the exact portion sizes.

So there's absolutely no food waste.

This concept originated in Sweden five years ago,

since when it has grown rapidly,

with currently 1% of the Swedish population using this concept.

If you translate that across to the UK,

1% of the UK population is equivalent to a £750 million market opportunity.

We are currently delivering 1,500 meals a month,

and our customers, on average, spend £50 per order.

To reach break even, we need to deliver 12,000 meals a month,

which we expect to achieve within one year.

Thanks very much.

We'd now like to invite one of you to prepare our smoked trout salad meal.

Of course, if none of you would like to do it,

me and Timo will prepare it while we take your questions.

I absolutely don't want to do it.

I haven't cooked in 28 years.

THEY LAUGH

-I'll do it.

-Sure. Great. Fantastic.

An accomplished pitch from the boys behind Gousto.

They're looking for £100,000 for a 7% stake

in their gourmet meals home-delivery service.

-Do I get an apron?

-Erm, I can give you mine.

-Yes, I think you should.

-Sure.

How can I be in the kitchen without my apron on?

As Duncan Bannatyne gets to grips with the ingredients...

Are you hungry, Peter?

..Deborah Meaden wants to get a taste of their business model.

Where are you sourcing products from?

So, we've got a fishmonger in Scotland,

we've got a farmer in Devon supplying the meat.

The veg comes from Somerset, Kent, mainly from the UK -

not entirely, but mainly.

It's all organic.

All these ingredients would come in separate bottles, marked?

Absolutely.

TIMO: So, it's labelled. You know exactly what it is.

So, talk me through that timescale.

How quickly do I see that box on my doorstep?

At the moment, on a Wednesday, you choose the recipes you like to eat,

then on Thursday we place orders,

and then we deliver to you next week...

Ah, right. So, this is a planned activity?

So, what happens when somebody tries to deliver and there's nobody there?

Has that happened to you yet?

Our delivery success rate is 99% at the moment.

So, on average, 1% are unsuccessful deliveries.

But that's an acceptable margin to us.

That's not just an acceptable margin, that's an excellent margin.

-Is that it?

-TIMO: Beautiful.

JAMES: Absolutely. Looks wonderful.

Mm! Want to taste it, Peter?

There you go. Go and sit down and eat it.

-Duncan, that's really good.

-Thank you.

Well done, Mr Bannatyne!

THEY CLAP

So far, so good.

The food's going down well with the Dragons,

and the entrepreneurs are keeping their cool.

But Duncan Bannatyne wants to know

if their balance sheet is as convincing as they are.

What are your overheads? Are you in a kitchen, a warehouse...?

The main fixed costs are the rent for the warehouse and our office.

For the warehouse, it's approximately £3,600 a month,

and then we also spend about close to £2,000 on the head office, as well.

How are you funding that?

So, to date, me and Timo each invested £75,000 each, individually.

And we've also raised £130,000 from friends and family.

Is it all gone?

Nope. We have about £90,000 left over at the moment.

You're losing money at the moment?

-Yes, we are.

-How much are you losing?

Erm, at the moment, £25,000 a month.

James, Timo, I'm Kelly.

I worry about the fact that it's not that spontaneous.

I might want a pizza one night, or something else.

-So...

-You eat pizza?

If it's gluten-free.

All I'm saying is, every time I've had one of those boxes delivered,

with organic vegetables in, I've ended up wasting a lot.

I don't know why.

One of the key points I'd make to that,

if I can jump in, is that quite often with those vegetable boxes,

the thing that's missing is that extra step where it's made

really easy for you to turn that into a fantastic recipe,

which...

I don't think you'll ever be in that situation where the box arrives

-and you don't know what...

-No, and I think it's great

that you're showing somebody how to cook it.

The biggest issue is you're losing a huge amount of money every month,

and that doesn't show me that you're a great investment.

Obviously, to set up this business, there is a small level

of fixed costs which we need to start off with.

And you have to start somewhere...

£25,000 loss a month, I don't consider a small level.

To establish a supply chain to do the fulfilment, to guarantee the 99%...

Tell me about it. I've run businesses, I understand,

but £25,000 - I'm amazed you describe that as a small...

JAMES AND TIM TALK OVER EACH OTHER

That is a lot of money to be losing a month

when you've only got £90,000 in the bank.

You've got... You've got...

Right now, you've got three months ahead of you.

You are not asking for anything like enough cash.

-Ah!

-Oh! It sounds like I've just stumbled

across something quite important there.

Absolutely. Probably should have mentioned it earlier.

We have £90,000 in the bank at the moment.

We are in very advanced stages of negotiation with some other

angel investors who are going to invest £250,000 in the business.

For what percentage?

So, they're investing £250,000 for £23.4% of the business.

A surprising development in the Den,

as Timo and James reveal that other wealthy investors are prepared

to inject a serious amount of money into their business.

Peter Jones wants the fine detail.

So, who are these angel investors?

We can't disclose the names on TV. However, they are three guys,

they've each spent 30 years

in the food and warehouse and logistics industry

as CEOs, chairmen of listed food companies -

of the largest companies in this country.

You're saying you can't say who they are?

Mm-hm.

If you're going to have a chance of getting me as an investor,

you're going to have to disclose who these people are.

Because...

I wouldn't want to get involved in a business where

I don't know the other partners.

Is that something we could...? We'd like to ask their permission.

You're not on Who Wants To Be A Millionaire, you can't phone a friend.

-Is it on the term sheet?

-Yes, it is.

-Read the term sheet, Peter.

-Is it on the term sheet?

-Yes.

-I'll have the term sheet then.

Are you glad the clever Dragon's here to help you out, Peter?

Oh, be quiet, Granddad.

HE LAUGHS

Mm, guys, you've done really well.

An unexpected reaction from Peter Jones,

who seems impressed by the calibre of their angel investors.

But has Piers Linney smelt a rat

about the motives of the entrepreneurs

for coming into the Den in the first place?

Why are you here?

Really? Why are you really, really here?

You guys... I know you guys, I know where you're coming from.

You can raise 250, 350, 500, probably, through those guys.

Or, if they like you, their mates.

You know, it's not a stretch.

Are you here because it's the PR value of it?

I'm just trying to understand, because...

Two reasons. Number one is on the cash side.

At the moment, it is a highly cash intense business.

JAMES: The other thing which we really value from you

is on the marketing side and also,

it's always good to have another strategic voice in any...

Well, whenever we're making any strategic decisions.

I still don't think you've got anything like enough cash.

I will be staggered if you're not looking at millions, not £250,000.

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

Thank you.

I think you're both great.

Anything to do with organic delivering, you know,

the packaging is great.

But I think that people like change.

There's so many new brands and things happening and I think

it's human nature that people don't want the same thing all the time.

-Mm-hm.

-I think you will haemorrhage money,

and £100,000 from one of us and then 250 from your angels...

I think you should take stock

and think about where you are.

It's just not something that I would invest in.

I'm sorry, but I'm out.

Thank you.

I really like this.

But I think you've come through the door with a shopping basket

with too many things complicating this.

I'm afraid I'm also out.

Concerns over cash flow and Gousto's company structure

have led to three Dragons turning down the offer to invest.

Now, Peter Jones wants to find out if the deal struck

with their angel investors leaves any room for manoeuvre.

What happens if I get

a really good negotiating position in the Den, here,

and then when we walk out, the investors turn round and say,

"That Peter Jones - you've given away all of that?

-"I want the same deal."

-Mm-hm.

-What happens?

Well, I guess, because...

We have that deal on the table, we are...

There's not much room for us

to negotiate outside of that term sheet, because we wouldn't

want to jeopardise the deal which we already have.

Well, you've just made my decision then.

Erm...

Which is really, really disappointing...

..because I think you've missed a trick by making that statement.

Angel investors are a group of individuals that look

at businesses and put money into it in the hope,

in the whim of fancy, that maybe one day they'll make some money.

I'd like to think of myself as very different.

I'd like to think that I'm a very serious investor

that gets involved in every business.

I don't sit on the sidelines. I make a real difference in the company.

Then you bring the marketing and PR,

and bang - it doesn't get better than a Dragon.

So, to tell me that I'm going to be at the same level

as some very wealthy angel investor that, frankly,

will play no part in your business...

doesn't do it for me.

Can we discuss quickly?

You can go to the back, near the lift, and have a chat.

-Yeah?

-Can we discuss?

TIMO: Mm-hm.

THEY WHISPER

Could we ask, if you would like to make an offer,

what level would be satisfactory to you?

Well, I'd like...

You went to the back of the room to think about the dilemma

that I gave you, which was,

if I was to get an offer today that was a lot richer,

in terms of equity, than the investment that you've been

offered through this angel network, would the angel network walk away?

We probably can't agree to a deal that is a lot richer.

Guys, I think that what you've created is potentially great

and I think you've been very open about your angel investment network

and I think it would shut the door to future funding.

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

- Mm-hm. OK, thanks. - Thank you.

A perturbed Peter Jones walks away from the deal.

It leaves Duncan Bannatyne as the last Dragon standing.

I really love this.

I think it's absolutely fantastic.

I'm going to become a customer.

-That's good.

-I'm going to buy your products,

and when I go in the summer with my lad

to my cabin in Lake Windermere,

I'm going to have your boxes delivered

-and we're going to sit and cook together.

-Mm-hm.

And it's going to be fantastic. I love it. It's fantastic.

Unfortunately, I don't think you'll ever make any money.

I can't see it ever coming into profit.

So for that reason I've got to say, I'm sorry, but I'm out.

OK. Thanks.

Despite the Dragons' enthusiasm for Gousto,

a combination of their monthly losses and a rigid arrangement with

other investors means that Timo and James walk away with nothing.

I think we're just too...

..hamstrung by what we've already negotiated.

Mm.

It's been a trying...

-Mm!

-..and frustrating day for the Dragons so far.

I've got to be honest, I hate what you've got.

No investments have been made in the Den today.

I'm out.

But two more pitches remain.

Is there much wiggle-room in that?

No.

Will these hopefuls succeed where others have failed?

-You have no idea how close he is to getting money out of me.

-OK.

The games industry is booming.

But, despite a wealth of new technology,

the humble board game still holds its own in a crowded market.

This trio, who met while working at an advertising agency,

have come up with a new game

that they hope will be the next big thing this Christmas.

Let's see if it will be snakes or ladders for the admen.

Hello, Dragons.

-My name's Dean, and this is Tris and Ben.

-Hi.

And we're here today to ask for £50,000 for 10% equity

in our game company, Linkee Limited.

Now, you know with board games sometimes they come in big, massive

boxes with loads of fiddly bits, they have long,

complicated rules that go on for ever,

you find yourself waiting ages for your turn?

Well, we've come up with a way to get round all that

with our super-simple, shouty-outy family quiz game

that went down an absolute storm when we launched last year.

Yeah, it really has been an incredible six months since we launched.

We sold 2,000 games before Christmas,

we've had phenomenal feedback from retailers and customers.

We've partnered with a TV production company

to create a TV version of the game,

and we're working with an app developer

to create a mobile version of the game, too.

We've been up to all sorts, we'd love to tell you about it all,

but the best way to really understand why

we think this is a really special game is to play it. Ben.

OK, Dragons, here's how it works.

On this giant card, there are four questions

and the aim of the game is to guess the common link

between the four answers.

So, I'll give you an example.

If the answers were John, Paul, George and Ringo,

the link would be The Beatles.

So, let's give this one a go.

You can just shout out at any time, it's a bit of a free-for-all.

I can see you're keen.

OK, so question one -

Emperor and King are types of what flightless bird?

-Penguin.

-Penguin.

-Yep. Off to a flying start.

Question two...

Books. Books?

-Ooh, close!

-Do I have to go back to the beginning now?

SHE LAUGHS

I'll keep going, you're very keen.

Question two...

Club and Rocky.

Yeah, and the link is...?

I've no idea.

So, we've got penguin, we've got taxi.

Question three - what type of sandwich is typically made

with three layers of bread?

-BLT.

-Club.

So, penguin, taxi and club.

Can you see a link?

-No.

-And Rocky...

-Penguin, taxi and club...

-Very nice with a cup of tea.

-Biscuit.

-Oh, penguin biscuits!

-Yes!

That was a really good guess. I think Duncan had it.

That really is the game. That's how simple it is.

It takes two minutes to learn, 30 minutes to play,

it's got something which we call "anti-genius",

which means you don't have to know everything on the card or be

the smartest person in the room, so it's very, very inclusive.

Dragons, we're really proud of what we've achieved in just six months,

with not a whole lot of dosh, and we really think that with your

backing and support we can help Linkee to realise its full potential.

Thank you for your time. Thank you for playing along.

I'll give you a copy of the game to look at,

then we'll be happy to answer any questions.

A stand-out performance from the three entrepreneurs

whose experience in advertising

has helped them deliver a finely-tuned pitch.

They're looking for £50,000

for a 10% stake in their Linkee board game.

Kelly Hoppen is the first to take a turn.

You're a great salesman, cos I actually hate board games

but I'd quite like to play another card!

Where's the board?

-There is no board.

-I'm being picky because we're calling it a board game.

-But it's a quiz.

-Yeah, we started off with all those and just thought

we can get rid of all those bits and bobs.

BEN: The thing that people love is

that "eureka" moment, when they're answering the four questions and they go,

"Oh, yeah, I've got the link."

We don't really need anything more than that

because that's the sort of the kernel,

the heart of the idea that people really like.

And what's the TV thing that you talked about?

It, kind of, just happened that a TV producer came across Linkee

and approached us, and said,

"Have you thought about turning this into a TV Show?"

And we were like, we kind of had

but it was very early days to be thinking as far ahead as that.

And how far down the line...?

Have they said they've got it produced, or...?

At the moment, we're just approaching the broadcaster.

Yeah, we've got the treatment written up,

we're approaching broadcasters and that's where we are at the moment.

It's all gone a bit bonkers in the last few months.

Tris, Dean and Ben have thrown a six.

Kelly Hoppen certainly seems to have changed her view of board games.

But can the London-based entrepreneurs convince another key player?

You've described, in your opening pitch,

something that sounded amazing.

You've thought of a product, everybody wants it,

you've sold thousands,

you've now even got a television production company working up the title.

And you made me feel, for the first time,

that I needed to come up with something like,

"Hi, I'm Peter Jones, please take my £50,000."

Is that a good thing?

Well, I don't know, because you made it sound fantastic,

which made me feel that you've really, really oversold it.

And I can put a finger in the air and say,

I almost guarantee that you haven't even made £10,000.

THEY TALK OVER EACH OTHER

Take us through the numbers.

Sales so far, to date, was 2,000. What's the revenue?

The revenue on that was £32,000.

-32,000?

-Yep.

-And what was the profit?

The gross profit was £13,000.

-13,000 gross profit?

-Yep. With £6,000 on that.

-So, I'm right?

-Yeah.

You are right.

We were stood in the lift just there,

and we only got the product six months ago from the printers

and we were stood there going,

"Wow." A lot of things have happened very quickly.

It's surprised us, actually.

We've been bowled over by how quickly things have come along.

I'd rather be bowled over with...

the profits you were making.

-Yeah.

-But there isn't any, is there?

That's the problem.

What's your turnover, so far, this year?

Erm, it's about £2,500.

The entrepreneurs are finding it difficult to convert the froth

of a great pitch into the hard numbers that impress the Dragons.

And Peter Jones has something to reveal in his business history

that could mean it's game over for him.

I brought out a board game called Big Business two years ago

and we sold 15,000 in ten days.

I would say that was very successful, wouldn't you?

Yeah. Definitely.

Well, if I tell you that we didn't make any money...

This is very, very tough, this area.

And the TV one is...

You are delusional if you think this will go on to a television element,

cos the reality is, it's not just tough,

it's got to be really, really something special.

And even Paul Smith spent many, many years

trying to get Who Wants To Be A Millionaire away.

And he had a cracking concept, everybody was talking about it

and he still couldn't get it commissioned.

This is not an investment for a Dragon,

let alone this one sitting here.

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

A blow for the admen.

And Peter Jones's exit from the deal has unnerved Kelly Hoppen.

Guys, sitting here and listening to Peter,

he obviously came up with a great idea but it didn't make money.

I'm not somebody that knows an awful lot about board games

but I get what you're saying about people wanting something

that's tangible, sitting, you know, I've got kids.

But I just... It's not something that I would invest in,

even though I really want to.

I'm sitting here thinking, "Come on, Kelly. Come on, do it."

I'm sorry, I'm out.

- Thank you. - Thank you.

Dean, um...

To me, in terms of investing, especially 50k for 10% -

that's a valuation of half a million.

You've got to sell this business for two and half million to five million

to make the kind of return you'd be looking for, as a Dragon.

And I just can't see it happening.

You've heard from Peter who's been in this game and, you know,

he didn't make a huge amount of money.

So, you have to listen to that.

For those reasons, I'm afraid, great to meet you guys, but I'm out.

Guys, let me tell you where I am.

This is an area that I actually generally choose not to invest in,

because it is tough.

And even businesses that are out there saying they have done

brilliantly, you look at their accounts, they haven't made money.

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

The dominoes are falling.

Four Dragons are out, leaving just one remaining,

Duncan Bannatyne, who was sceptical of Linkee's profits.

So, is he ready to roll the dice?

It's very tempting.

But...the big killer's the price.

Our price?

Yeah.

£50,000 for 10%.

I wouldn't give you £50,000 for 10%.

So, what's your best price?

Best percentage?

What...

What's the best deal you can offer me?

I think 15%. That would be the top.

I was thinking 40.

DEAN CHUCKLES

40%?

Is there much wiggle-room in that, or is that..?

-No.

-No wiggle-room?

-No wiggle-room.

£50,000 - 40%.

-That's... That's a lot, lot more than we thought.

-Sure.

-Am I sure that I don't want to do that?

-Mm.

Guys? I'm pretty sure.

I think so, yeah. Do you think that's fair, 40%?

Yeah.

I could lose my money.

Very easily.

It might not sell.

-It is selling, though. It's popular.

-It's not selling in big quantities.

People are getting excited about it.

How could you help us accelerate our growth?

Rather than just the cash that we obviously need to...

-Yeah, I'm not convinced I could.

-OK.

You said you need the money, I've offered you the money -

£50,000 for 40%.

OK.

Erm, guys, I think I speak for all of us,

I'm afraid we won't accept that offer.

OK. Well, I wish you the best of luck.

-I hope you do well with it, but I'm out.

-Thank you.

-Good luck.

So, it's no deal for the ad men. Or are they mad men,

as they reject an offer of investment from Duncan Bannatyne?

-I really, really wanted to invest in them.

-Yeah.

-Am I missing something?

It was a fair offer, wasn't it?

I think it was a clever offer.

They would never have taken it.

The point, perhaps, where the pitch didn't go quite how we wanted

was when Peter was talking about the fact that his own personal

experience of board games didn't go quite as well as he wanted it to.

So...

His board game couldn't have been that good.

If it was that good, why isn't it still on sale?

Many entrepreneurs enter the Den putting an ambitious

valuation on their company.

But this can be a high-risk strategy -

whether it's an innovative alternative to paper...

I'm here to raise £200,000 for 10% share of my company.

This paper is made from stone

and the entire production takes 50% less energy...

And, above all, this paper is waterproof.

..or a cuddly toy for a child's scooter.

I knocked up the first Hobby Headz on my sewing machine.

I realised that I'd come up with quite a magical product which

I could turn into a business venture.

I'm looking for £100,000 worth of investment for a 10% stake

in my business.

With high valuations for fledgling companies,

the Dragons can't help but pile on the pressure.

Why do you need £200,000?

First of all, I need to buy more stock.

Have you got orders, then?

No, it's up-and-coming.

-How much are you turning over at the moment?

-Uh...

Not much, we just really started trading.

Why do you have to buy stock when you don't know what stock you need?

How much have you spent so far?

We've spent about £200,000.

-What?!

-Yes. Yes, we have.

You've spent £200,000 on this?

You should have had a lot of orders

if this is something that somebody wanted to buy.

And trial and error with your own money's one thing,

but with mine, it's slightly worrying.

And when it comes to confrontation with the Dragons,

a high figure can provoke their fury.

-So, it's just a toy?

-It's just a toy.

-It's just THAT you value at £1 million?

-Yeah.

Over the last six months, I've had a lot of interest

and I've already garnered an agreement

with a multinational supermarket.

When you come in with such a racy valuation,

you immediately get my heckles up.

I don't want to get annoyed, but I'm already...inside.

Honestly, there's boiling point.

I am looking for someone that will invest,

recognising the potential of this venture.

The valuation is off the charts.

At no level of equity can I make you an offer.

-I'm out.

-I'm out.

-Thank you.

And once you've lost the Dragons' respect, it's gone for good.

There's some naivety there that makes you,

sort of, not as credible as you might think you are.

The valuation's wrong, so for that reason, I'm afraid I'm out.

Now, the British population is ageing and, sadly,

this means that cases of dementia are on the rise.

800,000 people are suffering from the condition in Britain.

So, it's encouraging to see entrepreneurs

putting their minds to the challenges this creates.

A good example is Richard Ernest, who's next into the Den.

Hello. My name's Richard

and I'm here today to talk about my company, called RemPods.

I'm looking for an investment of 100K for an equity of 25%.

My company create products for people with dementia.

Our main product is our product here,

which is basically called a pop-up reminiscence pod.

So, we sell a complete package like this to the NHS

and to care homes across the UK.

People with dementia, their short-term memory goes very quickly,

so they are, kind of, left with their long-term memories.

So, what I created was a safe haven -

a place for people to come and just reminisce.

I've been going for two years now, I'm in 30 NHS trusts and also sell to

the Alzheimer's Society, to care homes and charities across the UK.

Any feedback and questions would be great. Thanks for listening.

A short, and nervous, pitch by Richard Ernest,

who's looking for £100,000,

for a 25% stake in his dementia therapy business.

Piers Linney is the first to question the reminiscence man.

-Richard, hi. I'm Piers.

-Hello, Piers.

What's the science behind this?

Is this based on you noticing people wanted this

or is there some science behind it?

Do you know, I mean, the power of reminiscence has been around for 20 years.

It's not a new concept, so...

We had a gentleman in an NHS hospital in Bristol

and every evening, that guy would be going crazy with his hands

and no-one knew why.

And all they would do is just give him anti-psychotic drugs.

He worked in the pod, and they just kind of spoke to him,

using it as a form of therapy,

and they realised he used to own a shop,

so at five o'clock every day he was counting his money.

So then, they gave him Monopoly money

and it was a way of not having to give him anti-psychotic drugs.

So, I'm saving the NHS tons of money on anti-psychotic drugs...

How can you prove you're saving the NHS money on anti-psychotic drugs?

Can you show me the evidence?

Well, I can't today, but no-one would order from me if it didn't work.

Yeah, but because it works and calms a patient down

and gives a patient a bit of a better life doesn't mean they're

saving thousands and thousands of pounds on anti-psychotic drugs.

-That's a bit different.

-Well, it saves more money than...

-Until you said that, I was 100% behind you.

-OK.

-I just don't believe that.

-OK.

Richard has failed to convince Duncan Bannatyne

about the potential of this pod

to help reduce the amount the NHS spends on treating patients with dementia.

And now Piers Linney has concerns about the entrepreneur's credibility.

You can't quite cross that line between - is this a nice-to-have

or is it a real medical return-on-investment for the NHS?

It's a bit airy-fairy to me.

And you are a bit, to be honest with you.

I want you to cross that line from where you are to hard facts.

To have any chance of getting any money out of anybody here, in my view.

-You have no idea how close he is to getting money out of me.

-OK.

Erm, all of the conversations that you've put across -

and I'm sitting here intently listening to you -

I'm only thinking philanthropically, in a social-enterprise way.

And I think there's a really, really fine line

between commercially making a lot of money out of it,

or whether there's something more important you've got here

about making people's lives better,

and, therefore, would make me feel

very uncomfortable about you wanting to become a millionaire

on the back of doing this.

I don't want to come across that I'm on a crusade,

because I want to make money. I want to have...

Well, that's what my next question is - what does Richard want?

I... I want to make money.

It's certainly a clear response from the Gloucestershire-based entrepreneur.

Will it be enough to convince a sceptical Duncan Bannatyne?

I don't think it's worth £100,000.

Even if I was to offer you £100,000 for 100%.

It has a value, but it's not a business.

And so for that reason, I've got to say, I'm sorry, but I'm out.

Richard, I'm really struggling with this, because I love the idea.

Erm, and I'm not quite sure why I'm struggling with it.

I keep going backwards and forwards.

Yeah, no, I'm sorry, but I'm out.

It's not something I want to invest in but I really wish you luck.

Oh, thank you. Thank you.

I know maybe I've come across airy-fairy,

but I set this up in my first year

and I've worked really hard.

It's taken me a long time to realise that, if you work hard,

you can get anything, and I won't finish with this.

I believe in this.

And I will take this to the next level, you know.

A desperate appeal from the heart.

But will it wash with any of the remaining Dragons?

I haven't really found anything in your story

that's told me that the experts have thought,

"Oh, we've got something here."

The biggest issue I have, is that you and I

have a very different value placed on your current business,

as it is at the moment.

But...

-I am going to make you an offer.

-OK.

And I'm going to offer you all of the money...

..and I want 45% of business.

Against the run of play and with no interrogation of his figures,

Deborah Meaden's surprising offer

puts the remaining Dragons on the back foot.

But Peter Jones is still wrestling with a moral dilemma.

I'd... I'm happy to say where I am.

I... I'm... I am struggling.

And I am up and down about this point.

I don't know. I don't think I'd feel overly comfortable

about making huge profits

off the back of helping people with dementia.

I wouldn't want that to buy you a nice house and me another car.

Yeah. I mean, I wouldn't be going crazy.

OK. Well, I've... I think you know where I am.

I've made my mind up, erm,

and I'm going to make you an offer.

Oh. OK.

But my offer is subject to...

..this business giving up to 10% of its profits

back to charity.

On an annual basis.

Forever.

And I will offer you £100,000...

..and I would want...

35%.

An unusual offer from Peter Jones

who wants philanthropy to go hand-in-hand with profits.

Now, it's left to Piers Linney to decide.

I don't have that problem. I think you can create a very successful business

that makes money, improves the lives of particular patients,

reduces the costs of the drugs in the NHS, that has the social impact.

So, I haven't got a problem with that, personally.

Why don't you make a better offer, then?

The issue is, I don't think I can.

-Chicken.

-DUNCAN BANNATYNE:

-Are you out, then?

No, I'm thinking about it.

So, you either need to make an offer or you need to go out.

Yeah, I'm out.

OK, thank you. Thank you.

With two offers on the table,

a now more confident Richard wants to negotiate with Deborah Meaden.

Would there be any leeway,

or maybe if we reached targets you could go down to 40%

after a certain time, or...?

Erm...

We didn't go forward on your business forecast, did we?

Yeah, so this year,

I'm hoping to do 660,000 turnover

of a net profit of 237.

And the year after?

The year after, I'm hoping to get up to a million,

with a net profit of about 600K, I think.

And then, the year after that, about 2.3 million,

with a net profit of just under a million, so about 950K.

And you're saying, at the end of that period,

if you hit those targets, would I hand back 5%?

-Yep.

-You would. OK.

-COUGHING

-I'm choking!

I'm only choking because you never mentioned you were going to make

nearly a £1 million profit in year five.

I wouldn't have mentioned charity if you'd told me that at the start!

LAUGH UPROARIOUSLY

"Can we start again, please?"

PETER COUGHING THE OTHERS LAUGHING

You've really killed me now!

THEY LAUGH

You were talking about making 20, 30K!

Oh, dear me. Oh, that's funny.

Is there... I suppose it's confusing.

There's no way of you two coming together?

To be honest with you, Peter, I would love to work with Peter,

but I guess my issue with it is if I want the cash to go to the charity.

We, anyway, could agree, couldn't we?

-Are you happy with that?

-Yeah, I am.

OK, yeah. I'll accept, yeah.

-Oh, excellent!

-You're accepting our joint offers.

-Yeah, yeah.

-It'd be great, yeah.

-Great!

-Excellent! We have a deal!

-Well done!

-You are very sweaty.

THEY LAUGH

Richard Ernest accepted an offer of £50,000

from both Peter Jones and Deborah Meaden

for a 22.5% stake each,

with an incentive to claw back equity

if he hits his profit targets.

See you later. Thank you, bye.

-PETER:

-You can be a bit more excited.

THEY LAUGH

He's also committed to donating money to charity.

I was really pleased that you went in at 45%.

That was a good piece of negotiation.

I left school with nothing.

So, at the age of 20, I didn't even know the ABC.

So, I've had a life of always trying to prove people wrong.

I've never felt good enough.

And I just feel this is, kind of... It hasn't sunk in.

But it's, kind of, I've finally done it.

And I feel this is going to secure my future.

So, after a day of curious business ideas, eclectic entrepreneurs,

and one near miss,

finally, an investment from the Dragons.

And for a delighted Richard Ernest with his novel remembrance pods,

relief and hope for the future.

If you want to join in the conversation about tonight's pitches,

you can do so on Twitter...

Next week in the Den...

Your attitude is so unengaging.

It's not only the product, but it's about the person.

Whatever you've invented here isn't a business.

I'm looking to invest, not generate a legacy

for those that come after me.

I'm not convinced you need anybody's help.

I think we do!

I'm losing the will to live.

-Me, too.

-It's not so bad!

How would we work together?

We would kill each other.

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