0:00:07 > 0:00:08Wealthy...
0:00:12 > 0:00:13..astute...
0:00:13 > 0:00:15innovative...
0:00:18 > 0:00:19..fearless...
0:00:19 > 0:00:20and shrewd.
0:00:23 > 0:00:25These are the Dragons.
0:00:30 > 0:00:32The heat is on in the Den.
0:00:33 > 0:00:36Together with formidable business giants Peter Jones
0:00:36 > 0:00:38and Deborah Meaden are...
0:00:39 > 0:00:43..global fashion tycoon with over 40 years' retail experience,
0:00:43 > 0:00:44Touker Suleyman...
0:00:45 > 0:00:48The woman who turned her passion for food and drink
0:00:48 > 0:00:52into a multi-million pound business empire, Sarah Willingham...
0:00:53 > 0:00:56..and the man who sold his online greetings card business
0:00:56 > 0:00:59for £120 million, Nick Jenkins.
0:01:02 > 0:01:06For entrepreneurs, it's the toughest business pitch of their lives.
0:01:07 > 0:01:10Do they have what it takes to face the Dragons?
0:01:16 > 0:01:19Welcome back to Dragons' Den, where, once again,
0:01:19 > 0:01:24the doors are open to entrepreneurs desperate to secure a cash injection
0:01:24 > 0:01:27from a multimillionaire Dragon investor.
0:01:27 > 0:01:29Coming up on tonight's show...
0:01:32 > 0:01:34Bring those feet wide. Sit back.
0:01:34 > 0:01:37This is the only thing that you have.
0:01:37 > 0:01:39This is a worthless piece of paper.
0:01:40 > 0:01:43- LAUGHTER - You look like Harry Hill trying to get fit in the living room!
0:01:43 > 0:01:44DEBORAH LAUGHS
0:01:44 > 0:01:46Unless you've got the IP,
0:01:46 > 0:01:49everyone is just going to sit here and rip you apart.
0:01:49 > 0:01:52It's a bit like inventing a smoke alarm with a snooze button.
0:01:53 > 0:01:55There's not really any point.
0:01:55 > 0:01:58You said Zumba is limited to its limited pool
0:01:58 > 0:02:01of only 100,000 instructors - that's peanuts compared with
0:02:01 > 0:02:04how many instructors you've got on your books, isn't it?
0:02:04 > 0:02:08I'm going to make you an offer, and it is for all of the money,
0:02:08 > 0:02:10on the terms that you have asked for,
0:02:10 > 0:02:12because I think it would be kind of rude not to.
0:02:17 > 0:02:19First into the Den is Caner Veli.
0:02:19 > 0:02:22He's a former financier from the City who's hoping
0:02:22 > 0:02:26that entrepreneurial success is all in the name.
0:02:31 > 0:02:35Caner is spelt C-A-N-E-R. It's Turkish, in fact.
0:02:36 > 0:02:39It means "full of life", so I'm trying to
0:02:39 > 0:02:42maximise it as much as I can.
0:02:43 > 0:02:47From my research, Touker is a good man, he's Turkish Cypriot,
0:02:47 > 0:02:51so hopefully we could have a good chat over a Turkish coffee one time.
0:02:53 > 0:02:55It could...go very well, actually.
0:03:02 > 0:03:03Hello, everyone.
0:03:03 > 0:03:07My name's Caner Veli, and I'm the founder of Liquiproof.
0:03:07 > 0:03:14I'm here today to seek £100,000 in return for 5% of my business.
0:03:14 > 0:03:17Liquiproof produces advanced nanotech coatings
0:03:17 > 0:03:19for almost any surface.
0:03:19 > 0:03:22We're best known for our innovative
0:03:22 > 0:03:24and award-winning footwear protection.
0:03:24 > 0:03:29It is invisible, eco-friendly, non-toxic, non-hazardous,
0:03:29 > 0:03:31non-flammable and odourless.
0:03:32 > 0:03:35Let me show you how amazing it is.
0:03:37 > 0:03:39WATER TRICKLES
0:03:41 > 0:03:46Liquiproof will not affect the look, feel or breathability,
0:03:46 > 0:03:48and as you can see...
0:03:49 > 0:03:54..liquids simply bead up and roll off.
0:03:56 > 0:03:58Even on this suede shoe.
0:04:02 > 0:04:07So we recently launched a range of fabric coatings which are suitable
0:04:07 > 0:04:12for larger garments, such as suits, jackets, hats,
0:04:12 > 0:04:15carpets, upholstery.
0:04:15 > 0:04:21Together, we can make Liquiproof a household name.
0:04:21 > 0:04:24THE DRAGONS CHUCKLE
0:04:24 > 0:04:25Thank you.
0:04:25 > 0:04:27That's brilliant.
0:04:30 > 0:04:34Londoner Caner Veli is looking for £100,000
0:04:34 > 0:04:36for just 5% of his business.
0:04:36 > 0:04:39The pitch may have been worthy of Dragon applause,
0:04:39 > 0:04:42but with a company valuation of £2 million,
0:04:42 > 0:04:45he'll need to prove his business is watertight.
0:04:47 > 0:04:51Touker Suleyman wants to know if they're speaking the same language.
0:04:54 > 0:04:58- Caner Veli, right? - Merhaba.- Merhaba.
0:04:58 > 0:04:59- Sen Turk musum?- Nasilsin.
0:05:00 > 0:05:03- Are you Turkish? - Yeah, my father's Turkish Cypriot.
0:05:03 > 0:05:04- Turkish Cypriot?- Yeah.
0:05:04 > 0:05:06Oh, I'm Turkish Cypriot.
0:05:06 > 0:05:08OK. What's your background?
0:05:08 > 0:05:11- I studied pharmaceutical science when I was at university.- Right.
0:05:11 > 0:05:13Went on to sales, business development,
0:05:13 > 0:05:15and then exactly prior to this, I was a head-hunter in the City,
0:05:15 > 0:05:17in the insurance district.
0:05:17 > 0:05:19And I...
0:05:19 > 0:05:21er...fairly clumsy...
0:05:21 > 0:05:25so go to lunch and have a couple of glasses of wine,
0:05:25 > 0:05:27inevitably would go down my tie,
0:05:27 > 0:05:31or even walking from a meeting, I'd get caught in the English weather,
0:05:31 > 0:05:34so ruin my suede shoes, so I started the business from there.
0:05:36 > 0:05:38What patent do you have for this?
0:05:38 > 0:05:44So, personally, myself, I've partnered with the R&D lab
0:05:44 > 0:05:49that owns the patent to this, so I have sole exclusive rights
0:05:49 > 0:05:52for the use of this technology within a number of markets.
0:05:52 > 0:05:54So this is not your technology,
0:05:54 > 0:05:57you've just got the contract with these people.
0:05:57 > 0:06:01- Correct, yes, partnership.- What happens if tomorrow they take this
0:06:01 > 0:06:05and go to somebody else that's going to really take it worldwide,
0:06:05 > 0:06:08and you're a small guy and you're squeezed out?
0:06:09 > 0:06:12Well, then, that's...you know, bad business. We've got a partnership,
0:06:12 > 0:06:16so it's something where I've built the relationship with the supplier.
0:06:16 > 0:06:19- So you're asking us to buy into that relationship.- Yeah.
0:06:19 > 0:06:21We've never met them, we don't know them.
0:06:21 > 0:06:23Unless you've got the IP,
0:06:23 > 0:06:26everyone is just going to sit here and rip you apart.
0:06:27 > 0:06:30The IP for this is the brand.
0:06:30 > 0:06:32We've already won awards, we're doing very well.
0:06:32 > 0:06:35So YOU'VE come up with the name Liquiproof.
0:06:35 > 0:06:37That's mine, it's a worldwide trademark.
0:06:37 > 0:06:39I own everything to do with Liquiproof.
0:06:39 > 0:06:42- Apart from the contents in it. - Correct.
0:06:44 > 0:06:48- Have you got your contract here?- The contract is...is always evolving.
0:06:48 > 0:06:51We can...tweak it and change.
0:06:51 > 0:06:54So who would like to have a look at this first?
0:06:57 > 0:07:01It started out so well, but the revelation that Caner doesn't own
0:07:01 > 0:07:04the intellectual property on the product
0:07:04 > 0:07:07has tarnished a so-far squeaky-clean presentation.
0:07:07 > 0:07:12And now, Peter Jones wants to take the entrepreneur to task
0:07:12 > 0:07:14over the company's price tag.
0:07:16 > 0:07:18Caner, you've put quite a big valuation on the business,
0:07:18 > 0:07:22- £2 million.- Correct.- Um... Just give me your thought process with that...
0:07:22 > 0:07:27- OK.- ..when you don't own the proprietary IP to the product.
0:07:27 > 0:07:30- That's a good question, um... - Thank you.
0:07:30 > 0:07:34So the way I see that is that we make money,
0:07:34 > 0:07:37we supply businesses, we can continue to make money.
0:07:37 > 0:07:40And how much money have you made to date?
0:07:40 > 0:07:45You want... OK, so, year one we turned over 96K,
0:07:45 > 0:07:49gross of 53,500 and net of 35,500.
0:07:49 > 0:07:55The year to date, which is seven months, 213,000 turnover,
0:07:55 > 0:07:58gross of 140-odd.
0:08:00 > 0:08:01I went on 10 times.
0:08:01 > 0:08:06- 10 times revenue is your valuation? - As we...stand today, but backed up
0:08:06 > 0:08:10with the fact that we've got a high growth potential going forward.
0:08:10 > 0:08:14Give me one example of any company since you were born
0:08:14 > 0:08:17that you've heard of that has sold for 10 times revenue.
0:08:17 > 0:08:22OK, I know WhatsApp sold for 30 billion with zero revenue.
0:08:22 > 0:08:23TOUKER LAUGHS
0:08:23 > 0:08:28And what's the difference between WhatsApp and your product?
0:08:28 > 0:08:32They had a large database of potential customers.
0:08:32 > 0:08:34Was that over 100 million?
0:08:34 > 0:08:35Yeah.
0:08:37 > 0:08:39- How many customers have you got? - Oh...
0:08:40 > 0:08:43- Not...not a million!- No.
0:08:44 > 0:08:49This business is no question worth even several hundred thousand pounds.
0:08:49 > 0:08:52- OK. - So I'm going to say that I'm out.
0:08:55 > 0:08:59A racy valuation that can't be backed up by profit.
0:08:59 > 0:09:03Caner's financial revelations have led to an irritated Peter Jones
0:09:03 > 0:09:05declining the deal.
0:09:06 > 0:09:10And it doesn't look like his paperwork holds any answers
0:09:10 > 0:09:12to the £2 million question either.
0:09:14 > 0:09:16It's not a licensing agreement -
0:09:16 > 0:09:18it's a distribution agreement, really,
0:09:18 > 0:09:21that's giving you distribution in certain territories,
0:09:21 > 0:09:25which is worldwide for most things - military dress uniform is UK only,
0:09:25 > 0:09:29and specifically for footwear, military dress, hat industry.
0:09:29 > 0:09:31But how they would overcome that
0:09:31 > 0:09:34is they don't supply you with the goods for a month.
0:09:36 > 0:09:39You can't force them to supply you, they just say...
0:09:39 > 0:09:43Actually, under my understanding of distribution law,
0:09:43 > 0:09:45er...you can't just suddenly stop supplying.
0:09:45 > 0:09:49They can come up with all the reasons in the world. "Sorry, my machine's broken, I'm not..."
0:09:49 > 0:09:52But they have to give us... they have to give me notice.
0:09:52 > 0:09:55Well, you've got 20 days, you're right, you've got 20 days.
0:09:55 > 0:09:58I mean, how would... How would you...work with that, sort of...
0:09:58 > 0:10:00Well, you'd have a proper distribution licence.
0:10:00 > 0:10:03We can...we can work it out.
0:10:03 > 0:10:05Did a lawyer write this?
0:10:05 > 0:10:08- I...put the majority of that together personally.- OK.
0:10:08 > 0:10:12And I had it sort of glanced over by a family friend who doesn't...
0:10:12 > 0:10:15That's not their expertise, and the right wording...
0:10:15 > 0:10:20And diligence clearly not being one, noting that there are three parties at the top of this agreement -
0:10:20 > 0:10:24you've got three parties in the middle, and you've only got two at the bottom.
0:10:24 > 0:10:27If you're going to ask for a two million valuation,
0:10:27 > 0:10:30spend a couple of grand on your contract.
0:10:30 > 0:10:31Lawyers exist for a reason.
0:10:31 > 0:10:34This is the only thing that you have, it's the only thing.
0:10:34 > 0:10:36And that's something that I...want to...
0:10:36 > 0:10:40Taking your point across, I knew that was something that needed to be looked at.
0:10:40 > 0:10:43This is a worthless piece of paper, it really is.
0:10:43 > 0:10:47What you are is a salesman of a really funky liquid,
0:10:47 > 0:10:49but this isn't a business, um...
0:10:49 > 0:10:52Next time you do this, do it properly. I'm afraid I'm out.
0:10:55 > 0:10:59Nick Jenkins proves that cutting corners in business
0:10:59 > 0:11:01won't win investment in the Den.
0:11:01 > 0:11:05And after such an impressive pitch,
0:11:05 > 0:11:08Sarah Willingham is now feeling a little short-changed.
0:11:10 > 0:11:17Caner, I have to say, your demonstration at the top of this pitch was absolutely brilliant.
0:11:18 > 0:11:20When you stood there and poured a bottle of red wine over you...
0:11:20 > 0:11:23It was the first pitch I've clapped at, anyway.
0:11:23 > 0:11:25I mean, it was great!
0:11:25 > 0:11:27You've got such a great product,
0:11:27 > 0:11:31- I think you would have had us queueing up. Honestly, I really, really do.- Yeah.
0:11:31 > 0:11:35But unfortunately, you don't really have a business.
0:11:36 > 0:11:37I'm out.
0:11:42 > 0:11:45There's two fatal errors you've made here.
0:11:45 > 0:11:46One is the contract.
0:11:48 > 0:11:51But secondly, your valuation is...
0:11:51 > 0:11:54off the scale.
0:11:54 > 0:11:57OK, so the valuation was based on where we're going with this business.
0:11:57 > 0:12:01Yeah, but it doesn't go anywhere without that.
0:12:01 > 0:12:03- I understand, but I'm... - That agreement there is
0:12:03 > 0:12:06the thing that will place the value on your business.
0:12:06 > 0:12:11That piece of paper you made up, and you're saying it's worth £2 million.
0:12:11 > 0:12:13You made it up!
0:12:15 > 0:12:16I'm out.
0:12:19 > 0:12:23An incredulous Deborah Meaden makes it four Dragons down.
0:12:24 > 0:12:27Caner's only hope lies with the global fashion magnate,
0:12:27 > 0:12:28Touker Suleyman.
0:12:30 > 0:12:37How will he feel about stumping up £100,000 for just 5% of the company?
0:12:37 > 0:12:39- I sell a lot of shirts...- Yeah.
0:12:39 > 0:12:43..to a lot of people in this country and worldwide, suits, the same.
0:12:44 > 0:12:49Have you ever worked out what it would cost a metre of fabric
0:12:49 > 0:12:52- to have this coating on a metre of fabric?- Yes.
0:12:52 > 0:12:55- What?- It would work out about four pence.- Four pence.
0:12:56 > 0:13:00So my fabrics probably come from one of the biggest mills in the world,
0:13:00 > 0:13:04and they probably make millions of metres of fabric,
0:13:04 > 0:13:05so there is a potential here.
0:13:08 > 0:13:11My only concern is you don't own it.
0:13:11 > 0:13:15And my only concern is what's in that contract.
0:13:18 > 0:13:20But I'm going to make you an offer.
0:13:27 > 0:13:29There are some conditions on the offer,
0:13:29 > 0:13:31only because of the contract.
0:13:31 > 0:13:33That's understandable, yeah.
0:13:33 > 0:13:34I want...
0:13:37 > 0:13:40..my lawyers, in conjunction with yourself,
0:13:40 > 0:13:45- tying up an agreement that secures us to grow this business.- Yeah.
0:13:46 > 0:13:50But I want us to be equal partners, 50/50.
0:13:56 > 0:14:01So I'll give you all the money for 50%, but it has to be
0:14:01 > 0:14:05subject to sorting the contract out properly, so we're all secured.
0:14:16 > 0:14:17I, um...
0:14:22 > 0:14:23Let's do this.
0:14:23 > 0:14:25- Great. OK.- Well done.- Great.
0:14:25 > 0:14:27Well done.
0:14:27 > 0:14:29Job done.
0:14:29 > 0:14:30We'll make money out of this.
0:14:30 > 0:14:35He may have given away a whopping 45% more equity than he planned,
0:14:35 > 0:14:37but in Touker Suleyman,
0:14:37 > 0:14:40he's secured a well-connected multimillionaire investor.
0:14:44 > 0:14:48When Touker put the offer on the table, it sort of overwhelmed me
0:14:48 > 0:14:52and shocked me, but I also knew that he could take us
0:14:52 > 0:14:54to where we needed to be.
0:14:54 > 0:14:58I don't know whether to pour that bottle of wine over you before or after the spray goes on.
0:14:58 > 0:15:00- TOUKER LAUGHS - Rename it Toukerproof!
0:15:00 > 0:15:02THEY LAUGH
0:15:02 > 0:15:05The connections he has within the industry is amazing,
0:15:05 > 0:15:08so I think, you know, that it's a good deal.
0:15:17 > 0:15:21Next up, an exercise app that promises to shake up
0:15:21 > 0:15:22the way we work out.
0:15:22 > 0:15:25- Here we go.- Good luck, boys. - Good luck.
0:15:25 > 0:15:28Getting investment from any of the Dragons would be huge for us
0:15:28 > 0:15:31because it would validate the business, and it would mean
0:15:31 > 0:15:33that we can then take it to the next level,
0:15:33 > 0:15:35which is what we're keen to do.
0:15:35 > 0:15:40But will the Dragons be keen to sign up to this innovative business?
0:15:44 > 0:15:46Hello, Dragons. I'm Dom and this is Matt,
0:15:46 > 0:15:48and we're from Wireless Fitness,
0:15:48 > 0:15:51where our aim is to become the world's biggest brand
0:15:51 > 0:15:53in outdoor exercise.
0:15:54 > 0:15:58Using wireless technology and our unique Wireless Fitness app,
0:15:58 > 0:16:02we've created the concept of doing outdoor exercise classes to music.
0:16:02 > 0:16:05We're here today to try and raise £100,000
0:16:05 > 0:16:08in return for a 15% share in our company.
0:16:08 > 0:16:11Now, with the help of our fabulous instructor Tanya,
0:16:11 > 0:16:14we'd like to demo the equipment, but we'd like your help to do so.
0:16:14 > 0:16:17Would you guys mind wearing a pair of headphones each?
0:16:17 > 0:16:18If you put it around that way.
0:16:18 > 0:16:20There's a volume control on the bottom.
0:16:20 > 0:16:23- MUSIC PLAYS THROUGH HEADPHONES - Tanya's got yours.
0:16:23 > 0:16:25- The music's on, so do we...? - Hello, Dragons!
0:16:25 > 0:16:29- Can you...- I want to get you up for a quick and easy workout,
0:16:29 > 0:16:30if you'd like to join us.
0:16:30 > 0:16:33- LAUGHTER - Fantastic!- Fantastic, stretching it out already!
0:16:33 > 0:16:36All right, can we all hear my voice? Good.
0:16:36 > 0:16:39All right, now bring those feet wide. Good.
0:16:39 > 0:16:42Weight in the heels, hands up, sit back.
0:16:42 > 0:16:44Nice! Looking good!
0:16:44 > 0:16:46Now we're going to add a little twist.
0:16:46 > 0:16:49Just reach opposite hand to foot, warming up through the back,
0:16:49 > 0:16:50hips, knees and ankles.
0:16:51 > 0:16:53Well done. Thank you very much.
0:16:53 > 0:16:57You can take a seat and your headphones off. Thank you very much.
0:16:57 > 0:16:59LAUGHTER
0:16:59 > 0:17:00- Thank you very much!- Whoo!
0:17:04 > 0:17:07The Wireless Fitness system allows fitness instructors to deliver
0:17:07 > 0:17:10everyone's favourite music-based exercise classes
0:17:10 > 0:17:14in any location without disturbing other local residents.
0:17:14 > 0:17:16The result - a portable exercise studio.
0:17:16 > 0:17:18We've been trading using the existing system
0:17:18 > 0:17:21we've just demonstrated for two years now.
0:17:21 > 0:17:23However, we've taken things one step further
0:17:23 > 0:17:26by developing the Wireless Fitness app.
0:17:26 > 0:17:28The app streams the music and the voice of the instructor
0:17:28 > 0:17:30to the phones of the participants,
0:17:30 > 0:17:32who listen in using their own headphones.
0:17:32 > 0:17:36The app also processes class payments, allows the instructor
0:17:36 > 0:17:38to organise their fitness programmes,
0:17:38 > 0:17:40and drives traffic to their classes.
0:17:40 > 0:17:42We charge an 8% transaction fee on this,
0:17:42 > 0:17:48and on an average class cost of £6, this equates to 48p per transaction.
0:17:49 > 0:17:54With this in mind, we calculate a year-three turnover of £4.8 million.
0:17:55 > 0:17:57We'd like to thank Tanya for her help.
0:17:57 > 0:18:00- We welcome any questions you may have.- Thank you very much. - Thank you.
0:18:02 > 0:18:06A pitch to get the blood pumping from Dom Thorpe and Matt Boyles,
0:18:06 > 0:18:12who are seeking £100,000 for a 15% share of their outdoor exercise app.
0:18:13 > 0:18:16But will any of the Dragons think their business
0:18:16 > 0:18:19is in a good enough shape to invest?
0:18:19 > 0:18:21Sarah Willingham is first with the questions.
0:18:24 > 0:18:27- Dom, Matt, hi - Sarah. - Hi, Sarah.
0:18:27 > 0:18:29Um, when you first walked in and you said,
0:18:29 > 0:18:34"We've created the concept of doing outdoor exercise to music,"
0:18:34 > 0:18:37I thought, "Ey-up, they haven't done that."
0:18:37 > 0:18:41But, kind of, as it progressed, I get the fact that this is
0:18:41 > 0:18:45- all about... It just all happens within your ears.- Absolutely.
0:18:45 > 0:18:48So what are we investing in - are we investing in the future
0:18:48 > 0:18:50of the app or the future of the headphone business?
0:18:50 > 0:18:53- In theory, the future of the app, because...- Not in theory,
0:18:53 > 0:18:55cos actually, you are stood here pitching, so...
0:18:55 > 0:18:57- Apologies.- ..in reality! - Apologies, yes.
0:18:57 > 0:18:59So, we're asking you to invest in the app,
0:18:59 > 0:19:02so for further development, cos that's where we see
0:19:02 > 0:19:04the business going for the future.
0:19:04 > 0:19:06The raison d'etre, if I may be posh,
0:19:06 > 0:19:08is to make fitness instructors more successful.
0:19:08 > 0:19:12We've had people running 50, 60 people on Clapham Common in London.
0:19:12 > 0:19:1450% had seen a class taking place,
0:19:14 > 0:19:17come up, taken a flyer, then come back the next week.
0:19:17 > 0:19:19The instructors can save on marketing costs,
0:19:19 > 0:19:22and the exposure for brands is potentially massive.
0:19:22 > 0:19:26We are actually in the process of developing a deal with Zumba,
0:19:26 > 0:19:28a billion-dollar business, I'm sure you know.
0:19:28 > 0:19:31The beauty of it is that working with us,
0:19:31 > 0:19:33they instantly have infinitely more locations,
0:19:33 > 0:19:36they can also have happier instructors who are making
0:19:36 > 0:19:39more money, working fewer hours, and having bigger classes.
0:19:41 > 0:19:45Talk of a potential partnership with a global fitness phenomenon
0:19:45 > 0:19:48could elevate Matt and Dom's business to the big time.
0:19:50 > 0:19:53But something's not working out for Nick Jenkins.
0:19:57 > 0:19:59Why would Zumba do business with you
0:19:59 > 0:20:01when in fact they could develop an app that does this?
0:20:01 > 0:20:05Cos they're limited by their own pool of...er, instructors...
0:20:05 > 0:20:08Which is... Sorry, and how big is... How many instructors are there?
0:20:08 > 0:20:11- It's estimated at 100,000. - About 100,000?
0:20:11 > 0:20:13OK, and how many instructors have you got?
0:20:13 > 0:20:16- Well...- Well, they're not... - 100,000 potential instructors,
0:20:16 > 0:20:19- soon-to-be assimilated... - No, no, no, sorry, you said Zumba
0:20:19 > 0:20:22is limited to its limited pool of only 100,000 instructors -
0:20:22 > 0:20:26that's peanuts compared with how many instructors you've got on your books, isn't it?
0:20:26 > 0:20:30- Yes...- I mean, they're going to be...I could be chomping at the bit to do this deal. So...
0:20:30 > 0:20:33So what do you offer Zumba?
0:20:33 > 0:20:36- More exposure, opportunities... - You don't offer more exposure.
0:20:36 > 0:20:39They're a massive multi-million-pound business!
0:20:39 > 0:20:42How many Zumba classes did you see on the way to work this morning?
0:20:44 > 0:20:46- Um... - LAUGHTER
0:20:46 > 0:20:48- None!- To be honest... - Cos they're all in the studio.
0:20:48 > 0:20:51..I was looking at my phone all the way. I didn't notice and it was raining.
0:20:51 > 0:20:53The traffic that drives to our Wireless Fitness pilot
0:20:53 > 0:20:55all came from people seeing classes take place,
0:20:55 > 0:20:57and an outdoor class is exposed
0:20:57 > 0:21:00infinitely more than an indoor class.
0:21:04 > 0:21:06Despite intense interrogation,
0:21:06 > 0:21:09the entrepreneurial personal trainers are convinced
0:21:09 > 0:21:12their outdoor model will attract attention
0:21:12 > 0:21:14and therefore reap rewards.
0:21:14 > 0:21:18But can its technology stand up to Peter Jones's scrutiny?
0:21:21 > 0:21:23Where are you with the app at the moment?
0:21:23 > 0:21:27So, what we've got is a skeleton framework which will combine,
0:21:27 > 0:21:30or merge my voice and the music that I'm playing,
0:21:30 > 0:21:35and then stream that via the cloud or 3G to a user's phone.
0:21:35 > 0:21:39And what happens if I'm not in an area where I've got full 3G coverage?
0:21:39 > 0:21:42That's absolutely, er, the consideration,
0:21:42 > 0:21:46so the instructors will have to research not only 3G strength
0:21:46 > 0:21:49or 4G strength, but also surface, location, things like that.
0:21:49 > 0:21:53- I think this is a major flaw for your concept.- OK.
0:21:54 > 0:21:56You're going to have, in some areas, and there are -
0:21:56 > 0:21:59it's very well known, some people will be on an O2 network
0:21:59 > 0:22:02- and it works, some people will have EE and it doesn't.- Mm.
0:22:02 > 0:22:05Some people will be on Vodafone and it works, some people will be
0:22:05 > 0:22:07on Three and it doesn't, and they're in the same location.
0:22:07 > 0:22:11Well, we're talking about the prototype launch of the app this year.
0:22:11 > 0:22:14The full launch of the app probably wouldn't be until 2016.
0:22:14 > 0:22:16Yes, there are blackspots at the moment,
0:22:16 > 0:22:18but that will be worked on to improve coverage.
0:22:20 > 0:22:24The entrepreneurs have kept their cool so far, but they are now
0:22:24 > 0:22:28forced to admit that the success of their business hangs on the UK's
0:22:28 > 0:22:32sometimes patchy network coverage getting significantly better.
0:22:33 > 0:22:37Does Deborah Meaden think it's a risk worth taking?
0:22:38 > 0:22:43I don't pretend to be an expert in this field at all.
0:22:44 > 0:22:47But I completely understand how this would work.
0:22:49 > 0:22:53What's put me off is that I'm not particularly technically savvy.
0:22:55 > 0:22:57Peter is concerned about it.
0:22:57 > 0:22:59If Peter's concerned about it, I'm concerned about it,
0:22:59 > 0:23:02because he's technologically... he knows a lot more than I do.
0:23:04 > 0:23:06I just won't be investing, so I'm out.
0:23:11 > 0:23:13There are parts of this that I really like.
0:23:13 > 0:23:17What I really like is you offering an independent trainer
0:23:17 > 0:23:20and mechanism whereby anybody turning up within
0:23:20 > 0:23:24the vicinity of their class can press a button and they pay.
0:23:24 > 0:23:26So you have to pay to play.
0:23:26 > 0:23:30What do you think, to you, is the lifetime value of a customer,
0:23:30 > 0:23:32ie, someone attending that class?
0:23:33 > 0:23:34- Good question.- Mm.
0:23:34 > 0:23:37I don't know the answer to that, but we expect it would be
0:23:37 > 0:23:39the lifetime value of any customer
0:23:39 > 0:23:42attending an ordinary aerobics class, so...
0:23:42 > 0:23:43No, no, cos you're only making 48p.
0:23:45 > 0:23:47So what's your 12-month value?
0:23:47 > 0:23:50What's the 12-month value of a customer to you?
0:23:50 > 0:23:53Yeah, er... I don't know the answer to that, I'm afraid,
0:23:53 > 0:23:57cos we've focused on the revenue out from the instructor's perspective.
0:24:02 > 0:24:04- Can I tell you where I am? - Yeah.- Um...
0:24:05 > 0:24:10I think the platform for personal trainers is very interesting.
0:24:10 > 0:24:14But I'm afraid you haven't demonstrated that you can
0:24:14 > 0:24:17make the most of this opportunity yet.
0:24:17 > 0:24:21- But I hope you do something with it. - Thank you.- But I'm out.- Thank you.
0:24:24 > 0:24:28- Dom, Matt.- Hello. - Hi, guys, I'm Touker.
0:24:28 > 0:24:29You guys look great.
0:24:29 > 0:24:32You're very presentable, you're probably great trainers.
0:24:32 > 0:24:35However, I think you should definitely stay with your day job.
0:24:36 > 0:24:40There's a lot of, "I don't know the answer to that."
0:24:41 > 0:24:45As far as myself investing in this,
0:24:45 > 0:24:48you've got more chance
0:24:48 > 0:24:53of seeing me doing a marathon than you've got me investing in that.
0:24:53 > 0:24:58So, guys, I'm terribly sorry, I'm not going to invest. I'm out.
0:24:58 > 0:24:59- Thank you.- Thank you.
0:25:01 > 0:25:04Rejection from a third Dragon.
0:25:06 > 0:25:10But Sarah Willingham and Peter Jones are still in the game.
0:25:12 > 0:25:15It's a bit disappointing you didn't come here with the right tech
0:25:15 > 0:25:18and the understanding of how you're going to implement it,
0:25:18 > 0:25:20because I might have been interested in this.
0:25:20 > 0:25:23I don't want to risk £100,000 of my capital,
0:25:23 > 0:25:27and I think you're going to make a lot of mistakes along the way.
0:25:27 > 0:25:29So I'm not going to invest, and say that I'm out.
0:25:29 > 0:25:32- Thank you.- Thank you. - Appreciate your feedback.
0:25:36 > 0:25:38Only Sarah Willingham now remains.
0:25:38 > 0:25:43Can she see past the concerns and invest in the app?
0:25:45 > 0:25:48I think it's a really neat idea.
0:25:50 > 0:25:53Well, actually, what I should say is,
0:25:53 > 0:25:56- I think there's a really neat idea in there.- OK.
0:25:56 > 0:26:00This is about trying to get people outside
0:26:00 > 0:26:02to do classes that doesn't...
0:26:02 > 0:26:06You can do it with specific people in specific locations at the moment,
0:26:06 > 0:26:08but there's not a hub.
0:26:08 > 0:26:11So I completely get that, and I actually think...
0:26:11 > 0:26:14It's going to take a lot of marketing and a lot of spend
0:26:14 > 0:26:17to get that awareness out there, but there is a model in there.
0:26:21 > 0:26:26Unfortunately, what you've come here and presented is,
0:26:26 > 0:26:28it's way too much of a punt.
0:26:29 > 0:26:33- It's not for me, guys. I'm out. - Thank you.- Thank you.- Bye-bye.
0:26:35 > 0:26:38No deal for Dom and Matt.
0:26:38 > 0:26:41As all the Dragons agreed, their exercise app
0:26:41 > 0:26:44has a long way to go before it's ready for investment.
0:26:47 > 0:26:48How do you think that went?
0:26:48 > 0:26:51- What do you think? - Could have been worse.
0:26:51 > 0:26:53Could have been worse.
0:26:53 > 0:26:57The amount you'd have to throw in to grow the customer base is colossal.
0:26:58 > 0:27:00You could throw millions at it!
0:27:08 > 0:27:11So the Dragons weren't sold on hi-tech fitness,
0:27:11 > 0:27:16but maybe a familiar face with a more low-tech version of working out
0:27:16 > 0:27:18might get a warmer reception.
0:27:20 > 0:27:23Peter Ashley had visited the Den before,
0:27:23 > 0:27:26with his armchair exercise machine.
0:27:26 > 0:27:29But he's been back to the drawing board and has now returned,
0:27:29 > 0:27:34with an all-new improved version, this time to ease executive stress.
0:27:35 > 0:27:39We are the inventors of a new exercise system
0:27:39 > 0:27:42which can be placed onto a wheelchair
0:27:42 > 0:27:44or an ordinary office chair.
0:27:45 > 0:27:48And, um, office stress is one of
0:27:48 > 0:27:53the biggest health problems in this country at this moment of time.
0:27:54 > 0:27:58They were looking for £55,000 for 15% equity
0:27:58 > 0:28:01in their EasyX chair company.
0:28:01 > 0:28:05But Peter Jones was more interested in easing a growing sense of deja vu.
0:28:07 > 0:28:11- I've seen you before. - I think so, Peter, yes, yes.
0:28:11 > 0:28:13It's a walking machine, not a running machine.
0:28:14 > 0:28:18It was probably, I think, the funniest moment ever
0:28:18 > 0:28:20- in the Den with Duncan. - With Duncan Bannatyne.
0:28:20 > 0:28:24- You're frightening the life out of me! - LAUGHTER
0:28:24 > 0:28:26This time, it was Touker Suleyman
0:28:26 > 0:28:29who put Peter's latest invention through its paces.
0:28:29 > 0:28:31LAUGHTER
0:28:31 > 0:28:34You look like Harry Hill, trying to get fit in the living room.
0:28:34 > 0:28:35LAUGHTER
0:28:35 > 0:28:39The office chair looks like something out of 50 Shades.
0:28:39 > 0:28:43But, sadly, none of the Dragons could see Peter's chairs
0:28:43 > 0:28:44in the boardrooms of Britain.
0:28:44 > 0:28:48It's a bit like inventing a smoke alarm with a snooze button.
0:28:49 > 0:28:51- Uh, smoke alarms... - There's not really any point.
0:28:51 > 0:28:55But before Peter took a brisk walk out of the Den,
0:28:55 > 0:28:59Touker Suleyman wanted to know more about the man behind the machine.
0:29:00 > 0:29:03Are you doing anything else apart from this?
0:29:03 > 0:29:05Well, I am a psychotherapist and hypnotherapist.
0:29:05 > 0:29:07Do you really do hypnotism, Peter?
0:29:07 > 0:29:09- Do I?- Yeah.- Yes, of course.
0:29:09 > 0:29:13But he wasn't able to put the Dragons under his spell,
0:29:13 > 0:29:16and it was left to Deborah Meaden to once again
0:29:16 > 0:29:19quash Peter's business dreams.
0:29:19 > 0:29:22Please, wake up. It is not going to happen.
0:29:22 > 0:29:26Please, do not do this thing, because it is not going anywhere.
0:29:28 > 0:29:29I'm out.
0:29:29 > 0:29:32Peter, good luck. It is genuinely lovely to see you,
0:29:32 > 0:29:35- you're a very funny guy.- Thank you. - Thank you.- Thank you very much.
0:29:35 > 0:29:36- Goodbye.- Good luck.
0:29:42 > 0:29:45- You can breathe now though, yeah? - Oh, my goodness me.
0:29:47 > 0:29:48It didn't work out for Peter,
0:29:48 > 0:29:52but will any of these ambitious entrepreneurs
0:29:52 > 0:29:55be in with a chance of unlocking some Dragon cash?
0:29:55 > 0:30:00All of those doors that you've slogged so hard to open,
0:30:00 > 0:30:02one of us could open like...
0:30:03 > 0:30:04..that.
0:30:04 > 0:30:07It's quite bizarre, it's like the thing that you kind of
0:30:07 > 0:30:10dream of happening. It's almost too good to be true.
0:30:10 > 0:30:12- Can you just pinch me.- Yeah.
0:30:15 > 0:30:19Company valuations are often a thorny issue in the Den.
0:30:19 > 0:30:22We've already seen one entrepreneur tonight
0:30:22 > 0:30:25torn apart on his £2 million valuation.
0:30:25 > 0:30:28Well, our next entrepreneur, a former figure skater from Russia,
0:30:28 > 0:30:31has put an equally high price on her business.
0:30:31 > 0:30:35So is she skating on thin ice with the Dragons?
0:30:39 > 0:30:41As far as figure skating is concerned,
0:30:41 > 0:30:45it does prepare you for life in terms of hard work
0:30:45 > 0:30:47and discipline and determination.
0:30:47 > 0:30:53I, um, probably can only compare the level of intensity
0:30:53 > 0:30:57to setting up my own fresh food business.
0:30:57 > 0:31:00You do everything and you focus on getting there.
0:31:14 > 0:31:15Hello.
0:31:15 > 0:31:17My name is Natasha Bowes
0:31:17 > 0:31:20and I'm here to introduce you to kefir.
0:31:22 > 0:31:27Kefir is a miracle food that my company, Bio-tiful Dairy -
0:31:27 > 0:31:29it's like beautiful only bio -
0:31:29 > 0:31:33has been producing and distributing in the UK for the last two years.
0:31:35 > 0:31:38Kefir is the tastiest way to support your wellbeing.
0:31:40 > 0:31:42I grew up on this drink
0:31:42 > 0:31:46and I have missed it so much since I left Moscow 16 years ago.
0:31:47 > 0:31:51It has a long list of proven health benefits,
0:31:51 > 0:31:55it has about 40 different types of beneficial bacterium,
0:31:55 > 0:31:57compared to yoghurt that has one or two.
0:31:58 > 0:32:02Hundreds of millions of people drink this product every day
0:32:02 > 0:32:07across Russia, eastern Europe, Scandinavia, big parts of Asia,
0:32:07 > 0:32:09and now it's huge in America as well.
0:32:09 > 0:32:13The investment proposition, taking 10% in the business,
0:32:13 > 0:32:17and putting £250,000 in.
0:32:17 > 0:32:19Thank you very much for your attention,
0:32:19 > 0:32:23and I would love to share our products with you.
0:32:24 > 0:32:29Muscovite Natasha Bowes is seeking £250,000
0:32:29 > 0:32:32for a 10% stake in her business.
0:32:33 > 0:32:34Thank you.
0:32:34 > 0:32:37She believes her take on this traditional Russian drink
0:32:37 > 0:32:39can become the next British health craze.
0:32:39 > 0:32:41Thank you.
0:32:41 > 0:32:43And her product appears to have brought out
0:32:43 > 0:32:46the nostalgic in Nick Jenkins.
0:32:48 > 0:32:54Natasha. Hello, I'm Nick. This also takes me back a little bit, um,
0:32:54 > 0:32:56to when I was a student in the Kievskii Gosudarstvenny
0:32:56 > 0:32:59Pedagogicheskii Institut Inostrannykh Yazykov...
0:32:59 > 0:33:00Very impressive!
0:33:00 > 0:33:02..where kefir was introduced to me.
0:33:02 > 0:33:05The first thing that we did with it when we got presented with it,
0:33:05 > 0:33:06it came in cartons,
0:33:06 > 0:33:09we dropped it out of the eighth floor of the obshchezhitiye window,
0:33:09 > 0:33:12um, to see what mess it would make on the pavement outside.
0:33:12 > 0:33:15It explodes in a big, white splosh.
0:33:15 > 0:33:17But after that, subsequently when I started working,
0:33:17 > 0:33:19I spent eight years living in Moscow,
0:33:19 > 0:33:21so I have had a lot of kefir in my time.
0:33:21 > 0:33:25Would you be able to just explain a little bit about why it's different
0:33:25 > 0:33:29from other yoghurty-type products that are available?
0:33:30 > 0:33:32Beyond the age of three or so,
0:33:32 > 0:33:35we cannot really absorb milk very well...
0:33:35 > 0:33:37- Yeah.- ..as human beings.
0:33:37 > 0:33:40Because it is cultured milk or fermented milk,
0:33:40 > 0:33:44we can actually absorb the minerals from the milk,
0:33:44 > 0:33:46the calcium, phosphorous, magnesium,
0:33:46 > 0:33:49much better than we can from the normal milk.
0:33:49 > 0:33:52I actually like it with my palate,
0:33:52 > 0:33:56but I'm not sure the mass-market are going to go for it,
0:33:56 > 0:33:59because it's a very difficult one for
0:33:59 > 0:34:03our palate, that's actually been brought up with a sweeter tooth...
0:34:04 > 0:34:08..I think, wrongly, but we have been - fact.
0:34:08 > 0:34:10And this is going to need a lot of money spent on
0:34:10 > 0:34:13not the marketing of your product,
0:34:13 > 0:34:17but the marketing of the principle of somebody drinking this.
0:34:17 > 0:34:19All the points you are making are super valid.
0:34:19 > 0:34:21The point, though, is that
0:34:21 > 0:34:24without any significant marketing budget at all...
0:34:24 > 0:34:27- Mmm.- ..I've grown it over ten times, over 2014,
0:34:27 > 0:34:29and I've grown it further now.
0:34:32 > 0:34:36Natasha deflects Sarah Willingham's concerns that her product
0:34:36 > 0:34:39won't indulge the nation's collective sweet tooth.
0:34:41 > 0:34:44Now, Touker Suleyman wants answers
0:34:44 > 0:34:47on where this product sits in the marketplace.
0:34:50 > 0:34:54- What does that cost?- £1.99. - £1.99.- Mm.
0:34:55 > 0:35:00Now, if you put that in a place like Sainsbury's,
0:35:00 > 0:35:01next to the other smoothies,
0:35:01 > 0:35:04how does that compare to an average smoothie in price?
0:35:04 > 0:35:07- I'm in the price bracket, indeed. - It's within the price bracket?
0:35:07 > 0:35:10And it's a premium product. As far as premium product is concerned,
0:35:10 > 0:35:13it is absolutely in the price bracket.
0:35:13 > 0:35:14Which is your biggest retail outlet?
0:35:14 > 0:35:19My two biggest customers are Ocado and Realfood Organic.
0:35:19 > 0:35:22My customers also include Whole Foods,
0:35:22 > 0:35:28Planet Organic, Selfridges, Harrods, Fortnum and Mason... Et cetera.
0:35:28 > 0:35:30Have you ever tried to get into a big supermarket?
0:35:31 > 0:35:34I have spoken to one national chain.
0:35:34 > 0:35:39- Yes.- Um, that is, which brand is most consistent with
0:35:39 > 0:35:43- the premium branding of my product. - Who is that chain?
0:35:43 > 0:35:45I don't know if I'm in, um...
0:35:46 > 0:35:49..if it's ethical for me to be naming it,
0:35:49 > 0:35:51given that it's not my customer yet.
0:35:51 > 0:35:54So you want me to invest and then you'll tell me later?
0:35:54 > 0:35:57- I have told you who my current customers are...- OK.
0:35:57 > 0:36:00..and I'm also explaining what's...
0:36:00 > 0:36:02It's entirely ethical to say, they'll be talking to
0:36:02 > 0:36:03hundreds of other people.
0:36:03 > 0:36:07They're not going to bother about you mentioning their name.
0:36:07 > 0:36:09And I think you kind of have to, don't you?
0:36:10 > 0:36:13You know, for us to evaluate, is this a real proposition?
0:36:13 > 0:36:17Is it somewhere we can help? Is it somebody I know in there?
0:36:17 > 0:36:19You know, we've kind of gotta know.
0:36:19 > 0:36:20It's Waitrose.
0:36:24 > 0:36:28It took a while to get there, but Natasha finally opens up
0:36:28 > 0:36:30about those all-important supermarket leads.
0:36:32 > 0:36:36But Peter Jones wants to get to grips with what's propping up
0:36:36 > 0:36:40this business's £2.5 million valuation.
0:36:44 > 0:36:48Natasha. The last 12 months, what's been your revenue?
0:36:48 > 0:36:54Um, the revenue is 218. Thousand pounds, obviously!
0:36:54 > 0:36:57So, £218,000, and what was your net profit?
0:36:57 > 0:37:01Uh, it's actually finished exactly at zero,
0:37:01 > 0:37:04as I was reinvesting all the money I was generating.
0:37:04 > 0:37:06OK, so you didn't make any money.
0:37:06 > 0:37:08- OK.- Deliberately.
0:37:08 > 0:37:10You deliberately ran the business not to make money.
0:37:10 > 0:37:13Because I reinvested, I wanted to make sure that
0:37:13 > 0:37:16I invest as much as possible into the further growth of the business,
0:37:16 > 0:37:18because of its great potential.
0:37:18 > 0:37:21So, 218,000 revenue,
0:37:21 > 0:37:24zero profit.
0:37:24 > 0:37:26And...
0:37:27 > 0:37:30..you value your company at £2.5 million.
0:37:32 > 0:37:35That's not quite the statement that I would make,
0:37:35 > 0:37:37because I do not look to sell my company.
0:37:37 > 0:37:40- You do.- No. - That's what you're doing now.
0:37:40 > 0:37:44- No, because...- Well, you're selling part of your company to me,
0:37:44 > 0:37:46or trying to. For an amount of money.
0:37:46 > 0:37:48And you're asking me to invest in your business
0:37:48 > 0:37:50at a valuation of two-and-a-half million,
0:37:50 > 0:37:53and yet your business isn't worth anything at the moment.
0:37:53 > 0:37:56I would disagree that it's not worth anything,
0:37:56 > 0:37:59and also, I am not insisting or requiring
0:37:59 > 0:38:01that you invest in my business.
0:38:01 > 0:38:03I am putting a proposition forward,
0:38:03 > 0:38:06and if you do not agree or you do not find it attractive,
0:38:06 > 0:38:09then of course you do not have to invest.
0:38:11 > 0:38:14Natasha's take it or leave it approach
0:38:14 > 0:38:17to Peter Jones's interrogation over her valuation
0:38:17 > 0:38:20has left the Den's longest-serving Dragon
0:38:20 > 0:38:22uncharacteristically speechless.
0:38:24 > 0:38:29Will food expert Sarah Willingham be persuaded to put her cash into kefir?
0:38:31 > 0:38:35I totally get it, and I love what you've created, honestly.
0:38:35 > 0:38:37You are preaching to the converted.
0:38:37 > 0:38:39But I am not converted on the valuation,
0:38:39 > 0:38:41because to value a business at two-and-a-half million,
0:38:41 > 0:38:43which didn't make any money,
0:38:43 > 0:38:45that only turned over 200 grand last year,
0:38:45 > 0:38:48is... I don't even know what to say to that.
0:38:48 > 0:38:52- It's crazy.- I... - Because the value is to come.
0:38:52 > 0:38:54So maybe if you came back in three or four years and said,
0:38:54 > 0:38:57"Look, I've just turned over a million
0:38:57 > 0:39:01"and I've made 200 grand bottom line" or "400 grand bottom line"...
0:39:01 > 0:39:04And I completely take your point and I can understand it, 100%,
0:39:04 > 0:39:07- sitting on your side of the table. - Yes.
0:39:07 > 0:39:10But on my side of the table, I've invested three years into this...
0:39:10 > 0:39:13- Yeah.- ..of my life, my money, my everything.- Yeah.
0:39:13 > 0:39:18And I know exactly how huge the potential in this business is.
0:39:18 > 0:39:20However, you're not there yet.
0:39:20 > 0:39:21And that's the problem.
0:39:22 > 0:39:24As an investment for me,
0:39:24 > 0:39:27it's not one that I'm going to be able to participate in.
0:39:27 > 0:39:28I'm out.
0:39:29 > 0:39:30Natasha.
0:39:30 > 0:39:33I think this is a good product.
0:39:33 > 0:39:36But I think, unfortunately, only 2% of the UK population
0:39:36 > 0:39:38will really appreciate why it's a good product,
0:39:38 > 0:39:41so you're going to have a problem explaining that.
0:39:41 > 0:39:43And what you haven't done yet
0:39:43 > 0:39:45is demonstrate that you can break this
0:39:45 > 0:39:48out of a tiny niche, into significant sales.
0:39:48 > 0:39:50For that reason, I'm out.
0:39:52 > 0:39:55Two Dragons declare themselves out.
0:39:57 > 0:40:02But Deborah Meaden isn't ready to give up on Natasha just yet.
0:40:06 > 0:40:11All of those doors that you've slogged so hard to open,
0:40:11 > 0:40:13one of us could open like...
0:40:14 > 0:40:15..that.
0:40:16 > 0:40:19And you need, if in a situation like this,
0:40:19 > 0:40:22to place value on that.
0:40:22 > 0:40:26My valuation is what I'm putting forward as the proposition.
0:40:26 > 0:40:31Proposition and the backstop are two different things.
0:40:32 > 0:40:35And I didn't say it was an absolute take it or leave it,
0:40:35 > 0:40:39it's what I wanted to defend as a proposition.
0:40:39 > 0:40:43Waiting that people would make a reasonable offer,
0:40:43 > 0:40:46that they consider to be reasonable, that I can react to.
0:40:48 > 0:40:51That's not the impression you gave. But is that true?
0:40:51 > 0:40:53Well, I'm Russian, so...
0:40:53 > 0:40:55LAUGHTER
0:40:56 > 0:40:57OK.
0:40:57 > 0:40:59Let's play this one out, let's see.
0:41:02 > 0:41:03I'll make you an offer.
0:41:05 > 0:41:10My end of it is that I would have somebody working with you who was
0:41:10 > 0:41:14absolutely right for this, and with absolutely the right connections.
0:41:15 > 0:41:18Um, and I'm going to offer you all of the money.
0:41:20 > 0:41:23And I want 45% of the business.
0:41:36 > 0:41:38I wouldn't, um, accept that offer.
0:41:41 > 0:41:4520% would be the absolute maximum I would go for.
0:41:45 > 0:41:50I'm sorry, at 20%, the valuation is crazy.
0:41:52 > 0:41:53I fully understand.
0:41:55 > 0:41:57OK.
0:41:57 > 0:41:59I'm afraid I'm out.
0:42:02 > 0:42:05A Dragon deal rejected.
0:42:05 > 0:42:08Natasha's sticking to her guns to ensure
0:42:08 > 0:42:10her company's valuation remains intact.
0:42:12 > 0:42:16Deborah Meaden's deal knocked almost £2 million off the business.
0:42:16 > 0:42:20Is Touker Suleyman ready to better her proposition?
0:42:23 > 0:42:24Natasha.
0:42:26 > 0:42:28I think you rejected a very good offer.
0:42:30 > 0:42:32If I had made an offer it would be very similar.
0:42:34 > 0:42:37But it's very apparent that's not where you want to be.
0:42:38 > 0:42:42And, for that reason, I'm out.
0:42:44 > 0:42:46Natasha.
0:42:47 > 0:42:49Investors will look to back the right people,
0:42:49 > 0:42:51and I think you are the right person.
0:42:51 > 0:42:55You're tenacious, you're determined, and the blood, sweat and tears
0:42:55 > 0:42:58that you've put into developing it, that's admirable.
0:43:00 > 0:43:02So you're incredibly investable on one hand.
0:43:05 > 0:43:08But you've made yourself uninvestable on the other
0:43:08 > 0:43:10by such a ridiculous valuation.
0:43:11 > 0:43:14I think you really need to reset any expectation
0:43:14 > 0:43:18if you want to raise or get an investor on board.
0:43:18 > 0:43:21So I can't even get to the point about the product
0:43:21 > 0:43:23because I think it would be a waste of time.
0:43:23 > 0:43:26So that's why I'm not going to invest, and say that I'm out.
0:43:27 > 0:43:28Thank you.
0:43:31 > 0:43:34Natasha's self belief won the praise of Peter Jones
0:43:34 > 0:43:38but she couldn't convince the Dragons of her company's worth,
0:43:38 > 0:43:41and she leaves the Den empty handed.
0:43:41 > 0:43:44I'm surprised you made an offer, even tried it.
0:43:44 > 0:43:47- Really?- Yeah.- I'll tell you what I think her problem is,
0:43:47 > 0:43:49she's looking at this
0:43:49 > 0:43:52as though we're ordinary "fire and forget" investors.
0:43:53 > 0:43:56It's just difference of opinion on the value.
0:43:56 > 0:43:59One has to make a business decision
0:43:59 > 0:44:02and that was the decision for both sides in the end.
0:44:14 > 0:44:18Our last entrepreneur to step into the Den is Deepak Tailor.
0:44:18 > 0:44:22He's turned his talent for bagging a bargain into a business.
0:44:25 > 0:44:27I am just about to go into the Den and I am confident.
0:44:27 > 0:44:30I think the Dragons are going to love my company, they're going to
0:44:30 > 0:44:32love what we do and they're going to,
0:44:32 > 0:44:33hopefully, believe in the vision.
0:44:45 > 0:44:49My name is Deepak Tailor, I'm looking for a £50,000 investment
0:44:49 > 0:44:51in return for 10% equity in my company.
0:44:51 > 0:44:54Now, a few years ago I was spending a lot of time on the internet
0:44:54 > 0:44:57trying to learn about ways to save money,
0:44:57 > 0:44:59and I came across these freebie websites.
0:44:59 > 0:45:01They were places where you could order free samples of products,
0:45:01 > 0:45:03things like make-up and food,
0:45:03 > 0:45:05and I began using these sites regularly.
0:45:05 > 0:45:09I quickly became disappointed by the selections available on their sites.
0:45:09 > 0:45:12I felt like they focused far too much on advertising
0:45:12 > 0:45:14rather than giving the consumer what they want,
0:45:14 > 0:45:15which was real, free products.
0:45:15 > 0:45:18So, instead, I created Latest Free Stuff
0:45:18 > 0:45:22as an innovative platform to connect consumers to retailers.
0:45:22 > 0:45:25I'll show you how easy it is to use the website.
0:45:25 > 0:45:28Say a consumer wants to order this shampoo.
0:45:28 > 0:45:31They click on the "get freebie" button...
0:45:32 > 0:45:34..and it loads up the brand's website.
0:45:34 > 0:45:37They fill in their details and submit the form
0:45:37 > 0:45:41and the brand will post a sample directly to the user's house.
0:45:41 > 0:45:42It's that easy.
0:45:43 > 0:45:46Now, the website is not only the perfect platform
0:45:46 > 0:45:47for consumers to try before they buy,
0:45:47 > 0:45:50but also for brands to launch brand awareness
0:45:50 > 0:45:52for their new marketing campaigns.
0:45:53 > 0:45:57We get paid a small commission for products and services
0:45:57 > 0:45:59offered from our partners
0:45:59 > 0:46:03and we've already partnered with large companies
0:46:03 > 0:46:06including Vodafone, O2, Uber, Amazon and many more.
0:46:06 > 0:46:09We attract over 300,000 visitors a month
0:46:09 > 0:46:13and we've got an e-mail database of over 140,000 users.
0:46:13 > 0:46:15We are now the UK's largest freebie website.
0:46:15 > 0:46:19And with the Dragons' investment and expertise,
0:46:19 > 0:46:22I am hoping to grow the website even further.
0:46:22 > 0:46:25Thank you for listening, I welcome any questions you may have.
0:46:28 > 0:46:32Super-saver Deepak Tailor is here to raise £50,000
0:46:32 > 0:46:37for 10% of his website that puts free stuff at your fingertips.
0:46:39 > 0:46:41But will his company pass muster
0:46:41 > 0:46:44with the Den's consumer champion, Sarah Willingham?
0:46:46 > 0:46:50I write a lot about stuff like this, I've got loads of blogs,
0:46:50 > 0:46:53and we do a lot of freebie stuff.
0:46:53 > 0:46:55So it's a space I know pretty well.
0:46:55 > 0:46:58It is such a tough space.
0:46:59 > 0:47:02Very, very heavily populated. But, I mean,
0:47:02 > 0:47:04300,000 visitors per month is impressive.
0:47:05 > 0:47:08So you must have a pretty decent margin.
0:47:08 > 0:47:13The projected profit for this year is 200,000.
0:47:14 > 0:47:17What is the actual for last year?
0:47:17 > 0:47:22Um, last year's revenue was £250,000,
0:47:22 > 0:47:26with a net profit of...130,000.
0:47:28 > 0:47:30What's your balance sheet look like?
0:47:30 > 0:47:34At the moment we've got about 150,000 in the bank.
0:47:35 > 0:47:38And we've never spent money on advertising, either,
0:47:38 > 0:47:39it's just grown.
0:47:39 > 0:47:43So your marketing budget or spend on paid-for search
0:47:43 > 0:47:45or anything in total, last year was how much?
0:47:45 > 0:47:46Um, zero.
0:47:47 > 0:47:49Because we've had exclusive deals.
0:47:49 > 0:47:52And that's the key reason for it growing so big.
0:47:54 > 0:47:56Wow.
0:47:57 > 0:47:58Deepak,
0:47:58 > 0:48:01do you have any other investors involved in the business?
0:48:01 > 0:48:04Um, no, I've never really needed investment,
0:48:04 > 0:48:07I've always just had the goal of
0:48:07 > 0:48:09keeping things slim and lean
0:48:09 > 0:48:12and trying to reinvest the profits
0:48:12 > 0:48:14into the website and grow it step by step.
0:48:14 > 0:48:17And it's latestfreestuff.com?
0:48:17 > 0:48:19- Yeah. You own the portal. - I own it, yeah.
0:48:19 > 0:48:21Yeah.
0:48:21 > 0:48:23It's almost, it's quite bizarre.
0:48:23 > 0:48:27It's like the thing that you kind of dream of happening
0:48:27 > 0:48:29is finding somebody that comes into the Den
0:48:29 > 0:48:31that's got 150,000 in the bank,
0:48:31 > 0:48:34has created a website that's really, really good,
0:48:34 > 0:48:38is offering a fairly good deal... It's almost too good to be true.
0:48:39 > 0:48:40Here.
0:48:42 > 0:48:46Profit he can be proud of, a website that's already a big hit
0:48:46 > 0:48:48and sole ownership.
0:48:48 > 0:48:51It looks like Deepak has all the elements for success.
0:48:52 > 0:48:54Which has left Deborah Meaden feeling puzzled
0:48:54 > 0:48:57as to why he's here in the first place.
0:49:00 > 0:49:03Deepak, what are you looking for from an investor?
0:49:03 > 0:49:08A problem at the moment is around 90% of the site is not monetised.
0:49:08 > 0:49:0910% of the offers are monetised,
0:49:09 > 0:49:11and that's where the revenue is coming from.
0:49:11 > 0:49:15What do you mean by non-monetised product?
0:49:15 > 0:49:17So, if I show you the website again, um,
0:49:17 > 0:49:19the Garnier shampoo at the top.
0:49:19 > 0:49:23Garnier aren't paying us for every customer who orders from there.
0:49:23 > 0:49:27Right, but the reason you put it on the site is because it adds content.
0:49:27 > 0:49:30- That's correct.- OK.- It adds value and gets people to come back.
0:49:30 > 0:49:34So 90% of your product drives content and 10% you're being paid,
0:49:34 > 0:49:37and what you're...what you need to do with the business
0:49:37 > 0:49:40is get more paid-for content.
0:49:40 > 0:49:42The problem we're having when we're talking
0:49:42 > 0:49:44to advertisers at the moment, when I set up the site,
0:49:44 > 0:49:46I wanted to create an open platform.
0:49:46 > 0:49:48So we don't have any registration pages,
0:49:48 > 0:49:50we don't have any login pages.
0:49:50 > 0:49:51To move to a next level,
0:49:51 > 0:49:53we would need to know who these consumers are,
0:49:53 > 0:49:56um, what they're interested in,
0:49:56 > 0:50:00so we could get specific deals for specific companies in the UK.
0:50:00 > 0:50:05Ah, OK, OK. I mean I... Right, I can see where you need the help now.
0:50:05 > 0:50:06Deepak, before you go off that.
0:50:06 > 0:50:09Nick, I actually think there is an issue with login,
0:50:09 > 0:50:13because on the free sites,
0:50:13 > 0:50:15people worry about being bombarded with offers.
0:50:15 > 0:50:19I would disagree with that, because it's a question of the trade-off.
0:50:19 > 0:50:22If you're someone who regularly goes in for free offers,
0:50:22 > 0:50:25at some point you have to tell them where to send the stuff to.
0:50:25 > 0:50:27If you can understand
0:50:27 > 0:50:29how often a typical user will come back
0:50:29 > 0:50:31and understand that pattern of their visits
0:50:31 > 0:50:33and on what they're ordering...
0:50:34 > 0:50:36..that is gold dust.
0:50:37 > 0:50:42An e-commerce masterclass for Deepak, as online expert Nick Jenkins
0:50:42 > 0:50:45identifies that failure to collect customer data
0:50:45 > 0:50:47will slow success.
0:50:48 > 0:50:50While Touker Suleyman is pondering
0:50:50 > 0:50:54how to take this freebie website to the big-time.
0:50:55 > 0:50:57You've got two problems.
0:50:58 > 0:51:02One, you want more traffic, and two, you want more goods.
0:51:02 > 0:51:05You know, and I can see exactly what could be done here.
0:51:05 > 0:51:09It's very much knowing the marketing directors directly with the brands.
0:51:09 > 0:51:12And that's exactly what I think a Dragon can bring.
0:51:12 > 0:51:15It's about getting more brands in there.
0:51:15 > 0:51:18I could be the Dragon
0:51:18 > 0:51:19that could open doors for you.
0:51:19 > 0:51:22I can be the one that can make the call and say,
0:51:22 > 0:51:25"This is who I want to target, how do we get there?"
0:51:25 > 0:51:26There's a lot I can offer you.
0:51:31 > 0:51:32I am going to make you an offer.
0:51:34 > 0:51:37So I'm offering you all the money,
0:51:37 > 0:51:39you'll have access to me...
0:51:40 > 0:51:41..on a daily basis.
0:51:43 > 0:51:45Nine developers in-house.
0:51:45 > 0:51:47I'm offering you a new platform,
0:51:47 > 0:51:51so your website can take whatever users go on there.
0:51:51 > 0:51:54I will deal with your strategy,
0:51:54 > 0:51:55but I want 20%.
0:51:59 > 0:52:02Retail king Touker Suleyman wastes no time
0:52:02 > 0:52:05staking his claim on the company.
0:52:05 > 0:52:07He's offering links to some big-brand names,
0:52:07 > 0:52:12but at 20%, he's asking for double the equity.
0:52:12 > 0:52:16Will Peter Jones turn his admiration for this business
0:52:16 > 0:52:18into an offer of investment?
0:52:22 > 0:52:26This is my game, I'm in this game, I have a lot of developers.
0:52:26 > 0:52:29And if I was to actually think about it for a moment...
0:52:31 > 0:52:35..I don't think it's that difficult to invest £40,000 or £50,000
0:52:35 > 0:52:39and have something that's quite superior to what you have today.
0:52:42 > 0:52:44I was quite weirdly, and it felt like a bit of a dream,
0:52:44 > 0:52:47because I'm kind of thinking, "It's impressive, it's brilliant,"
0:52:47 > 0:52:51for all of the reasons. But if you're in this game
0:52:51 > 0:52:53it's actually not that difficult.
0:52:54 > 0:52:57I'm going to say, sadly, I'm out.
0:52:59 > 0:53:04Praise for Deepak, but tech tycoon Peter Jones can't get over the fact
0:53:04 > 0:53:06that the website can be easily copied
0:53:06 > 0:53:09by anyone with a bit of software savvy.
0:53:10 > 0:53:14With those doubts hanging in the air, consumer champion Sarah Willingham
0:53:14 > 0:53:16has come to her own decision.
0:53:19 > 0:53:22I've got to tell you, I'm really excited.
0:53:22 > 0:53:26Really excited. Because you have done it,
0:53:26 > 0:53:29actually, all the right ways.
0:53:29 > 0:53:31And you just totally get your business.
0:53:31 > 0:53:34And actually, all you need, really,
0:53:34 > 0:53:36is a bit more support plugged in around you
0:53:36 > 0:53:38in the right directions, and you'll fly!
0:53:38 > 0:53:43I work extremely closely with a lot of the major discount sites,
0:53:43 > 0:53:47and there are parts of your business that could easily slot into that.
0:53:47 > 0:53:50So I would also like to make you an offer.
0:53:53 > 0:53:57But I think my magic number, in terms of percentage...
0:53:58 > 0:53:59..is 15%.
0:54:01 > 0:54:04And I was going to say 20, and it feels greedy now to say that,
0:54:04 > 0:54:07because I don't want to be greedy, because I think you've
0:54:07 > 0:54:10created something great and I don't want to take too much away from you.
0:54:10 > 0:54:14So that would be all of the money for 15% of the business.
0:54:17 > 0:54:22Despite Peter Jones's scepticism, Deepak gets a second, better offer,
0:54:22 > 0:54:26for 5% less of the business than sought by Touker Suleyman.
0:54:27 > 0:54:29Time for Nick Jenkins to make up his mind.
0:54:33 > 0:54:37My concern is that this is all driven by search,
0:54:37 > 0:54:40and that the number of people
0:54:40 > 0:54:44who are looking for free stuff is not necessarily going to grow.
0:54:44 > 0:54:47And the question really is how much more noise you can make
0:54:47 > 0:54:49than the next guy, that I just don't know how
0:54:49 > 0:54:52I could increase that organic search engine traffic.
0:54:52 > 0:54:55So, because I can't see how I can help with that,
0:54:55 > 0:54:57I'm afraid I'm going to be out.
0:54:57 > 0:55:00But I take my hat off to you for what you've built so far.
0:55:00 > 0:55:01Thank you.
0:55:05 > 0:55:10Deepak, I see this very much as a, er...
0:55:10 > 0:55:14a platform that looks like a free platform
0:55:14 > 0:55:17offering product to a consumer,
0:55:17 > 0:55:20but, actually, if you can get the platform right,
0:55:20 > 0:55:26is a campaign tool, and that's how you get more product.
0:55:27 > 0:55:30In terms of marketing and partnership expertise,
0:55:30 > 0:55:34I get the consumer journey.
0:55:34 > 0:55:38I completely understand where the money is made on this
0:55:38 > 0:55:40and the shape that this has to be.
0:55:40 > 0:55:43So I am going to make you an offer and it is for all of the money.
0:55:44 > 0:55:46And I am going to offer you the money
0:55:46 > 0:55:48on the terms that you have asked for,
0:55:48 > 0:55:50because I think it would be kind of rude not to.
0:55:54 > 0:55:57All of the money for 10% of the business.
0:56:02 > 0:56:04I think I need a minute, I think.
0:56:07 > 0:56:11The entrepreneur now has three propositions to consider.
0:56:11 > 0:56:17Deborah Meaden's 10% equity bid matches Deepak's original offer.
0:56:17 > 0:56:21However, 15% buys him Sarah Willingham's industry experience
0:56:21 > 0:56:27and 20% guarantees him access to Touker Suleyman's retail contacts.
0:56:30 > 0:56:31Um...
0:56:34 > 0:56:37So, I think I've made my decision.
0:56:42 > 0:56:44Um, I would like to accept...
0:56:46 > 0:56:49- ..Deborah's offer. - I'm delighted, Deepak!
0:56:49 > 0:56:52- I'm very pleased indeed.- Thank you. - Well done.
0:56:52 > 0:56:54Deepak has done it.
0:56:54 > 0:56:56His self-assured performance has
0:56:56 > 0:56:59won him a valuable partner in Deborah Meaden.
0:56:59 > 0:57:00I think you had a premonition,
0:57:00 > 0:57:02because you have Deborah on your website!
0:57:03 > 0:57:05Yay!
0:57:05 > 0:57:10He leaves with the respect of the Den and £50,000 of investment.
0:57:12 > 0:57:15Deborah was definitely the right person.
0:57:16 > 0:57:19We need to attract more brands into our platform.
0:57:19 > 0:57:22I think she was the best placed to make that possible.
0:57:23 > 0:57:26That was the best decision I've ever made.
0:57:38 > 0:57:41So, a thrilling finale to events in the Den,
0:57:41 > 0:57:44which have all been about valuation.
0:57:44 > 0:57:48Deborah Meaden thought Deepak had his bang-on when she invested
0:57:48 > 0:57:51all the money for the exact amount of equity he was offering,
0:57:51 > 0:57:54but Jana saw his £2 million valuation slashed
0:57:54 > 0:57:59when he accepted Touker Suleyman's offer for half his business.
0:57:59 > 0:58:04Two very different stories, but two very happy entrepreneurs.
0:58:04 > 0:58:07Coming up next time...
0:58:07 > 0:58:09The Dragons will be fine.
0:58:09 > 0:58:13I believe that I have more time than any Dragon here.
0:58:13 > 0:58:15You know nothing about your market.
0:58:15 > 0:58:17You've answered the question already,
0:58:17 > 0:58:19- don't carry on. Stop, stop. - Yeah. Sorry.
0:58:19 > 0:58:21Potentially, you could be a little bit
0:58:21 > 0:58:23all over the place in life as well.
0:58:23 > 0:58:25I'm not, I'm just very nervous, man.
0:58:25 > 0:58:27I couldn't work with you.
0:58:28 > 0:58:30I'm so sorry to say that.
0:58:30 > 0:58:33I've got to tell you, I like it.
0:58:33 > 0:58:35I think I'm going to make you an offer,
0:58:35 > 0:58:38but it's going to be quite a ballsy offer.