Episode 11 Dragons' Den


Episode 11

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Transcript


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Wealthy...

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..astute...

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innovative...

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..fearless...

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and shrewd.

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These are the Dragons.

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The heat is on in the Den.

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Together with formidable business giants Peter Jones

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and Deborah Meaden are...

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..global fashion tycoon with over 40 years' retail experience,

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Touker Suleyman...

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The woman who turned her passion for food and drink

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into a multi-million pound business empire, Sarah Willingham...

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..and the man who sold his online greetings card business

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for £120 million, Nick Jenkins.

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For entrepreneurs, it's the toughest business pitch of their lives.

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Do they have what it takes to face the Dragons?

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Welcome back to Dragons' Den, where, once again,

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the doors are open to entrepreneurs desperate to secure a cash injection

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from a multimillionaire Dragon investor.

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Coming up on tonight's show...

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Bring those feet wide. Sit back.

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This is the only thing that you have.

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This is a worthless piece of paper.

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-LAUGHTER

-You look like Harry Hill trying to get fit in the living room!

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DEBORAH LAUGHS

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Unless you've got the IP,

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everyone is just going to sit here and rip you apart.

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It's a bit like inventing a smoke alarm with a snooze button.

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There's not really any point.

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You said Zumba is limited to its limited pool

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of only 100,000 instructors - that's peanuts compared with

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how many instructors you've got on your books, isn't it?

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I'm going to make you an offer, and it is for all of the money,

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on the terms that you have asked for,

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because I think it would be kind of rude not to.

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First into the Den is Caner Veli.

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He's a former financier from the City who's hoping

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that entrepreneurial success is all in the name.

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Caner is spelt C-A-N-E-R. It's Turkish, in fact.

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It means "full of life", so I'm trying to

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maximise it as much as I can.

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From my research, Touker is a good man, he's Turkish Cypriot,

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so hopefully we could have a good chat over a Turkish coffee one time.

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It could...go very well, actually.

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Hello, everyone.

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My name's Caner Veli, and I'm the founder of Liquiproof.

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I'm here today to seek £100,000 in return for 5% of my business.

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Liquiproof produces advanced nanotech coatings

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for almost any surface.

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We're best known for our innovative

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and award-winning footwear protection.

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It is invisible, eco-friendly, non-toxic, non-hazardous,

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non-flammable and odourless.

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Let me show you how amazing it is.

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WATER TRICKLES

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Liquiproof will not affect the look, feel or breathability,

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and as you can see...

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..liquids simply bead up and roll off.

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Even on this suede shoe.

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So we recently launched a range of fabric coatings which are suitable

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for larger garments, such as suits, jackets, hats,

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carpets, upholstery.

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Together, we can make Liquiproof a household name.

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THE DRAGONS CHUCKLE

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Thank you.

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That's brilliant.

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Londoner Caner Veli is looking for £100,000

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for just 5% of his business.

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The pitch may have been worthy of Dragon applause,

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but with a company valuation of £2 million,

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he'll need to prove his business is watertight.

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Touker Suleyman wants to know if they're speaking the same language.

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-Caner Veli, right?

-Merhaba.

-Merhaba.

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-Sen Turk musum?

-Nasilsin.

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-Are you Turkish?

-Yeah, my father's Turkish Cypriot.

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-Turkish Cypriot?

-Yeah.

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Oh, I'm Turkish Cypriot.

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OK. What's your background?

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-I studied pharmaceutical science when I was at university.

-Right.

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Went on to sales, business development,

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and then exactly prior to this, I was a head-hunter in the City,

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in the insurance district.

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And I...

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er...fairly clumsy...

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so go to lunch and have a couple of glasses of wine,

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inevitably would go down my tie,

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or even walking from a meeting, I'd get caught in the English weather,

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so ruin my suede shoes, so I started the business from there.

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What patent do you have for this?

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So, personally, myself, I've partnered with the R&D lab

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that owns the patent to this, so I have sole exclusive rights

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for the use of this technology within a number of markets.

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So this is not your technology,

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you've just got the contract with these people.

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-Correct, yes, partnership.

-What happens if tomorrow they take this

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and go to somebody else that's going to really take it worldwide,

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and you're a small guy and you're squeezed out?

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Well, then, that's...you know, bad business. We've got a partnership,

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so it's something where I've built the relationship with the supplier.

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-So you're asking us to buy into that relationship.

-Yeah.

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We've never met them, we don't know them.

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Unless you've got the IP,

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everyone is just going to sit here and rip you apart.

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The IP for this is the brand.

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We've already won awards, we're doing very well.

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So YOU'VE come up with the name Liquiproof.

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That's mine, it's a worldwide trademark.

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I own everything to do with Liquiproof.

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-Apart from the contents in it.

-Correct.

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-Have you got your contract here?

-The contract is...is always evolving.

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We can...tweak it and change.

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So who would like to have a look at this first?

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It started out so well, but the revelation that Caner doesn't own

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the intellectual property on the product

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has tarnished a so-far squeaky-clean presentation.

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And now, Peter Jones wants to take the entrepreneur to task

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over the company's price tag.

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Caner, you've put quite a big valuation on the business,

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-£2 million.

-Correct.

-Um... Just give me your thought process with that...

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-OK.

-..when you don't own the proprietary IP to the product.

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-That's a good question, um...

-Thank you.

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So the way I see that is that we make money,

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we supply businesses, we can continue to make money.

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And how much money have you made to date?

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You want... OK, so, year one we turned over 96K,

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gross of 53,500 and net of 35,500.

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The year to date, which is seven months, 213,000 turnover,

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gross of 140-odd.

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I went on 10 times.

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-10 times revenue is your valuation?

-As we...stand today, but backed up

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with the fact that we've got a high growth potential going forward.

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Give me one example of any company since you were born

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that you've heard of that has sold for 10 times revenue.

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OK, I know WhatsApp sold for 30 billion with zero revenue.

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TOUKER LAUGHS

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And what's the difference between WhatsApp and your product?

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They had a large database of potential customers.

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Was that over 100 million?

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Yeah.

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-How many customers have you got?

-Oh...

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-Not...not a million!

-No.

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This business is no question worth even several hundred thousand pounds.

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-OK.

-So I'm going to say that I'm out.

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A racy valuation that can't be backed up by profit.

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Caner's financial revelations have led to an irritated Peter Jones

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declining the deal.

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And it doesn't look like his paperwork holds any answers

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to the £2 million question either.

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It's not a licensing agreement -

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it's a distribution agreement, really,

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that's giving you distribution in certain territories,

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which is worldwide for most things - military dress uniform is UK only,

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and specifically for footwear, military dress, hat industry.

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But how they would overcome that

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is they don't supply you with the goods for a month.

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You can't force them to supply you, they just say...

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Actually, under my understanding of distribution law,

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er...you can't just suddenly stop supplying.

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They can come up with all the reasons in the world. "Sorry, my machine's broken, I'm not..."

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But they have to give us... they have to give me notice.

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Well, you've got 20 days, you're right, you've got 20 days.

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I mean, how would... How would you...work with that, sort of...

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Well, you'd have a proper distribution licence.

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We can...we can work it out.

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Did a lawyer write this?

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-I...put the majority of that together personally.

-OK.

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And I had it sort of glanced over by a family friend who doesn't...

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That's not their expertise, and the right wording...

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And diligence clearly not being one, noting that there are three parties at the top of this agreement -

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you've got three parties in the middle, and you've only got two at the bottom.

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If you're going to ask for a two million valuation,

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spend a couple of grand on your contract.

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Lawyers exist for a reason.

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This is the only thing that you have, it's the only thing.

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And that's something that I...want to...

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Taking your point across, I knew that was something that needed to be looked at.

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This is a worthless piece of paper, it really is.

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What you are is a salesman of a really funky liquid,

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but this isn't a business, um...

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Next time you do this, do it properly. I'm afraid I'm out.

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Nick Jenkins proves that cutting corners in business

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won't win investment in the Den.

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And after such an impressive pitch,

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Sarah Willingham is now feeling a little short-changed.

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Caner, I have to say, your demonstration at the top of this pitch was absolutely brilliant.

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When you stood there and poured a bottle of red wine over you...

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It was the first pitch I've clapped at, anyway.

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I mean, it was great!

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You've got such a great product,

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-I think you would have had us queueing up. Honestly, I really, really do.

-Yeah.

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But unfortunately, you don't really have a business.

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I'm out.

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There's two fatal errors you've made here.

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One is the contract.

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But secondly, your valuation is...

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off the scale.

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OK, so the valuation was based on where we're going with this business.

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Yeah, but it doesn't go anywhere without that.

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-I understand, but I'm...

-That agreement there is

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the thing that will place the value on your business.

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That piece of paper you made up, and you're saying it's worth £2 million.

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You made it up!

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I'm out.

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An incredulous Deborah Meaden makes it four Dragons down.

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Caner's only hope lies with the global fashion magnate,

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Touker Suleyman.

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How will he feel about stumping up £100,000 for just 5% of the company?

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-I sell a lot of shirts...

-Yeah.

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..to a lot of people in this country and worldwide, suits, the same.

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Have you ever worked out what it would cost a metre of fabric

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-to have this coating on a metre of fabric?

-Yes.

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-What?

-It would work out about four pence.

-Four pence.

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So my fabrics probably come from one of the biggest mills in the world,

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and they probably make millions of metres of fabric,

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so there is a potential here.

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My only concern is you don't own it.

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And my only concern is what's in that contract.

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But I'm going to make you an offer.

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There are some conditions on the offer,

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only because of the contract.

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That's understandable, yeah.

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I want...

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..my lawyers, in conjunction with yourself,

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-tying up an agreement that secures us to grow this business.

-Yeah.

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But I want us to be equal partners, 50/50.

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So I'll give you all the money for 50%, but it has to be

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subject to sorting the contract out properly, so we're all secured.

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I, um...

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Let's do this.

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-Great. OK.

-Well done.

-Great.

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Well done.

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Job done.

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We'll make money out of this.

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He may have given away a whopping 45% more equity than he planned,

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but in Touker Suleyman,

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he's secured a well-connected multimillionaire investor.

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When Touker put the offer on the table, it sort of overwhelmed me

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and shocked me, but I also knew that he could take us

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to where we needed to be.

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I don't know whether to pour that bottle of wine over you before or after the spray goes on.

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-TOUKER LAUGHS

-Rename it Toukerproof!

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THEY LAUGH

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The connections he has within the industry is amazing,

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so I think, you know, that it's a good deal.

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Next up, an exercise app that promises to shake up

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the way we work out.

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-Here we go.

-Good luck, boys.

-Good luck.

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Getting investment from any of the Dragons would be huge for us

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because it would validate the business, and it would mean

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that we can then take it to the next level,

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which is what we're keen to do.

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But will the Dragons be keen to sign up to this innovative business?

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Hello, Dragons. I'm Dom and this is Matt,

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and we're from Wireless Fitness,

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where our aim is to become the world's biggest brand

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in outdoor exercise.

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Using wireless technology and our unique Wireless Fitness app,

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we've created the concept of doing outdoor exercise classes to music.

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We're here today to try and raise £100,000

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in return for a 15% share in our company.

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Now, with the help of our fabulous instructor Tanya,

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we'd like to demo the equipment, but we'd like your help to do so.

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Would you guys mind wearing a pair of headphones each?

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If you put it around that way.

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There's a volume control on the bottom.

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-MUSIC PLAYS THROUGH HEADPHONES

-Tanya's got yours.

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-The music's on, so do we...?

-Hello, Dragons!

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-Can you...

-I want to get you up for a quick and easy workout,

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if you'd like to join us.

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-LAUGHTER

-Fantastic!

-Fantastic, stretching it out already!

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All right, can we all hear my voice? Good.

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All right, now bring those feet wide. Good.

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Weight in the heels, hands up, sit back.

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Nice! Looking good!

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Now we're going to add a little twist.

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Just reach opposite hand to foot, warming up through the back,

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hips, knees and ankles.

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Well done. Thank you very much.

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You can take a seat and your headphones off. Thank you very much.

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LAUGHTER

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-Thank you very much!

-Whoo!

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The Wireless Fitness system allows fitness instructors to deliver

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everyone's favourite music-based exercise classes

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in any location without disturbing other local residents.

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The result - a portable exercise studio.

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We've been trading using the existing system

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we've just demonstrated for two years now.

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However, we've taken things one step further

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by developing the Wireless Fitness app.

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The app streams the music and the voice of the instructor

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to the phones of the participants,

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who listen in using their own headphones.

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The app also processes class payments, allows the instructor

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to organise their fitness programmes,

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and drives traffic to their classes.

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We charge an 8% transaction fee on this,

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and on an average class cost of £6, this equates to 48p per transaction.

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With this in mind, we calculate a year-three turnover of £4.8 million.

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We'd like to thank Tanya for her help.

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-We welcome any questions you may have.

-Thank you very much.

-Thank you.

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A pitch to get the blood pumping from Dom Thorpe and Matt Boyles,

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who are seeking £100,000 for a 15% share of their outdoor exercise app.

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But will any of the Dragons think their business

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is in a good enough shape to invest?

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Sarah Willingham is first with the questions.

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-Dom, Matt, hi - Sarah.

-Hi, Sarah.

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Um, when you first walked in and you said,

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"We've created the concept of doing outdoor exercise to music,"

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I thought, "Ey-up, they haven't done that."

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But, kind of, as it progressed, I get the fact that this is

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-all about... It just all happens within your ears.

-Absolutely.

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So what are we investing in - are we investing in the future

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of the app or the future of the headphone business?

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-In theory, the future of the app, because...

-Not in theory,

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cos actually, you are stood here pitching, so...

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-Apologies.

-..in reality!

-Apologies, yes.

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So, we're asking you to invest in the app,

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so for further development, cos that's where we see

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the business going for the future.

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The raison d'etre, if I may be posh,

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is to make fitness instructors more successful.

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We've had people running 50, 60 people on Clapham Common in London.

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50% had seen a class taking place,

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come up, taken a flyer, then come back the next week.

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The instructors can save on marketing costs,

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and the exposure for brands is potentially massive.

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We are actually in the process of developing a deal with Zumba,

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a billion-dollar business, I'm sure you know.

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The beauty of it is that working with us,

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they instantly have infinitely more locations,

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they can also have happier instructors who are making

0:19:330:19:36

more money, working fewer hours, and having bigger classes.

0:19:360:19:39

Talk of a potential partnership with a global fitness phenomenon

0:19:410:19:45

could elevate Matt and Dom's business to the big time.

0:19:450:19:48

But something's not working out for Nick Jenkins.

0:19:500:19:53

Why would Zumba do business with you

0:19:570:19:59

when in fact they could develop an app that does this?

0:19:590:20:01

Cos they're limited by their own pool of...er, instructors...

0:20:010:20:05

Which is... Sorry, and how big is... How many instructors are there?

0:20:050:20:08

-It's estimated at 100,000.

-About 100,000?

0:20:080:20:11

OK, and how many instructors have you got?

0:20:110:20:13

-Well...

-Well, they're not...

-100,000 potential instructors,

0:20:130:20:16

-soon-to-be assimilated...

-No, no, no, sorry, you said Zumba

0:20:160:20:19

is limited to its limited pool of only 100,000 instructors -

0:20:190:20:22

that's peanuts compared with how many instructors you've got on your books, isn't it?

0:20:220:20:26

-Yes...

-I mean, they're going to be...I could be chomping at the bit to do this deal. So...

0:20:260:20:30

So what do you offer Zumba?

0:20:300:20:33

-More exposure, opportunities...

-You don't offer more exposure.

0:20:330:20:36

They're a massive multi-million-pound business!

0:20:360:20:39

How many Zumba classes did you see on the way to work this morning?

0:20:390:20:42

-Um...

-LAUGHTER

0:20:440:20:46

-None!

-To be honest...

-Cos they're all in the studio.

0:20:460:20:48

..I was looking at my phone all the way. I didn't notice and it was raining.

0:20:480:20:51

The traffic that drives to our Wireless Fitness pilot

0:20:510:20:53

all came from people seeing classes take place,

0:20:530:20:55

and an outdoor class is exposed

0:20:550:20:57

infinitely more than an indoor class.

0:20:570:21:00

Despite intense interrogation,

0:21:040:21:06

the entrepreneurial personal trainers are convinced

0:21:060:21:09

their outdoor model will attract attention

0:21:090:21:12

and therefore reap rewards.

0:21:120:21:14

But can its technology stand up to Peter Jones's scrutiny?

0:21:140:21:18

Where are you with the app at the moment?

0:21:210:21:23

So, what we've got is a skeleton framework which will combine,

0:21:230:21:27

or merge my voice and the music that I'm playing,

0:21:270:21:30

and then stream that via the cloud or 3G to a user's phone.

0:21:300:21:35

And what happens if I'm not in an area where I've got full 3G coverage?

0:21:350:21:39

That's absolutely, er, the consideration,

0:21:390:21:42

so the instructors will have to research not only 3G strength

0:21:420:21:46

or 4G strength, but also surface, location, things like that.

0:21:460:21:49

-I think this is a major flaw for your concept.

-OK.

0:21:490:21:53

You're going to have, in some areas, and there are -

0:21:540:21:56

it's very well known, some people will be on an O2 network

0:21:560:21:59

-and it works, some people will have EE and it doesn't.

-Mm.

0:21:590:22:02

Some people will be on Vodafone and it works, some people will be

0:22:020:22:05

on Three and it doesn't, and they're in the same location.

0:22:050:22:07

Well, we're talking about the prototype launch of the app this year.

0:22:070:22:11

The full launch of the app probably wouldn't be until 2016.

0:22:110:22:14

Yes, there are blackspots at the moment,

0:22:140:22:16

but that will be worked on to improve coverage.

0:22:160:22:18

The entrepreneurs have kept their cool so far, but they are now

0:22:200:22:24

forced to admit that the success of their business hangs on the UK's

0:22:240:22:28

sometimes patchy network coverage getting significantly better.

0:22:280:22:32

Does Deborah Meaden think it's a risk worth taking?

0:22:330:22:37

I don't pretend to be an expert in this field at all.

0:22:380:22:43

But I completely understand how this would work.

0:22:440:22:47

What's put me off is that I'm not particularly technically savvy.

0:22:490:22:53

Peter is concerned about it.

0:22:550:22:57

If Peter's concerned about it, I'm concerned about it,

0:22:570:22:59

because he's technologically... he knows a lot more than I do.

0:22:590:23:02

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

0:23:040:23:06

There are parts of this that I really like.

0:23:110:23:13

What I really like is you offering an independent trainer

0:23:130:23:17

and mechanism whereby anybody turning up within

0:23:170:23:20

the vicinity of their class can press a button and they pay.

0:23:200:23:24

So you have to pay to play.

0:23:240:23:26

What do you think, to you, is the lifetime value of a customer,

0:23:260:23:30

ie, someone attending that class?

0:23:300:23:32

-Good question.

-Mm.

0:23:330:23:34

I don't know the answer to that, but we expect it would be

0:23:340:23:37

the lifetime value of any customer

0:23:370:23:39

attending an ordinary aerobics class, so...

0:23:390:23:42

No, no, cos you're only making 48p.

0:23:420:23:43

So what's your 12-month value?

0:23:450:23:47

What's the 12-month value of a customer to you?

0:23:470:23:50

Yeah, er... I don't know the answer to that, I'm afraid,

0:23:500:23:53

cos we've focused on the revenue out from the instructor's perspective.

0:23:530:23:57

-Can I tell you where I am?

-Yeah.

-Um...

0:24:020:24:04

I think the platform for personal trainers is very interesting.

0:24:050:24:10

But I'm afraid you haven't demonstrated that you can

0:24:100:24:14

make the most of this opportunity yet.

0:24:140:24:17

-But I hope you do something with it.

-Thank you.

-But I'm out.

-Thank you.

0:24:170:24:21

-Dom, Matt.

-Hello.

-Hi, guys, I'm Touker.

0:24:240:24:28

You guys look great.

0:24:280:24:29

You're very presentable, you're probably great trainers.

0:24:290:24:32

However, I think you should definitely stay with your day job.

0:24:320:24:35

There's a lot of, "I don't know the answer to that."

0:24:360:24:40

As far as myself investing in this,

0:24:410:24:45

you've got more chance

0:24:450:24:48

of seeing me doing a marathon than you've got me investing in that.

0:24:480:24:53

So, guys, I'm terribly sorry, I'm not going to invest. I'm out.

0:24:530:24:58

-Thank you.

-Thank you.

0:24:580:24:59

Rejection from a third Dragon.

0:25:010:25:04

But Sarah Willingham and Peter Jones are still in the game.

0:25:060:25:10

It's a bit disappointing you didn't come here with the right tech

0:25:120:25:15

and the understanding of how you're going to implement it,

0:25:150:25:18

because I might have been interested in this.

0:25:180:25:20

I don't want to risk £100,000 of my capital,

0:25:200:25:23

and I think you're going to make a lot of mistakes along the way.

0:25:230:25:27

So I'm not going to invest, and say that I'm out.

0:25:270:25:29

-Thank you.

-Thank you.

-Appreciate your feedback.

0:25:290:25:32

Only Sarah Willingham now remains.

0:25:360:25:38

Can she see past the concerns and invest in the app?

0:25:380:25:43

I think it's a really neat idea.

0:25:450:25:48

Well, actually, what I should say is,

0:25:500:25:53

-I think there's a really neat idea in there.

-OK.

0:25:530:25:56

This is about trying to get people outside

0:25:560:26:00

to do classes that doesn't...

0:26:000:26:02

You can do it with specific people in specific locations at the moment,

0:26:020:26:06

but there's not a hub.

0:26:060:26:08

So I completely get that, and I actually think...

0:26:080:26:11

It's going to take a lot of marketing and a lot of spend

0:26:110:26:14

to get that awareness out there, but there is a model in there.

0:26:140:26:17

Unfortunately, what you've come here and presented is,

0:26:210:26:26

it's way too much of a punt.

0:26:260:26:28

-It's not for me, guys. I'm out.

-Thank you.

-Thank you.

-Bye-bye.

0:26:290:26:33

No deal for Dom and Matt.

0:26:350:26:38

As all the Dragons agreed, their exercise app

0:26:380:26:41

has a long way to go before it's ready for investment.

0:26:410:26:44

How do you think that went?

0:26:470:26:48

-What do you think?

-Could have been worse.

0:26:480:26:51

Could have been worse.

0:26:510:26:53

The amount you'd have to throw in to grow the customer base is colossal.

0:26:530:26:57

You could throw millions at it!

0:26:580:27:00

So the Dragons weren't sold on hi-tech fitness,

0:27:080:27:11

but maybe a familiar face with a more low-tech version of working out

0:27:110:27:16

might get a warmer reception.

0:27:160:27:18

Peter Ashley had visited the Den before,

0:27:200:27:23

with his armchair exercise machine.

0:27:230:27:26

But he's been back to the drawing board and has now returned,

0:27:260:27:29

with an all-new improved version, this time to ease executive stress.

0:27:290:27:34

We are the inventors of a new exercise system

0:27:350:27:39

which can be placed onto a wheelchair

0:27:390:27:42

or an ordinary office chair.

0:27:420:27:44

And, um, office stress is one of

0:27:450:27:48

the biggest health problems in this country at this moment of time.

0:27:480:27:53

They were looking for £55,000 for 15% equity

0:27:540:27:58

in their EasyX chair company.

0:27:580:28:01

But Peter Jones was more interested in easing a growing sense of deja vu.

0:28:010:28:05

-I've seen you before.

-I think so, Peter, yes, yes.

0:28:070:28:11

It's a walking machine, not a running machine.

0:28:110:28:13

It was probably, I think, the funniest moment ever

0:28:140:28:18

-in the Den with Duncan.

-With Duncan Bannatyne.

0:28:180:28:20

-You're frightening the life out of me!

-LAUGHTER

0:28:200:28:24

This time, it was Touker Suleyman

0:28:240:28:26

who put Peter's latest invention through its paces.

0:28:260:28:29

LAUGHTER

0:28:290:28:31

You look like Harry Hill, trying to get fit in the living room.

0:28:310:28:34

LAUGHTER

0:28:340:28:35

The office chair looks like something out of 50 Shades.

0:28:350:28:39

But, sadly, none of the Dragons could see Peter's chairs

0:28:390:28:43

in the boardrooms of Britain.

0:28:430:28:44

It's a bit like inventing a smoke alarm with a snooze button.

0:28:440:28:48

-Uh, smoke alarms...

-There's not really any point.

0:28:490:28:51

But before Peter took a brisk walk out of the Den,

0:28:510:28:55

Touker Suleyman wanted to know more about the man behind the machine.

0:28:550:28:59

Are you doing anything else apart from this?

0:29:000:29:03

Well, I am a psychotherapist and hypnotherapist.

0:29:030:29:05

Do you really do hypnotism, Peter?

0:29:050:29:07

-Do I?

-Yeah.

-Yes, of course.

0:29:070:29:09

But he wasn't able to put the Dragons under his spell,

0:29:090:29:13

and it was left to Deborah Meaden to once again

0:29:130:29:16

quash Peter's business dreams.

0:29:160:29:19

Please, wake up. It is not going to happen.

0:29:190:29:22

Please, do not do this thing, because it is not going anywhere.

0:29:220:29:26

I'm out.

0:29:280:29:29

Peter, good luck. It is genuinely lovely to see you,

0:29:290:29:32

-you're a very funny guy.

-Thank you.

-Thank you.

-Thank you very much.

0:29:320:29:35

-Goodbye.

-Good luck.

0:29:350:29:36

-You can breathe now though, yeah?

-Oh, my goodness me.

0:29:420:29:45

It didn't work out for Peter,

0:29:470:29:48

but will any of these ambitious entrepreneurs

0:29:480:29:52

be in with a chance of unlocking some Dragon cash?

0:29:520:29:55

All of those doors that you've slogged so hard to open,

0:29:550:30:00

one of us could open like...

0:30:000:30:02

..that.

0:30:030:30:04

It's quite bizarre, it's like the thing that you kind of

0:30:040:30:07

dream of happening. It's almost too good to be true.

0:30:070:30:10

-Can you just pinch me.

-Yeah.

0:30:100:30:12

Company valuations are often a thorny issue in the Den.

0:30:150:30:19

We've already seen one entrepreneur tonight

0:30:190:30:22

torn apart on his £2 million valuation.

0:30:220:30:25

Well, our next entrepreneur, a former figure skater from Russia,

0:30:250:30:28

has put an equally high price on her business.

0:30:280:30:31

So is she skating on thin ice with the Dragons?

0:30:310:30:35

As far as figure skating is concerned,

0:30:390:30:41

it does prepare you for life in terms of hard work

0:30:410:30:45

and discipline and determination.

0:30:450:30:47

I, um, probably can only compare the level of intensity

0:30:470:30:53

to setting up my own fresh food business.

0:30:530:30:57

You do everything and you focus on getting there.

0:30:570:31:00

Hello.

0:31:140:31:15

My name is Natasha Bowes

0:31:150:31:17

and I'm here to introduce you to kefir.

0:31:170:31:20

Kefir is a miracle food that my company, Bio-tiful Dairy -

0:31:220:31:27

it's like beautiful only bio -

0:31:270:31:29

has been producing and distributing in the UK for the last two years.

0:31:290:31:33

Kefir is the tastiest way to support your wellbeing.

0:31:350:31:38

I grew up on this drink

0:31:400:31:42

and I have missed it so much since I left Moscow 16 years ago.

0:31:420:31:46

It has a long list of proven health benefits,

0:31:470:31:51

it has about 40 different types of beneficial bacterium,

0:31:510:31:55

compared to yoghurt that has one or two.

0:31:550:31:57

Hundreds of millions of people drink this product every day

0:31:580:32:02

across Russia, eastern Europe, Scandinavia, big parts of Asia,

0:32:020:32:07

and now it's huge in America as well.

0:32:070:32:09

The investment proposition, taking 10% in the business,

0:32:090:32:13

and putting £250,000 in.

0:32:130:32:17

Thank you very much for your attention,

0:32:170:32:19

and I would love to share our products with you.

0:32:190:32:23

Muscovite Natasha Bowes is seeking £250,000

0:32:240:32:29

for a 10% stake in her business.

0:32:290:32:32

Thank you.

0:32:330:32:34

She believes her take on this traditional Russian drink

0:32:340:32:37

can become the next British health craze.

0:32:370:32:39

Thank you.

0:32:390:32:41

And her product appears to have brought out

0:32:410:32:43

the nostalgic in Nick Jenkins.

0:32:430:32:46

Natasha. Hello, I'm Nick. This also takes me back a little bit, um,

0:32:480:32:54

to when I was a student in the Kievskii Gosudarstvenny

0:32:540:32:56

Pedagogicheskii Institut Inostrannykh Yazykov...

0:32:560:32:59

Very impressive!

0:32:590:33:00

..where kefir was introduced to me.

0:33:000:33:02

The first thing that we did with it when we got presented with it,

0:33:020:33:05

it came in cartons,

0:33:050:33:06

we dropped it out of the eighth floor of the obshchezhitiye window,

0:33:060:33:09

um, to see what mess it would make on the pavement outside.

0:33:090:33:12

It explodes in a big, white splosh.

0:33:120:33:15

But after that, subsequently when I started working,

0:33:150:33:17

I spent eight years living in Moscow,

0:33:170:33:19

so I have had a lot of kefir in my time.

0:33:190:33:21

Would you be able to just explain a little bit about why it's different

0:33:210:33:25

from other yoghurty-type products that are available?

0:33:250:33:29

Beyond the age of three or so,

0:33:300:33:32

we cannot really absorb milk very well...

0:33:320:33:35

-Yeah.

-..as human beings.

0:33:350:33:37

Because it is cultured milk or fermented milk,

0:33:370:33:40

we can actually absorb the minerals from the milk,

0:33:400:33:44

the calcium, phosphorous, magnesium,

0:33:440:33:46

much better than we can from the normal milk.

0:33:460:33:49

I actually like it with my palate,

0:33:490:33:52

but I'm not sure the mass-market are going to go for it,

0:33:520:33:56

because it's a very difficult one for

0:33:560:33:59

our palate, that's actually been brought up with a sweeter tooth...

0:33:590:34:03

..I think, wrongly, but we have been - fact.

0:34:040:34:08

And this is going to need a lot of money spent on

0:34:080:34:10

not the marketing of your product,

0:34:100:34:13

but the marketing of the principle of somebody drinking this.

0:34:130:34:17

All the points you are making are super valid.

0:34:170:34:19

The point, though, is that

0:34:190:34:21

without any significant marketing budget at all...

0:34:210:34:24

-Mmm.

-..I've grown it over ten times, over 2014,

0:34:240:34:27

and I've grown it further now.

0:34:270:34:29

Natasha deflects Sarah Willingham's concerns that her product

0:34:320:34:36

won't indulge the nation's collective sweet tooth.

0:34:360:34:39

Now, Touker Suleyman wants answers

0:34:410:34:44

on where this product sits in the marketplace.

0:34:440:34:47

-What does that cost?

-£1.99.

-£1.99.

-Mm.

0:34:500:34:54

Now, if you put that in a place like Sainsbury's,

0:34:550:35:00

next to the other smoothies,

0:35:000:35:01

how does that compare to an average smoothie in price?

0:35:010:35:04

-I'm in the price bracket, indeed.

-It's within the price bracket?

0:35:040:35:07

And it's a premium product. As far as premium product is concerned,

0:35:070:35:10

it is absolutely in the price bracket.

0:35:100:35:13

Which is your biggest retail outlet?

0:35:130:35:14

My two biggest customers are Ocado and Realfood Organic.

0:35:140:35:19

My customers also include Whole Foods,

0:35:190:35:22

Planet Organic, Selfridges, Harrods, Fortnum and Mason... Et cetera.

0:35:220:35:28

Have you ever tried to get into a big supermarket?

0:35:280:35:30

I have spoken to one national chain.

0:35:310:35:34

-Yes.

-Um, that is, which brand is most consistent with

0:35:340:35:39

-the premium branding of my product.

-Who is that chain?

0:35:390:35:43

I don't know if I'm in, um...

0:35:430:35:45

..if it's ethical for me to be naming it,

0:35:460:35:49

given that it's not my customer yet.

0:35:490:35:51

So you want me to invest and then you'll tell me later?

0:35:510:35:54

-I have told you who my current customers are...

-OK.

0:35:540:35:57

..and I'm also explaining what's...

0:35:570:36:00

It's entirely ethical to say, they'll be talking to

0:36:000:36:02

hundreds of other people.

0:36:020:36:03

They're not going to bother about you mentioning their name.

0:36:030:36:07

And I think you kind of have to, don't you?

0:36:070:36:09

You know, for us to evaluate, is this a real proposition?

0:36:100:36:13

Is it somewhere we can help? Is it somebody I know in there?

0:36:130:36:17

You know, we've kind of gotta know.

0:36:170:36:19

It's Waitrose.

0:36:190:36:20

It took a while to get there, but Natasha finally opens up

0:36:240:36:28

about those all-important supermarket leads.

0:36:280:36:30

But Peter Jones wants to get to grips with what's propping up

0:36:320:36:36

this business's £2.5 million valuation.

0:36:360:36:40

Natasha. The last 12 months, what's been your revenue?

0:36:440:36:48

Um, the revenue is 218. Thousand pounds, obviously!

0:36:480:36:54

So, £218,000, and what was your net profit?

0:36:540:36:57

Uh, it's actually finished exactly at zero,

0:36:570:37:01

as I was reinvesting all the money I was generating.

0:37:010:37:04

OK, so you didn't make any money.

0:37:040:37:06

-OK.

-Deliberately.

0:37:060:37:08

You deliberately ran the business not to make money.

0:37:080:37:10

Because I reinvested, I wanted to make sure that

0:37:100:37:13

I invest as much as possible into the further growth of the business,

0:37:130:37:16

because of its great potential.

0:37:160:37:18

So, 218,000 revenue,

0:37:180:37:21

zero profit.

0:37:210:37:24

And...

0:37:240:37:26

..you value your company at £2.5 million.

0:37:270:37:30

That's not quite the statement that I would make,

0:37:320:37:35

because I do not look to sell my company.

0:37:350:37:37

-You do.

-No.

-That's what you're doing now.

0:37:370:37:40

-No, because...

-Well, you're selling part of your company to me,

0:37:400:37:44

or trying to. For an amount of money.

0:37:440:37:46

And you're asking me to invest in your business

0:37:460:37:48

at a valuation of two-and-a-half million,

0:37:480:37:50

and yet your business isn't worth anything at the moment.

0:37:500:37:53

I would disagree that it's not worth anything,

0:37:530:37:56

and also, I am not insisting or requiring

0:37:560:37:59

that you invest in my business.

0:37:590:38:01

I am putting a proposition forward,

0:38:010:38:03

and if you do not agree or you do not find it attractive,

0:38:030:38:06

then of course you do not have to invest.

0:38:060:38:09

Natasha's take it or leave it approach

0:38:110:38:14

to Peter Jones's interrogation over her valuation

0:38:140:38:17

has left the Den's longest-serving Dragon

0:38:170:38:20

uncharacteristically speechless.

0:38:200:38:22

Will food expert Sarah Willingham be persuaded to put her cash into kefir?

0:38:240:38:29

I totally get it, and I love what you've created, honestly.

0:38:310:38:35

You are preaching to the converted.

0:38:350:38:37

But I am not converted on the valuation,

0:38:370:38:39

because to value a business at two-and-a-half million,

0:38:390:38:41

which didn't make any money,

0:38:410:38:43

that only turned over 200 grand last year,

0:38:430:38:45

is... I don't even know what to say to that.

0:38:450:38:48

-It's crazy.

-I...

-Because the value is to come.

0:38:480:38:52

So maybe if you came back in three or four years and said,

0:38:520:38:54

"Look, I've just turned over a million

0:38:540:38:57

"and I've made 200 grand bottom line" or "400 grand bottom line"...

0:38:570:39:01

And I completely take your point and I can understand it, 100%,

0:39:010:39:04

-sitting on your side of the table.

-Yes.

0:39:040:39:07

But on my side of the table, I've invested three years into this...

0:39:070:39:10

-Yeah.

-..of my life, my money, my everything.

-Yeah.

0:39:100:39:13

And I know exactly how huge the potential in this business is.

0:39:130:39:18

However, you're not there yet.

0:39:180:39:20

And that's the problem.

0:39:200:39:21

As an investment for me,

0:39:220:39:24

it's not one that I'm going to be able to participate in.

0:39:240:39:27

I'm out.

0:39:270:39:28

Natasha.

0:39:290:39:30

I think this is a good product.

0:39:300:39:33

But I think, unfortunately, only 2% of the UK population

0:39:330:39:36

will really appreciate why it's a good product,

0:39:360:39:38

so you're going to have a problem explaining that.

0:39:380:39:41

And what you haven't done yet

0:39:410:39:43

is demonstrate that you can break this

0:39:430:39:45

out of a tiny niche, into significant sales.

0:39:450:39:48

For that reason, I'm out.

0:39:480:39:50

Two Dragons declare themselves out.

0:39:520:39:55

But Deborah Meaden isn't ready to give up on Natasha just yet.

0:39:570:40:02

All of those doors that you've slogged so hard to open,

0:40:060:40:11

one of us could open like...

0:40:110:40:13

..that.

0:40:140:40:15

And you need, if in a situation like this,

0:40:160:40:19

to place value on that.

0:40:190:40:22

My valuation is what I'm putting forward as the proposition.

0:40:220:40:26

Proposition and the backstop are two different things.

0:40:260:40:31

And I didn't say it was an absolute take it or leave it,

0:40:320:40:35

it's what I wanted to defend as a proposition.

0:40:350:40:39

Waiting that people would make a reasonable offer,

0:40:390:40:43

that they consider to be reasonable, that I can react to.

0:40:430:40:46

That's not the impression you gave. But is that true?

0:40:480:40:51

Well, I'm Russian, so...

0:40:510:40:53

LAUGHTER

0:40:530:40:55

OK.

0:40:560:40:57

Let's play this one out, let's see.

0:40:570:40:59

I'll make you an offer.

0:41:020:41:03

My end of it is that I would have somebody working with you who was

0:41:050:41:10

absolutely right for this, and with absolutely the right connections.

0:41:100:41:14

Um, and I'm going to offer you all of the money.

0:41:150:41:18

And I want 45% of the business.

0:41:200:41:23

I wouldn't, um, accept that offer.

0:41:360:41:38

20% would be the absolute maximum I would go for.

0:41:410:41:45

I'm sorry, at 20%, the valuation is crazy.

0:41:450:41:50

I fully understand.

0:41:520:41:53

OK.

0:41:550:41:57

I'm afraid I'm out.

0:41:570:41:59

A Dragon deal rejected.

0:42:020:42:05

Natasha's sticking to her guns to ensure

0:42:050:42:08

her company's valuation remains intact.

0:42:080:42:10

Deborah Meaden's deal knocked almost £2 million off the business.

0:42:120:42:16

Is Touker Suleyman ready to better her proposition?

0:42:160:42:20

Natasha.

0:42:230:42:24

I think you rejected a very good offer.

0:42:260:42:28

If I had made an offer it would be very similar.

0:42:300:42:32

But it's very apparent that's not where you want to be.

0:42:340:42:37

And, for that reason, I'm out.

0:42:380:42:42

Natasha.

0:42:440:42:46

Investors will look to back the right people,

0:42:470:42:49

and I think you are the right person.

0:42:490:42:51

You're tenacious, you're determined, and the blood, sweat and tears

0:42:510:42:55

that you've put into developing it, that's admirable.

0:42:550:42:58

So you're incredibly investable on one hand.

0:43:000:43:02

But you've made yourself uninvestable on the other

0:43:050:43:08

by such a ridiculous valuation.

0:43:080:43:10

I think you really need to reset any expectation

0:43:110:43:14

if you want to raise or get an investor on board.

0:43:140:43:18

So I can't even get to the point about the product

0:43:180:43:21

because I think it would be a waste of time.

0:43:210:43:23

So that's why I'm not going to invest, and say that I'm out.

0:43:230:43:26

Thank you.

0:43:270:43:28

Natasha's self belief won the praise of Peter Jones

0:43:310:43:34

but she couldn't convince the Dragons of her company's worth,

0:43:340:43:38

and she leaves the Den empty handed.

0:43:380:43:41

I'm surprised you made an offer, even tried it.

0:43:410:43:44

-Really?

-Yeah.

-I'll tell you what I think her problem is,

0:43:440:43:47

she's looking at this

0:43:470:43:49

as though we're ordinary "fire and forget" investors.

0:43:490:43:52

It's just difference of opinion on the value.

0:43:530:43:56

One has to make a business decision

0:43:560:43:59

and that was the decision for both sides in the end.

0:43:590:44:02

Our last entrepreneur to step into the Den is Deepak Tailor.

0:44:140:44:18

He's turned his talent for bagging a bargain into a business.

0:44:180:44:22

I am just about to go into the Den and I am confident.

0:44:250:44:27

I think the Dragons are going to love my company, they're going to

0:44:270:44:30

love what we do and they're going to,

0:44:300:44:32

hopefully, believe in the vision.

0:44:320:44:33

My name is Deepak Tailor, I'm looking for a £50,000 investment

0:44:450:44:49

in return for 10% equity in my company.

0:44:490:44:51

Now, a few years ago I was spending a lot of time on the internet

0:44:510:44:54

trying to learn about ways to save money,

0:44:540:44:57

and I came across these freebie websites.

0:44:570:44:59

They were places where you could order free samples of products,

0:44:590:45:01

things like make-up and food,

0:45:010:45:03

and I began using these sites regularly.

0:45:030:45:05

I quickly became disappointed by the selections available on their sites.

0:45:050:45:09

I felt like they focused far too much on advertising

0:45:090:45:12

rather than giving the consumer what they want,

0:45:120:45:14

which was real, free products.

0:45:140:45:15

So, instead, I created Latest Free Stuff

0:45:150:45:18

as an innovative platform to connect consumers to retailers.

0:45:180:45:22

I'll show you how easy it is to use the website.

0:45:220:45:25

Say a consumer wants to order this shampoo.

0:45:250:45:28

They click on the "get freebie" button...

0:45:280:45:31

..and it loads up the brand's website.

0:45:320:45:34

They fill in their details and submit the form

0:45:340:45:37

and the brand will post a sample directly to the user's house.

0:45:370:45:41

It's that easy.

0:45:410:45:42

Now, the website is not only the perfect platform

0:45:430:45:46

for consumers to try before they buy,

0:45:460:45:47

but also for brands to launch brand awareness

0:45:470:45:50

for their new marketing campaigns.

0:45:500:45:52

We get paid a small commission for products and services

0:45:530:45:57

offered from our partners

0:45:570:45:59

and we've already partnered with large companies

0:45:590:46:03

including Vodafone, O2, Uber, Amazon and many more.

0:46:030:46:06

We attract over 300,000 visitors a month

0:46:060:46:09

and we've got an e-mail database of over 140,000 users.

0:46:090:46:13

We are now the UK's largest freebie website.

0:46:130:46:15

And with the Dragons' investment and expertise,

0:46:150:46:19

I am hoping to grow the website even further.

0:46:190:46:22

Thank you for listening, I welcome any questions you may have.

0:46:220:46:25

Super-saver Deepak Tailor is here to raise £50,000

0:46:280:46:32

for 10% of his website that puts free stuff at your fingertips.

0:46:320:46:37

But will his company pass muster

0:46:390:46:41

with the Den's consumer champion, Sarah Willingham?

0:46:410:46:44

I write a lot about stuff like this, I've got loads of blogs,

0:46:460:46:50

and we do a lot of freebie stuff.

0:46:500:46:53

So it's a space I know pretty well.

0:46:530:46:55

It is such a tough space.

0:46:550:46:58

Very, very heavily populated. But, I mean,

0:46:590:47:02

300,000 visitors per month is impressive.

0:47:020:47:04

So you must have a pretty decent margin.

0:47:050:47:08

The projected profit for this year is 200,000.

0:47:080:47:13

What is the actual for last year?

0:47:140:47:17

Um, last year's revenue was £250,000,

0:47:170:47:22

with a net profit of...130,000.

0:47:220:47:26

What's your balance sheet look like?

0:47:280:47:30

At the moment we've got about 150,000 in the bank.

0:47:300:47:34

And we've never spent money on advertising, either,

0:47:350:47:38

it's just grown.

0:47:380:47:39

So your marketing budget or spend on paid-for search

0:47:390:47:43

or anything in total, last year was how much?

0:47:430:47:45

Um, zero.

0:47:450:47:46

Because we've had exclusive deals.

0:47:470:47:49

And that's the key reason for it growing so big.

0:47:490:47:52

Wow.

0:47:540:47:56

Deepak,

0:47:570:47:58

do you have any other investors involved in the business?

0:47:580:48:01

Um, no, I've never really needed investment,

0:48:010:48:04

I've always just had the goal of

0:48:040:48:07

keeping things slim and lean

0:48:070:48:09

and trying to reinvest the profits

0:48:090:48:12

into the website and grow it step by step.

0:48:120:48:14

And it's latestfreestuff.com?

0:48:140:48:17

-Yeah. You own the portal.

-I own it, yeah.

0:48:170:48:19

Yeah.

0:48:190:48:21

It's almost, it's quite bizarre.

0:48:210:48:23

It's like the thing that you kind of dream of happening

0:48:230:48:27

is finding somebody that comes into the Den

0:48:270:48:29

that's got 150,000 in the bank,

0:48:290:48:31

has created a website that's really, really good,

0:48:310:48:34

is offering a fairly good deal... It's almost too good to be true.

0:48:340:48:38

Here.

0:48:390:48:40

Profit he can be proud of, a website that's already a big hit

0:48:420:48:46

and sole ownership.

0:48:460:48:48

It looks like Deepak has all the elements for success.

0:48:480:48:51

Which has left Deborah Meaden feeling puzzled

0:48:520:48:54

as to why he's here in the first place.

0:48:540:48:57

Deepak, what are you looking for from an investor?

0:49:000:49:03

A problem at the moment is around 90% of the site is not monetised.

0:49:030:49:08

10% of the offers are monetised,

0:49:080:49:09

and that's where the revenue is coming from.

0:49:090:49:11

What do you mean by non-monetised product?

0:49:110:49:15

So, if I show you the website again, um,

0:49:150:49:17

the Garnier shampoo at the top.

0:49:170:49:19

Garnier aren't paying us for every customer who orders from there.

0:49:190:49:23

Right, but the reason you put it on the site is because it adds content.

0:49:230:49:27

-That's correct.

-OK.

-It adds value and gets people to come back.

0:49:270:49:30

So 90% of your product drives content and 10% you're being paid,

0:49:300:49:34

and what you're...what you need to do with the business

0:49:340:49:37

is get more paid-for content.

0:49:370:49:40

The problem we're having when we're talking

0:49:400:49:42

to advertisers at the moment, when I set up the site,

0:49:420:49:44

I wanted to create an open platform.

0:49:440:49:46

So we don't have any registration pages,

0:49:460:49:48

we don't have any login pages.

0:49:480:49:50

To move to a next level,

0:49:500:49:51

we would need to know who these consumers are,

0:49:510:49:53

um, what they're interested in,

0:49:530:49:56

so we could get specific deals for specific companies in the UK.

0:49:560:50:00

Ah, OK, OK. I mean I... Right, I can see where you need the help now.

0:50:000:50:05

Deepak, before you go off that.

0:50:050:50:06

Nick, I actually think there is an issue with login,

0:50:060:50:09

because on the free sites,

0:50:090:50:13

people worry about being bombarded with offers.

0:50:130:50:15

I would disagree with that, because it's a question of the trade-off.

0:50:150:50:19

If you're someone who regularly goes in for free offers,

0:50:190:50:22

at some point you have to tell them where to send the stuff to.

0:50:220:50:25

If you can understand

0:50:250:50:27

how often a typical user will come back

0:50:270:50:29

and understand that pattern of their visits

0:50:290:50:31

and on what they're ordering...

0:50:310:50:33

..that is gold dust.

0:50:340:50:36

An e-commerce masterclass for Deepak, as online expert Nick Jenkins

0:50:370:50:42

identifies that failure to collect customer data

0:50:420:50:45

will slow success.

0:50:450:50:47

While Touker Suleyman is pondering

0:50:480:50:50

how to take this freebie website to the big-time.

0:50:500:50:54

You've got two problems.

0:50:550:50:57

One, you want more traffic, and two, you want more goods.

0:50:580:51:02

You know, and I can see exactly what could be done here.

0:51:020:51:05

It's very much knowing the marketing directors directly with the brands.

0:51:050:51:09

And that's exactly what I think a Dragon can bring.

0:51:090:51:12

It's about getting more brands in there.

0:51:120:51:15

I could be the Dragon

0:51:150:51:18

that could open doors for you.

0:51:180:51:19

I can be the one that can make the call and say,

0:51:190:51:22

"This is who I want to target, how do we get there?"

0:51:220:51:25

There's a lot I can offer you.

0:51:250:51:26

I am going to make you an offer.

0:51:310:51:32

So I'm offering you all the money,

0:51:340:51:37

you'll have access to me...

0:51:370:51:39

..on a daily basis.

0:51:400:51:41

Nine developers in-house.

0:51:430:51:45

I'm offering you a new platform,

0:51:450:51:47

so your website can take whatever users go on there.

0:51:470:51:51

I will deal with your strategy,

0:51:510:51:54

but I want 20%.

0:51:540:51:55

Retail king Touker Suleyman wastes no time

0:51:590:52:02

staking his claim on the company.

0:52:020:52:05

He's offering links to some big-brand names,

0:52:050:52:07

but at 20%, he's asking for double the equity.

0:52:070:52:12

Will Peter Jones turn his admiration for this business

0:52:120:52:16

into an offer of investment?

0:52:160:52:18

This is my game, I'm in this game, I have a lot of developers.

0:52:220:52:26

And if I was to actually think about it for a moment...

0:52:260:52:29

..I don't think it's that difficult to invest £40,000 or £50,000

0:52:310:52:35

and have something that's quite superior to what you have today.

0:52:350:52:39

I was quite weirdly, and it felt like a bit of a dream,

0:52:420:52:44

because I'm kind of thinking, "It's impressive, it's brilliant,"

0:52:440:52:47

for all of the reasons. But if you're in this game

0:52:470:52:51

it's actually not that difficult.

0:52:510:52:53

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

0:52:540:52:57

Praise for Deepak, but tech tycoon Peter Jones can't get over the fact

0:52:590:53:04

that the website can be easily copied

0:53:040:53:06

by anyone with a bit of software savvy.

0:53:060:53:09

With those doubts hanging in the air, consumer champion Sarah Willingham

0:53:100:53:14

has come to her own decision.

0:53:140:53:16

I've got to tell you, I'm really excited.

0:53:190:53:22

Really excited. Because you have done it,

0:53:220:53:26

actually, all the right ways.

0:53:260:53:29

And you just totally get your business.

0:53:290:53:31

And actually, all you need, really,

0:53:310:53:34

is a bit more support plugged in around you

0:53:340:53:36

in the right directions, and you'll fly!

0:53:360:53:38

I work extremely closely with a lot of the major discount sites,

0:53:380:53:43

and there are parts of your business that could easily slot into that.

0:53:430:53:47

So I would also like to make you an offer.

0:53:470:53:50

But I think my magic number, in terms of percentage...

0:53:530:53:57

..is 15%.

0:53:580:53:59

And I was going to say 20, and it feels greedy now to say that,

0:54:010:54:04

because I don't want to be greedy, because I think you've

0:54:040:54:07

created something great and I don't want to take too much away from you.

0:54:070:54:10

So that would be all of the money for 15% of the business.

0:54:100:54:14

Despite Peter Jones's scepticism, Deepak gets a second, better offer,

0:54:170:54:22

for 5% less of the business than sought by Touker Suleyman.

0:54:220:54:26

Time for Nick Jenkins to make up his mind.

0:54:270:54:29

My concern is that this is all driven by search,

0:54:330:54:37

and that the number of people

0:54:370:54:40

who are looking for free stuff is not necessarily going to grow.

0:54:400:54:44

And the question really is how much more noise you can make

0:54:440:54:47

than the next guy, that I just don't know how

0:54:470:54:49

I could increase that organic search engine traffic.

0:54:490:54:52

So, because I can't see how I can help with that,

0:54:520:54:55

I'm afraid I'm going to be out.

0:54:550:54:57

But I take my hat off to you for what you've built so far.

0:54:570:55:00

Thank you.

0:55:000:55:01

Deepak, I see this very much as a, er...

0:55:050:55:10

a platform that looks like a free platform

0:55:100:55:14

offering product to a consumer,

0:55:140:55:17

but, actually, if you can get the platform right,

0:55:170:55:20

is a campaign tool, and that's how you get more product.

0:55:200:55:26

In terms of marketing and partnership expertise,

0:55:270:55:30

I get the consumer journey.

0:55:300:55:34

I completely understand where the money is made on this

0:55:340:55:38

and the shape that this has to be.

0:55:380:55:40

So I am going to make you an offer and it is for all of the money.

0:55:400:55:43

And I am going to offer you the money

0:55:440:55:46

on the terms that you have asked for,

0:55:460:55:48

because I think it would be kind of rude not to.

0:55:480:55:50

All of the money for 10% of the business.

0:55:540:55:57

I think I need a minute, I think.

0:56:020:56:04

The entrepreneur now has three propositions to consider.

0:56:070:56:11

Deborah Meaden's 10% equity bid matches Deepak's original offer.

0:56:110:56:17

However, 15% buys him Sarah Willingham's industry experience

0:56:170:56:21

and 20% guarantees him access to Touker Suleyman's retail contacts.

0:56:210:56:27

Um...

0:56:300:56:31

So, I think I've made my decision.

0:56:340:56:37

Um, I would like to accept...

0:56:420:56:44

-..Deborah's offer.

-I'm delighted, Deepak!

0:56:460:56:49

-I'm very pleased indeed.

-Thank you.

-Well done.

0:56:490:56:52

Deepak has done it.

0:56:520:56:54

His self-assured performance has

0:56:540:56:56

won him a valuable partner in Deborah Meaden.

0:56:560:56:59

I think you had a premonition,

0:56:590:57:00

because you have Deborah on your website!

0:57:000:57:02

Yay!

0:57:030:57:05

He leaves with the respect of the Den and £50,000 of investment.

0:57:050:57:10

Deborah was definitely the right person.

0:57:120:57:15

We need to attract more brands into our platform.

0:57:160:57:19

I think she was the best placed to make that possible.

0:57:190:57:22

That was the best decision I've ever made.

0:57:230:57:26

So, a thrilling finale to events in the Den,

0:57:380:57:41

which have all been about valuation.

0:57:410:57:44

Deborah Meaden thought Deepak had his bang-on when she invested

0:57:440:57:48

all the money for the exact amount of equity he was offering,

0:57:480:57:51

but Jana saw his £2 million valuation slashed

0:57:510:57:54

when he accepted Touker Suleyman's offer for half his business.

0:57:540:57:59

Two very different stories, but two very happy entrepreneurs.

0:57:590:58:04

Coming up next time...

0:58:040:58:07

The Dragons will be fine.

0:58:070:58:09

I believe that I have more time than any Dragon here.

0:58:090:58:13

You know nothing about your market.

0:58:130:58:15

You've answered the question already,

0:58:150:58:17

-don't carry on. Stop, stop.

-Yeah. Sorry.

0:58:170:58:19

Potentially, you could be a little bit

0:58:190:58:21

all over the place in life as well.

0:58:210:58:23

I'm not, I'm just very nervous, man.

0:58:230:58:25

I couldn't work with you.

0:58:250:58:27

I'm so sorry to say that.

0:58:280:58:30

I've got to tell you, I like it.

0:58:300:58:33

I think I'm going to make you an offer,

0:58:330:58:35

but it's going to be quite a ballsy offer.

0:58:350:58:38

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