Episode 11 Dragons' Den

Wealthy...

..astute...

innovative...

..fearless...

and shrewd.

These are the Dragons.

The heat is on in the Den.

Together with formidable business giants Peter Jones

and Deborah Meaden are...

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

Touker Suleyman...

The woman who turned her passion for food and drink

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

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

for £120 million, Nick Jenkins.

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

Do they have what it takes to face the Dragons?

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

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

from a multimillionaire Dragon investor.

Coming up on tonight's show...

Bring those feet wide. Sit back.

This is the only thing that you have.

This is a worthless piece of paper.

-LAUGHTER

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

DEBORAH LAUGHS

Unless you've got the IP,

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

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

There's not really any point.

You said Zumba is limited to its limited pool

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

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

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

on the terms that you have asked for,

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

First into the Den is Caner Veli.

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

that entrepreneurial success is all in the name.

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

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

maximise it as much as I can.

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

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

It could...go very well, actually.

Hello, everyone.

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

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

Liquiproof produces advanced nanotech coatings

for almost any surface.

We're best known for our innovative

and award-winning footwear protection.

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

non-flammable and odourless.

Let me show you how amazing it is.

WATER TRICKLES

Liquiproof will not affect the look, feel or breathability,

and as you can see...

..liquids simply bead up and roll off.

Even on this suede shoe.

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

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

carpets, upholstery.

Together, we can make Liquiproof a household name.

THE DRAGONS CHUCKLE

Thank you.

That's brilliant.

Londoner Caner Veli is looking for £100,000

for just 5% of his business.

The pitch may have been worthy of Dragon applause,

but with a company valuation of £2 million,

he'll need to prove his business is watertight.

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

-Caner Veli, right?

-Merhaba.

-Merhaba.

-Sen Turk musum?

-Nasilsin.

-Are you Turkish?

-Yeah, my father's Turkish Cypriot.

-Turkish Cypriot?

-Yeah.

Oh, I'm Turkish Cypriot.

OK. What's your background?

-I studied pharmaceutical science when I was at university.

-Right.

Went on to sales, business development,

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

in the insurance district.

And I...

er...fairly clumsy...

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

inevitably would go down my tie,

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

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

What patent do you have for this?

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

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

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

So this is not your technology,

you've just got the contract with these people.

-Correct, yes, partnership.

-What happens if tomorrow they take this

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

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

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

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

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

-Yeah.

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

Unless you've got the IP,

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

The IP for this is the brand.

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

So YOU'VE come up with the name Liquiproof.

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

I own everything to do with Liquiproof.

-Apart from the contents in it.

-Correct.

-Have you got your contract here?

-The contract is...is always evolving.

We can...tweak it and change.

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

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

the intellectual property on the product

has tarnished a so-far squeaky-clean presentation.

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

over the company's price tag.

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

-£2 million.

-Correct.

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

-OK.

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

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

-Thank you.

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

we supply businesses, we can continue to make money.

And how much money have you made to date?

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

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

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

gross of 140-odd.

I went on 10 times.

-10 times revenue is your valuation?

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

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

Give me one example of any company since you were born

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

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

TOUKER LAUGHS

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

They had a large database of potential customers.

Was that over 100 million?

Yeah.

-How many customers have you got?

-Oh...

-Not...not a million!

-No.

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

-OK.

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

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

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

declining the deal.

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

to the £2 million question either.

It's not a licensing agreement -

it's a distribution agreement, really,

that's giving you distribution in certain territories,

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

and specifically for footwear, military dress, hat industry.

But how they would overcome that

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

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

Actually, under my understanding of distribution law,

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

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

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

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

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

Well, you'd have a proper distribution licence.

We can...we can work it out.

Did a lawyer write this?

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

-OK.

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

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

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

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

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

spend a couple of grand on your contract.

Lawyers exist for a reason.

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

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

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

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

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

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

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

Nick Jenkins proves that cutting corners in business

won't win investment in the Den.

And after such an impressive pitch,

Sarah Willingham is now feeling a little short-changed.

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

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

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

I mean, it was great!

You've got such a great product,

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

-Yeah.

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

I'm out.

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

One is the contract.

But secondly, your valuation is...

off the scale.

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

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

-I understand, but I'm...

-That agreement there is

the thing that will place the value on your business.

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

You made it up!

I'm out.

An incredulous Deborah Meaden makes it four Dragons down.

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

Touker Suleyman.

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

-I sell a lot of shirts...

-Yeah.

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

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

-to have this coating on a metre of fabric?

-Yes.

-What?

-It would work out about four pence.

-Four pence.

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

and they probably make millions of metres of fabric,

so there is a potential here.

My only concern is you don't own it.

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

But I'm going to make you an offer.

There are some conditions on the offer,

only because of the contract.

That's understandable, yeah.

I want...

..my lawyers, in conjunction with yourself,

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

-Yeah.

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

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

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

I, um...

Let's do this.

-Great. OK.

-Well done.

-Great.

Well done.

Job done.

We'll make money out of this.

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

but in Touker Suleyman,

he's secured a well-connected multimillionaire investor.

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

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

to where we needed to be.

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

-TOUKER LAUGHS

-Rename it Toukerproof!

THEY LAUGH

The connections he has within the industry is amazing,

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

Next up, an exercise app that promises to shake up

the way we work out.

-Here we go.

-Good luck, boys.

-Good luck.

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

because it would validate the business, and it would mean

that we can then take it to the next level,

which is what we're keen to do.

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

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

and we're from Wireless Fitness,

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

in outdoor exercise.

Using wireless technology and our unique Wireless Fitness app,

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

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

in return for a 15% share in our company.

Now, with the help of our fabulous instructor Tanya,

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

Would you guys mind wearing a pair of headphones each?

If you put it around that way.

There's a volume control on the bottom.

-MUSIC PLAYS THROUGH HEADPHONES

-Tanya's got yours.

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

-Hello, Dragons!

-Can you...

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

if you'd like to join us.

-LAUGHTER

-Fantastic!

-Fantastic, stretching it out already!

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

All right, now bring those feet wide. Good.

Weight in the heels, hands up, sit back.

Nice! Looking good!

Now we're going to add a little twist.

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

hips, knees and ankles.

Well done. Thank you very much.

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

LAUGHTER

-Thank you very much!

-Whoo!

The Wireless Fitness system allows fitness instructors to deliver

everyone's favourite music-based exercise classes

in any location without disturbing other local residents.

The result - a portable exercise studio.

We've been trading using the existing system

we've just demonstrated for two years now.

However, we've taken things one step further

by developing the Wireless Fitness app.

The app streams the music and the voice of the instructor

to the phones of the participants,

who listen in using their own headphones.

The app also processes class payments, allows the instructor

to organise their fitness programmes,

and drives traffic to their classes.

We charge an 8% transaction fee on this,

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

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

We'd like to thank Tanya for her help.

-We welcome any questions you may have.

-Thank you very much.

-Thank you.

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

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

But will any of the Dragons think their business

is in a good enough shape to invest?

Sarah Willingham is first with the questions.

-Dom, Matt, hi - Sarah.

-Hi, Sarah.

Um, when you first walked in and you said,

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

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

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

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

-Absolutely.

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

of the app or the future of the headphone business?

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

-Not in theory,

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

-Apologies.

-..in reality!

-Apologies, yes.

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

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

the business going for the future.

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

is to make fitness instructors more successful.

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

50% had seen a class taking place,

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

The instructors can save on marketing costs,

and the exposure for brands is potentially massive.

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

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

The beauty of it is that working with us,

they instantly have infinitely more locations,

they can also have happier instructors who are making

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

Talk of a potential partnership with a global fitness phenomenon

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

But something's not working out for Nick Jenkins.

Why would Zumba do business with you

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

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

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

-It's estimated at 100,000.

-About 100,000?

OK, and how many instructors have you got?

-Well...

-Well, they're not...

-100,000 potential instructors,

-soon-to-be assimilated...

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

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

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

-Yes...

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

So what do you offer Zumba?

-More exposure, opportunities...

-You don't offer more exposure.

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

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

-Um...

-LAUGHTER

-None!

-To be honest...

-Cos they're all in the studio.

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

The traffic that drives to our Wireless Fitness pilot

all came from people seeing classes take place,

and an outdoor class is exposed

infinitely more than an indoor class.

Despite intense interrogation,

the entrepreneurial personal trainers are convinced

their outdoor model will attract attention

and therefore reap rewards.

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

Where are you with the app at the moment?

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

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

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

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

That's absolutely, er, the consideration,

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

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

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

-OK.

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

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

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

-Mm.

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

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

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

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

Yes, there are blackspots at the moment,

but that will be worked on to improve coverage.

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

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

sometimes patchy network coverage getting significantly better.

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

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

But I completely understand how this would work.

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

Peter is concerned about it.

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

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

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

There are parts of this that I really like.

What I really like is you offering an independent trainer

and mechanism whereby anybody turning up within

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

So you have to pay to play.

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

ie, someone attending that class?

-Good question.

-Mm.

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

the lifetime value of any customer

attending an ordinary aerobics class, so...

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

So what's your 12-month value?

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

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

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

-Can I tell you where I am?

-Yeah.

-Um...

I think the platform for personal trainers is very interesting.

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

make the most of this opportunity yet.

-But I hope you do something with it.

-Thank you.

-But I'm out.

-Thank you.

-Dom, Matt.

-Hello.

-Hi, guys, I'm Touker.

You guys look great.

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

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

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

As far as myself investing in this,

you've got more chance

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

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

-Thank you.

-Thank you.

Rejection from a third Dragon.

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

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

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

because I might have been interested in this.

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

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

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

-Thank you.

-Thank you.

-Appreciate your feedback.

Only Sarah Willingham now remains.

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

I think it's a really neat idea.

Well, actually, what I should say is,

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

-OK.

This is about trying to get people outside

to do classes that doesn't...

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

but there's not a hub.

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

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

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

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

it's way too much of a punt.

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

-Thank you.

-Thank you.

-Bye-bye.

No deal for Dom and Matt.

As all the Dragons agreed, their exercise app

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

How do you think that went?

-What do you think?

-Could have been worse.

Could have been worse.

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

You could throw millions at it!

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

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

might get a warmer reception.

Peter Ashley had visited the Den before,

with his armchair exercise machine.

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

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

We are the inventors of a new exercise system

which can be placed onto a wheelchair

or an ordinary office chair.

And, um, office stress is one of

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

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

in their EasyX chair company.

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

-I've seen you before.

-I think so, Peter, yes, yes.

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

It was probably, I think, the funniest moment ever

-in the Den with Duncan.

-With Duncan Bannatyne.

-You're frightening the life out of me!

-LAUGHTER

This time, it was Touker Suleyman

who put Peter's latest invention through its paces.

LAUGHTER

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

LAUGHTER

The office chair looks like something out of 50 Shades.

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

in the boardrooms of Britain.

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

-Uh, smoke alarms...

-There's not really any point.

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

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

Are you doing anything else apart from this?

Well, I am a psychotherapist and hypnotherapist.

Do you really do hypnotism, Peter?

-Do I?

-Yeah.

-Yes, of course.

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

and it was left to Deborah Meaden to once again

quash Peter's business dreams.

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

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

I'm out.

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

-you're a very funny guy.

-Thank you.

-Thank you.

-Thank you very much.

-Goodbye.

-Good luck.

-You can breathe now though, yeah?

-Oh, my goodness me.

It didn't work out for Peter,

but will any of these ambitious entrepreneurs

be in with a chance of unlocking some Dragon cash?

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

one of us could open like...

..that.

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

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

-Can you just pinch me.

-Yeah.

Company valuations are often a thorny issue in the Den.

We've already seen one entrepreneur tonight

torn apart on his £2 million valuation.

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

has put an equally high price on her business.

So is she skating on thin ice with the Dragons?

As far as figure skating is concerned,

it does prepare you for life in terms of hard work

and discipline and determination.

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

to setting up my own fresh food business.

You do everything and you focus on getting there.

Hello.

My name is Natasha Bowes

and I'm here to introduce you to kefir.

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

it's like beautiful only bio -

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

Kefir is the tastiest way to support your wellbeing.

I grew up on this drink

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

It has a long list of proven health benefits,

it has about 40 different types of beneficial bacterium,

compared to yoghurt that has one or two.

Hundreds of millions of people drink this product every day

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

and now it's huge in America as well.

The investment proposition, taking 10% in the business,

and putting £250,000 in.

Thank you very much for your attention,

and I would love to share our products with you.

Muscovite Natasha Bowes is seeking £250,000

for a 10% stake in her business.

Thank you.

She believes her take on this traditional Russian drink

can become the next British health craze.

Thank you.

And her product appears to have brought out

the nostalgic in Nick Jenkins.

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

to when I was a student in the Kievskii Gosudarstvenny

Pedagogicheskii Institut Inostrannykh Yazykov...

Very impressive!

..where kefir was introduced to me.

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

it came in cartons,

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

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

It explodes in a big, white splosh.

But after that, subsequently when I started working,

I spent eight years living in Moscow,

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

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

from other yoghurty-type products that are available?

Beyond the age of three or so,

we cannot really absorb milk very well...

-Yeah.

-..as human beings.

Because it is cultured milk or fermented milk,

we can actually absorb the minerals from the milk,

the calcium, phosphorous, magnesium,

much better than we can from the normal milk.

I actually like it with my palate,

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

because it's a very difficult one for

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

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

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

not the marketing of your product,

but the marketing of the principle of somebody drinking this.

All the points you are making are super valid.

The point, though, is that

without any significant marketing budget at all...

-Mmm.

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

and I've grown it further now.

Natasha deflects Sarah Willingham's concerns that her product

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

Now, Touker Suleyman wants answers

on where this product sits in the marketplace.

-What does that cost?

-£1.99.

-£1.99.

-Mm.

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

next to the other smoothies,

how does that compare to an average smoothie in price?

-I'm in the price bracket, indeed.

-It's within the price bracket?

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

it is absolutely in the price bracket.

Which is your biggest retail outlet?

My two biggest customers are Ocado and Realfood Organic.

My customers also include Whole Foods,

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

Have you ever tried to get into a big supermarket?

I have spoken to one national chain.

-Yes.

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

-the premium branding of my product.

-Who is that chain?

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

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

given that it's not my customer yet.

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

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

-OK.

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

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

hundreds of other people.

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

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

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

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

You know, we've kind of gotta know.

It's Waitrose.

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

about those all-important supermarket leads.

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

this business's £2.5 million valuation.

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

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

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

Uh, it's actually finished exactly at zero,

as I was reinvesting all the money I was generating.

OK, so you didn't make any money.

-OK.

-Deliberately.

You deliberately ran the business not to make money.

Because I reinvested, I wanted to make sure that

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

because of its great potential.

So, 218,000 revenue,

zero profit.

And...

..you value your company at £2.5 million.

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

because I do not look to sell my company.

-You do.

-No.

-That's what you're doing now.

-No, because...

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

or trying to. For an amount of money.

And you're asking me to invest in your business

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

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

I would disagree that it's not worth anything,

and also, I am not insisting or requiring

that you invest in my business.

I am putting a proposition forward,

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

then of course you do not have to invest.

Natasha's take it or leave it approach

to Peter Jones's interrogation over her valuation

has left the Den's longest-serving Dragon

uncharacteristically speechless.

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

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

You are preaching to the converted.

But I am not converted on the valuation,

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

which didn't make any money,

that only turned over 200 grand last year,

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

-It's crazy.

-I...

-Because the value is to come.

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

"Look, I've just turned over a million

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

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

-sitting on your side of the table.

-Yes.

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

-Yeah.

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

-Yeah.

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

However, you're not there yet.

And that's the problem.

As an investment for me,

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

I'm out.

Natasha.

I think this is a good product.

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

will really appreciate why it's a good product,

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

And what you haven't done yet

is demonstrate that you can break this

out of a tiny niche, into significant sales.

For that reason, I'm out.

Two Dragons declare themselves out.

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

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

one of us could open like...

..that.

And you need, if in a situation like this,

to place value on that.

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

Proposition and the backstop are two different things.

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

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

Waiting that people would make a reasonable offer,

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

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

Well, I'm Russian, so...

LAUGHTER

OK.

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

I'll make you an offer.

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

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

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

And I want 45% of the business.

I wouldn't, um, accept that offer.

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

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

I fully understand.

OK.

I'm afraid I'm out.

A Dragon deal rejected.

Natasha's sticking to her guns to ensure

her company's valuation remains intact.

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

Is Touker Suleyman ready to better her proposition?

Natasha.

I think you rejected a very good offer.

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

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

And, for that reason, I'm out.

Natasha.

Investors will look to back the right people,

and I think you are the right person.

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

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

So you're incredibly investable on one hand.

But you've made yourself uninvestable on the other

by such a ridiculous valuation.

I think you really need to reset any expectation

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

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

because I think it would be a waste of time.

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

Thank you.

Natasha's self belief won the praise of Peter Jones

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

and she leaves the Den empty handed.

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

-Really?

-Yeah.

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

she's looking at this

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

It's just difference of opinion on the value.

One has to make a business decision

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

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

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

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

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

love what we do and they're going to,

hopefully, believe in the vision.

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

in return for 10% equity in my company.

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

trying to learn about ways to save money,

and I came across these freebie websites.

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

things like make-up and food,

and I began using these sites regularly.

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

I felt like they focused far too much on advertising

rather than giving the consumer what they want,

which was real, free products.

So, instead, I created Latest Free Stuff

as an innovative platform to connect consumers to retailers.

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

Say a consumer wants to order this shampoo.

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

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

They fill in their details and submit the form

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

It's that easy.

Now, the website is not only the perfect platform

for consumers to try before they buy,

but also for brands to launch brand awareness

for their new marketing campaigns.

We get paid a small commission for products and services

offered from our partners

and we've already partnered with large companies

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

We attract over 300,000 visitors a month

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

We are now the UK's largest freebie website.

And with the Dragons' investment and expertise,

I am hoping to grow the website even further.

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

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

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

But will his company pass muster

with the Den's consumer champion, Sarah Willingham?

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

and we do a lot of freebie stuff.

So it's a space I know pretty well.

It is such a tough space.

Very, very heavily populated. But, I mean,

300,000 visitors per month is impressive.

So you must have a pretty decent margin.

The projected profit for this year is 200,000.

What is the actual for last year?

Um, last year's revenue was £250,000,

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

What's your balance sheet look like?

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

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

it's just grown.

So your marketing budget or spend on paid-for search

or anything in total, last year was how much?

Um, zero.

Because we've had exclusive deals.

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

Wow.

Deepak,

do you have any other investors involved in the business?

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

I've always just had the goal of

keeping things slim and lean

and trying to reinvest the profits

into the website and grow it step by step.

And it's latestfreestuff.com?

-Yeah. You own the portal.

-I own it, yeah.

Yeah.

It's almost, it's quite bizarre.

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

is finding somebody that comes into the Den

that's got 150,000 in the bank,

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

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

Here.

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

and sole ownership.

It looks like Deepak has all the elements for success.

Which has left Deborah Meaden feeling puzzled

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

Deepak, what are you looking for from an investor?

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

10% of the offers are monetised,

and that's where the revenue is coming from.

What do you mean by non-monetised product?

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

the Garnier shampoo at the top.

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

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

-That's correct.

-OK.

-It adds value and gets people to come back.

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

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

is get more paid-for content.

The problem we're having when we're talking

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

I wanted to create an open platform.

So we don't have any registration pages,

we don't have any login pages.

To move to a next level,

we would need to know who these consumers are,

um, what they're interested in,

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

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

Deepak, before you go off that.

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

because on the free sites,

people worry about being bombarded with offers.

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

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

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

If you can understand

how often a typical user will come back

and understand that pattern of their visits

and on what they're ordering...

..that is gold dust.

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

identifies that failure to collect customer data

will slow success.

While Touker Suleyman is pondering

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

You've got two problems.

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

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

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

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

It's about getting more brands in there.

I could be the Dragon

that could open doors for you.

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

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

There's a lot I can offer you.

I am going to make you an offer.

So I'm offering you all the money,

you'll have access to me...

..on a daily basis.

Nine developers in-house.

I'm offering you a new platform,

so your website can take whatever users go on there.

I will deal with your strategy,

but I want 20%.

Retail king Touker Suleyman wastes no time

staking his claim on the company.

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

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

Will Peter Jones turn his admiration for this business

into an offer of investment?

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

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

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

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

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

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

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

it's actually not that difficult.

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

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

that the website can be easily copied

by anyone with a bit of software savvy.

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

has come to her own decision.

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

Really excited. Because you have done it,

actually, all the right ways.

And you just totally get your business.

And actually, all you need, really,

is a bit more support plugged in around you

in the right directions, and you'll fly!

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

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

So I would also like to make you an offer.

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

..is 15%.

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

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

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

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

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

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

Time for Nick Jenkins to make up his mind.

My concern is that this is all driven by search,

and that the number of people

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

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

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

I could increase that organic search engine traffic.

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

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

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

Thank you.

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

a platform that looks like a free platform

offering product to a consumer,

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

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

In terms of marketing and partnership expertise,

I get the consumer journey.

I completely understand where the money is made on this

and the shape that this has to be.

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

And I am going to offer you the money

on the terms that you have asked for,

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

All of the money for 10% of the business.

I think I need a minute, I think.

The entrepreneur now has three propositions to consider.

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

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

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

Um...

So, I think I've made my decision.

Um, I would like to accept...

-..Deborah's offer.

-I'm delighted, Deepak!

-I'm very pleased indeed.

-Thank you.

-Well done.

Deepak has done it.

His self-assured performance has

won him a valuable partner in Deborah Meaden.

I think you had a premonition,

because you have Deborah on your website!

Yay!

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

Deborah was definitely the right person.

We need to attract more brands into our platform.

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

That was the best decision I've ever made.

So, a thrilling finale to events in the Den,

which have all been about valuation.

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

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

but Jana saw his £2 million valuation slashed

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

Two very different stories, but two very happy entrepreneurs.

Coming up next time...

The Dragons will be fine.

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

You know nothing about your market.

You've answered the question already,

-don't carry on. Stop, stop.

-Yeah. Sorry.

Potentially, you could be a little bit

all over the place in life as well.

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

I couldn't work with you.

I'm so sorry to say that.

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

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

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