0:00:07 > 0:00:09Wealthy...
0:00:12 > 0:00:13..astute,
0:00:13 > 0:00:15innovative...
0:00:17 > 0:00:19..fearless
0:00:19 > 0:00:21and shrewd.
0:00:22 > 0:00:25These are the Dragons.
0:00:30 > 0:00:33The heat is on in the Den.
0:00:33 > 0:00:37Together with formidable business giants Peter Jones and Deborah Meaden
0:00:37 > 0:00:39are global fashion tycoon,
0:00:39 > 0:00:44with over 40 years' retail experience, Touker Suleyman...
0:00:45 > 0:00:48..the woman who turned her passion for food and drink
0:00:48 > 0:00:52into a multimillion-pound business empire, Sarah Willingham
0:00:52 > 0:00:56and the man who sold his online greetings card business
0:00:56 > 0:00:59for £120 million, Nick Jenkins.
0:01:01 > 0:01:05For entrepreneurs, it's the toughest business pitch of their lives.
0:01:07 > 0:01:10Do they have what it takes to face the Dragons?
0:01:16 > 0:01:18Welcome to Dragons' Den.
0:01:18 > 0:01:21Entrepreneurs continue to queue at the door to the Den,
0:01:21 > 0:01:25desperate to secure some Dragon capital.
0:01:25 > 0:01:28For the Dragons, it's the chance to pounce on a good deal
0:01:28 > 0:01:32and sometimes, if it's very good, each Dragon will have to fight
0:01:32 > 0:01:35for the right to take a slice of the business.
0:01:37 > 0:01:39Coming up on tonight's show...
0:01:40 > 0:01:43THE DRAGONS LAUGH
0:01:43 > 0:01:46- All that would cost you more than £1,000,000...- No, it won't.
0:01:46 > 0:01:48..to advertise, publicise it, whatever.
0:01:48 > 0:01:51We need to disagree on your statement.
0:01:51 > 0:01:53We can agree to disagree all day long.
0:01:53 > 0:01:58- That market, they post it online themselves.- No, they don't.- They DO!
0:01:58 > 0:02:00- No, they don't.- Yes, they do. - No, they don't.
0:02:00 > 0:02:02- They don't need this. - Of course they do.
0:02:02 > 0:02:05My heart always sinks when someone says,
0:02:05 > 0:02:06"I want your money to go global,"
0:02:06 > 0:02:09and you think, "You haven't even done Warrington yet."
0:02:10 > 0:02:15For you to come here today with this valuation for 5%, it's a joke!
0:02:20 > 0:02:24First into the Den, an entrepreneur hoping to convince the Dragons
0:02:24 > 0:02:27to snap up a share in his photography business.
0:02:27 > 0:02:29And if things start to go wrong,
0:02:29 > 0:02:32well, in that case, he has a cunning plan.
0:02:39 > 0:02:43I was, for a period of time, a professional singer.
0:02:43 > 0:02:47I could, if things are going badly, burst into song.
0:02:47 > 0:02:49It might shock them into doing something.
0:02:53 > 0:02:58# Summertime
0:02:58 > 0:03:03# And the living is easy... #
0:03:18 > 0:03:25Hi, my name is Dan Luxon and welcome to uShoot Studios.
0:03:25 > 0:03:31I am here today, looking for £50,000 for a 20% share in my business.
0:03:31 > 0:03:34We are unique,
0:03:34 > 0:03:39a product photography studio that doesn't need a photographer.
0:03:39 > 0:03:43About a year ago, I came across a company called StyleShoots
0:03:43 > 0:03:48and they make these extraordinary machines that you see beside me.
0:03:48 > 0:03:51These machines take high-resolution,
0:03:51 > 0:03:53high-quality product photography images
0:03:53 > 0:03:59and they deliver that in a matter of seconds, ready to upload online.
0:03:59 > 0:04:02StyleShoots, themselves, sell only to high-volume users
0:04:02 > 0:04:06and until I set up uShoot Studios, last year,
0:04:06 > 0:04:09there was no way that small or medium size companies
0:04:09 > 0:04:12could avail themselves of this extraordinary technology.
0:04:12 > 0:04:15uShoot Studios is based in Islington.
0:04:15 > 0:04:19We have 87 - 88, as of today - existing clients,
0:04:19 > 0:04:2340% of whom have already been back for seconds.
0:04:23 > 0:04:25We have a preferential relationship with StyleShoots,
0:04:25 > 0:04:27which puts us in the perfect position
0:04:27 > 0:04:31to corner the UK marketplace in the next 12 to 18 months.
0:04:31 > 0:04:35I'm here, today, to look for a Dragon or Dragons
0:04:35 > 0:04:38who have the influence and the contact base
0:04:38 > 0:04:41to catapult this business forwards
0:04:41 > 0:04:45and roll out through the UK and beyond, thereafter.
0:04:46 > 0:04:49I would very much like to ask Touker to come up
0:04:49 > 0:04:53and we'll see what the machines can do - if he's willing.
0:04:54 > 0:04:57So, if we head round the back. Watch your head.
0:04:57 > 0:05:01- So, this is operated from an iPad... - Mmm.
0:05:01 > 0:05:07..which acts through an app, basically just as a remote control.
0:05:07 > 0:05:11Then we've got a live screen there. If we do it... You've got...
0:05:11 > 0:05:15- Like that.- We tend to do most of these this way round.- Oh, right.
0:05:15 > 0:05:17Only just because you've got the length.
0:05:17 > 0:05:21Once you've got this in whatever way you're happy to shoot it,
0:05:21 > 0:05:24once it's turned blue, press the button.
0:05:25 > 0:05:28We've now got an indicative image, completely cut out,
0:05:28 > 0:05:30with no background at all.
0:05:30 > 0:05:33We're ready to take another one, if we want,
0:05:33 > 0:05:35but we'll have a look at what we've taken.
0:05:35 > 0:05:37- Shall I sit down now?- Absolutely.
0:05:37 > 0:05:41So, that is the pitch and I'll take any questions.
0:05:44 > 0:05:49An exuberant pitch from Dan Luxon, who is seeking £50,000
0:05:49 > 0:05:53in return for a 20% share of his product photography business.
0:05:55 > 0:05:59Dan may have resisted the temptation to burst into song,
0:05:59 > 0:06:00but even his speaking voice
0:06:00 > 0:06:04appears to have made an impression on Peter Jones.
0:06:07 > 0:06:09Dan.
0:06:09 > 0:06:11Um...you're pretty loud.
0:06:11 > 0:06:17- Thank you.- You're very excitable. - Mmm-hmm.- What is the business?
0:06:17 > 0:06:23The business is a string of photographic studios
0:06:23 > 0:06:26which is aimed at small and medium size businesses,
0:06:26 > 0:06:32where they come in and use the machinery on a frequent basis
0:06:32 > 0:06:37and what I'm looking to do is scale that across the UK,
0:06:37 > 0:06:39while I've got a first-mover advantage to do so.
0:06:39 > 0:06:43- But this product is already available.- Yes.
0:06:43 > 0:06:45- And you don't own it.- No.
0:06:47 > 0:06:51But I do have a relationship with the manufacturer
0:06:51 > 0:06:55and a meeting next week for anybody who wants to be involved
0:06:55 > 0:06:58to organise exactly what our preferential relationship will be.
0:06:58 > 0:07:02Anybody can do this. I could do this tomorrow.
0:07:03 > 0:07:05What's your turnover in the last 12 months?
0:07:05 > 0:07:08- We've only turned over £47,000 so far.- Ah, so, OK.
0:07:08 > 0:07:11What does that tell you about this business?
0:07:11 > 0:07:13What it tells me about this business,
0:07:13 > 0:07:15because the business will bring in £13,000 this month,
0:07:15 > 0:07:18is that the business is now turning itself.
0:07:18 > 0:07:20It is now breaking even and just moving into profit
0:07:20 > 0:07:23and that is on the basis of the clients that I've got IN this month
0:07:23 > 0:07:26and the pipeline of clients I've got coming back to me next month.
0:07:28 > 0:07:30With bookings increasing,
0:07:30 > 0:07:34it seems Dan's business is beginning to gain momentum.
0:07:34 > 0:07:39Having built HIS online company into a multimillion-pound concern,
0:07:39 > 0:07:44Nick Jenkins is keen to understand the potential size of Dan's market.
0:07:47 > 0:07:49How many companies have you identified
0:07:49 > 0:07:52who need to display these items online?
0:07:52 > 0:07:54Let's talk about fashion cos it could be anybody, really.
0:07:54 > 0:07:56In fashion, there's, I suppose,
0:07:56 > 0:08:01about 46,000 mainly independent retailers.
0:08:01 > 0:08:03OK, what do you think each of these, on average,
0:08:03 > 0:08:07- each of these companies has the potential to spend?- Um, £1,500.
0:08:07 > 0:08:09£1,500, OK.
0:08:09 > 0:08:12So, you're looking at, potentially, a £60 or 70 million spend...
0:08:12 > 0:08:14You'd never get them all but, yeah.
0:08:14 > 0:08:17..on photography by these types of companies.
0:08:17 > 0:08:20That's the size of the opportunity that we've identified.
0:08:20 > 0:08:22Then, of course, there's the problem of geographic spread,
0:08:22 > 0:08:25so you could probably cover quite a lot from London,
0:08:25 > 0:08:28but you'd need a network of these studios around.
0:08:28 > 0:08:31We do have people coming down from...
0:08:31 > 0:08:33We have people in Exeter, in York, in Northumberland.
0:08:33 > 0:08:37Once they get it and they see the benefits of doing it,
0:08:37 > 0:08:40they'll tend to send product along the way and then come on the train.
0:08:40 > 0:08:42So, your better bet would be two or three of these -
0:08:42 > 0:08:46Manchester, Birmingham, London, within regional centres.
0:08:46 > 0:08:49- People would drive in with their stuff.- Exactly.- OK.
0:08:52 > 0:08:53Food for thought,
0:08:53 > 0:08:57as Dan highlights the existence of a rich seam of potential custom.
0:08:59 > 0:09:00But is it a picture
0:09:00 > 0:09:03which fashion tycoon Touker Suleyman will recognise?
0:09:06 > 0:09:09I agree with you there's a big demand for this. I could give you...
0:09:09 > 0:09:16- We have about 200 to 300 new shirts a week.- Yes.- Every week.- Yes.
0:09:16 > 0:09:21So, if you charge me £10 each, what does that come to?
0:09:21 > 0:09:24- £2,000.- Absolutely. - Per week.- Mmm-hmm.
0:09:25 > 0:09:27- I'll take it. - I'm sure you'll take it.
0:09:27 > 0:09:30At the end of the day, if I came to you and saw that machine
0:09:30 > 0:09:34and I liked it, I'd say, "Well, I'll buy my own cos I'm big enough."
0:09:36 > 0:09:38I'm not aiming, in any way, at yourself.
0:09:38 > 0:09:41I'm aiming at the other 98% who are out there
0:09:41 > 0:09:44who are trading and HAVE to trade online now.
0:09:44 > 0:09:46They have no choice and they can't just take snaps
0:09:46 > 0:09:50because they don't look good, they can't compete,
0:09:50 > 0:09:52and so, what I'm doing, is giving those people
0:09:52 > 0:09:57the opportunity to use the technology that YOU will buy.
0:09:57 > 0:10:01- I think your model confuses me.- OK. - It's just not clear.
0:10:01 > 0:10:04I think you'll become a big PR for the machine
0:10:04 > 0:10:06- but you haven't got a business yet. - Mmm-hmm.
0:10:06 > 0:10:09On that basis, I can't invest in you, so I'm out.
0:10:12 > 0:10:16A major blow, as the Dragon who's a big player in fashion,
0:10:16 > 0:10:20the very industry Dan's appealing to, turns his back on a deal.
0:10:21 > 0:10:26Will Peter Jones, who has his own chain of high street camera stores,
0:10:26 > 0:10:29share the opinion that Dan's business lacks focus?
0:10:33 > 0:10:35I'm very confused here,
0:10:35 > 0:10:37because the larger companies and the organisations,
0:10:37 > 0:10:40they outsource this type of work and it is readily available,
0:10:40 > 0:10:48so your market is the mass-market, small, online, e-based reseller.
0:10:48 > 0:10:51And that market, they just, literally, take a snap photograph
0:10:51 > 0:10:54- and they post it online themselves. - No, they don't.
0:10:54 > 0:10:57- They DO!- No, they don't. - Yes, they do.- No, they don't.
0:10:57 > 0:10:59- They don't need this. - Of course they do.
0:11:01 > 0:11:03Peter, I'm sorry, let me try again.
0:11:04 > 0:11:09The majority of my clients have been doing exactly what you're saying.
0:11:09 > 0:11:10That's why they come to me.
0:11:10 > 0:11:13They come there because it's a pain in the arse
0:11:13 > 0:11:17to do that sort of photography. It takes time, it takes a lot of time.
0:11:17 > 0:11:19You don't get consistency.
0:11:19 > 0:11:22I don't believe that there is even a business here.
0:11:23 > 0:11:26For people that want to do this type of thing,
0:11:26 > 0:11:29they set it on white paper on the floor.
0:11:29 > 0:11:34It costs them £1 for the paper and they take a high-res picture
0:11:34 > 0:11:37which is uploaded to their camera
0:11:37 > 0:11:41and that's the reason I'm not going to invest and say that I'm out.
0:11:44 > 0:11:46A snappy exchange which ends
0:11:46 > 0:11:50with the photography entrepreneur losing his second Dragon.
0:11:52 > 0:11:55Will Deborah Meaden or Sarah Willingham see
0:11:55 > 0:11:57any more merit in the service he's offering?
0:12:00 > 0:12:03I actually think there IS a massive need for this in small businesses.
0:12:05 > 0:12:09But I don't think you've solved that need, I really don't, at all.
0:12:11 > 0:12:14You're just based in Islington and me in Stoke,
0:12:14 > 0:12:17I'm not going to get in the back of my lorry
0:12:17 > 0:12:21and drive all my kit down to take the photos.
0:12:21 > 0:12:23I'm either going to do it myself
0:12:23 > 0:12:26or I'm going to get a local photographer,
0:12:26 > 0:12:30who actually, is really, really good value.
0:12:30 > 0:12:31He'll come and take it.
0:12:31 > 0:12:37So, yeah, for that reason, I can't invest in it. I'm afraid I'm out.
0:12:38 > 0:12:43The big issue for me rolls right back to the beginning.
0:12:43 > 0:12:47You don't own the machinery,
0:12:47 > 0:12:50you haven't got an exclusive deal with the guys who are supplying it,
0:12:50 > 0:12:54so you, yourself, are entering a brand-new market
0:12:54 > 0:12:58and sometimes, the entrepreneur can say to me,
0:12:58 > 0:13:02"You've got to come with me because I am the only way of doing this."
0:13:02 > 0:13:05Sadly, you're not able to say that.
0:13:05 > 0:13:09So, I'm really sorry, but I won't be investing. I'm out.
0:13:12 > 0:13:15Four Dragons have walked away from the deal,
0:13:15 > 0:13:19each citing a different reason for their failure to invest.
0:13:21 > 0:13:25E-commerce pioneer Nick Jenkins is now Dan's best
0:13:25 > 0:13:29and, indeed, only hope of securing the £50,000
0:13:29 > 0:13:31his expansion plans demand.
0:13:32 > 0:13:36I do appreciate the value of good photography and good lighting,
0:13:36 > 0:13:38when it comes to selling something online.
0:13:38 > 0:13:40You spend a lot of money on a website,
0:13:40 > 0:13:43you spend a lot of money on creating a business
0:13:43 > 0:13:46and photography can sometimes really let that down,
0:13:46 > 0:13:48so I totally get the product.
0:13:48 > 0:13:54But there's nothing that you're offering that's exceptional,
0:13:54 > 0:13:58so I'm afraid, for that reason, I can't invest. I'm out.
0:13:58 > 0:14:01- Thank you.- Good luck, Dan. - Thank you, everybody.- Thank you.
0:14:03 > 0:14:07So, professional singer turned product photographer Dan
0:14:07 > 0:14:11- must leave the Den empty-handed... - God, that was frightening.
0:14:11 > 0:14:13..his close-up encounter with the Dragons
0:14:13 > 0:14:16having left him a little flat.
0:14:16 > 0:14:18It's a bit of a pounding you can take out there.
0:14:20 > 0:14:22But we will persevere and move on.
0:14:33 > 0:14:37Entrepreneurs bring all manner of new food and drink products
0:14:37 > 0:14:41into the Den, though many share the same retail dream.
0:14:41 > 0:14:43The next part of the strategy
0:14:43 > 0:14:46is that we really want to take the products to the supermarkets.
0:14:48 > 0:14:52Now is the time to invest because it's about to explode.
0:14:52 > 0:14:54Supermarkets need additional brands coming in
0:14:54 > 0:14:57cos they need leverage against the big brands.
0:14:57 > 0:15:01But it's a path to riches that's fraught with danger.
0:15:01 > 0:15:03You turning up to Tesco or Sainsbury's,
0:15:03 > 0:15:06you're never going to make it with this product.
0:15:06 > 0:15:08Everybody shoots for the supermarkets.
0:15:08 > 0:15:11I'm not sure that you're ready or suited.
0:15:12 > 0:15:15That is a hard, hard world you're going into.
0:15:15 > 0:15:19One of the big boys will come in and bulldoze you overnight.
0:15:22 > 0:15:26And just when you thought things couldn't get any tougher,
0:15:26 > 0:15:28our next entrepreneur is intent
0:15:28 > 0:15:32on taking on one of Britain's best-loved food brands
0:15:32 > 0:15:36and beating them at their own game on the supermarket shelves.
0:15:42 > 0:15:44Dragons, hi.
0:15:45 > 0:15:48My name's Ben Mason and I'm the founder of Masons Beans,
0:15:48 > 0:15:53which is the country's first ever fresh baked bean brand.
0:15:53 > 0:15:56I'm here, today, to ask you for £50,000
0:15:56 > 0:15:59in return for 10% equity in my business.
0:15:59 > 0:16:02But I want to tell you a little story first.
0:16:02 > 0:16:08It starts 129 years ago, in 1886, when a young man called Henry Heinz
0:16:08 > 0:16:10walked into Fortnum & Mason in London
0:16:10 > 0:16:13with a case of his baked bean products.
0:16:13 > 0:16:16Fortnum's bought the lot, becoming his first British customer.
0:16:16 > 0:16:18Seven months ago,
0:16:18 > 0:16:22I walked into Fortnum & Mason with a case of MY baked bean products.
0:16:22 > 0:16:26They're hand-cooked, one-pot meals, made fresh for your fridge.
0:16:27 > 0:16:30They're a really filling, hearty meal.
0:16:30 > 0:16:33Fortnum's bought the lot, becoming my first customer.
0:16:33 > 0:16:35So, why will this work?
0:16:35 > 0:16:38Well, every day, three million Brits eat baked beans.
0:16:38 > 0:16:41You see, we love baked beans, but our tastes are changing.
0:16:41 > 0:16:43Tinned baked beans are in decline,
0:16:43 > 0:16:46but premium chilled ready meals are absolutely booming.
0:16:46 > 0:16:50So, we're seven months in, we're also now in Selfridges
0:16:50 > 0:16:52and we're doing most of our volume through Ocado.
0:16:52 > 0:16:57Essentially, we're now ready and primed for growth in the multiples.
0:16:57 > 0:17:02All I need now is a Dragon on board to help me fund that growth,
0:17:02 > 0:17:05but also open some doors for me.
0:17:05 > 0:17:08- Who would like to try some beans? - THE DRAGONS:- Yes, please.- Excellent.
0:17:11 > 0:17:16An assured pitch from Ben Mason, who's seeking £50,000
0:17:16 > 0:17:21in return for a 10% equity stake in his own-brand baked beans.
0:17:21 > 0:17:23These are four different versions, are they?
0:17:23 > 0:17:26There's four different recipes, yes.
0:17:26 > 0:17:28Nick Jenkins wants to find out
0:17:28 > 0:17:31exactly how Ben's beans came into being.
0:17:33 > 0:17:37- Ben.- Yes.- Hi, I'm Nick. - Hi, Nick.- Great product.
0:17:37 > 0:17:39What made you make the leap into starting your own thing?
0:17:39 > 0:17:41Was there a eureka moment or...?
0:17:41 > 0:17:44I started cooking baked beans myself and getting into it
0:17:44 > 0:17:46and it made me realise how old-fashioned they are.
0:17:46 > 0:17:49I can't think of a single other thing in the supermarket
0:17:49 > 0:17:52that hasn't changed since the war, so that got me really excited,
0:17:52 > 0:17:55as an ideas' person, that there was an opportunity here.
0:17:55 > 0:17:58OK, and how big do you think that opportunity is?
0:17:58 > 0:18:01So, in three years' time, I believe we can get sales to ten million.
0:18:01 > 0:18:05That's based on looking at my current rate of sale with Ocado
0:18:05 > 0:18:09and looking at...extrapolating that out to the other retailers
0:18:09 > 0:18:11that I would like to pick off and get into.
0:18:13 > 0:18:16- What is your revenue so far? - So far, £25,000.
0:18:16 > 0:18:23We've sold 10,000 pots, revenue is £25,000 and a 20% gross profit.
0:18:23 > 0:18:26- Over what period?- Since September last year, so seven months.
0:18:26 > 0:18:28It's just a long way off, isn't it,
0:18:28 > 0:18:31- from a vision of ten million in sales...- Mmm-hmm.
0:18:32 > 0:18:37- ..when, in seven months, you've turned over £20,000-odd?- Mmm-hmm.
0:18:39 > 0:18:44A setback for Ben, as Peter Jones challenges his ambitious figures.
0:18:44 > 0:18:48To stand any chance of meeting his targets,
0:18:48 > 0:18:51Ben needs to get his beans into more shoppers' trolleys.
0:18:52 > 0:18:55But the question for Sarah Willingham is how.
0:18:59 > 0:19:02Where I'm really struggling is, in my head,
0:19:02 > 0:19:04I can't see it in the retailers.
0:19:04 > 0:19:07I tell you why is because, if I'm a retailer,
0:19:07 > 0:19:10- where am I going to put it?- I want to be next to upmarket ready meals
0:19:10 > 0:19:13because that's exactly what they are.
0:19:13 > 0:19:17When it comes to eating at home, it becomes a side dish, often.
0:19:17 > 0:19:20You buy a piece of chicken, you buy some spinach
0:19:20 > 0:19:22and you take a pot of Masons Beans.
0:19:22 > 0:19:24I'm walking into my local Waitrose now
0:19:24 > 0:19:26and I know exactly where this is going to be.
0:19:26 > 0:19:29This is going to be, not on the main bit, on the left,
0:19:29 > 0:19:32it's going to be on the right-hand side with the sandwiches,
0:19:32 > 0:19:36the little pot of couscous. That's where, in my head, this is sat.
0:19:37 > 0:19:40- What are you selling them for? - £3.95.
0:19:40 > 0:19:44- So, I put you in front of Sainsbury's...- Mmm-hmm.
0:19:44 > 0:19:48..and they look at this and they say they want to retail it for £2.99...
0:19:48 > 0:19:52- Mmm-hmm.- ..to be in line with all the products they've got.
0:19:54 > 0:19:56We are making everything by hand now.
0:19:56 > 0:19:59We're soaking dried beans, we're making our own stock and everything,
0:19:59 > 0:20:03so there are huge cost savings to be made at scale,
0:20:03 > 0:20:06where we could actually bring production costs down as well.
0:20:08 > 0:20:10Ben deflects Touker Suleyman's concerns
0:20:10 > 0:20:13that the beans are too pricey.
0:20:13 > 0:20:15But Sarah Willingham still has an issue
0:20:15 > 0:20:18with the product positioning in the supermarket.
0:20:20 > 0:20:22Ben, in terms of an investment,
0:20:22 > 0:20:25I cannot get past that...
0:20:26 > 0:20:29..big, big, big step for me,
0:20:29 > 0:20:31which is where is it going to sit,
0:20:31 > 0:20:36for a normal person shopping, to put it into their trolley,
0:20:36 > 0:20:39to do with it what you want them to do?
0:20:39 > 0:20:41I wish you all the very best,
0:20:41 > 0:20:44- but I'm afraid I won't be investing, so I'm out.- Thank you very much.
0:20:47 > 0:20:51Ben's plans for supermarket supremacy are scuppered
0:20:51 > 0:20:53by an outgoing Sarah Willingham.
0:20:53 > 0:20:55And Peter Jones is worried
0:20:55 > 0:20:59that the young entrepreneur has bitten off more than he can chew.
0:21:02 > 0:21:04My concern is that, if you look at things
0:21:04 > 0:21:06and people that have ever tried this,
0:21:06 > 0:21:10like, for example, tomato ketchup, the famous HP Sauce,
0:21:10 > 0:21:14Worcester sauce - the things that are embedded and ingrained -
0:21:14 > 0:21:19when people try to compete in the specific target category,
0:21:19 > 0:21:21they don't succeed.
0:21:23 > 0:21:25I've got a completely opposite view to Peter.
0:21:25 > 0:21:28What I think you're doing is you're leveraging.
0:21:28 > 0:21:30I think, actually, having Heinz there
0:21:30 > 0:21:33and such a well-known brand, everybody gets baked beans.
0:21:33 > 0:21:36And there's a bit of quirkiness about it that says,
0:21:36 > 0:21:39"We're not really baked beans, we're a lot better than baked beans."
0:21:39 > 0:21:42Realistically, category for category,
0:21:42 > 0:21:44I'm not really competing with Heinz baked beans.
0:21:44 > 0:21:46The price point is so different,
0:21:46 > 0:21:48I sit on a different part of the supermarket,
0:21:48 > 0:21:50retailers don't see me as direct competition.
0:21:50 > 0:21:53But from a sort of story point of view, it really gives me something
0:21:53 > 0:21:56to push against, something to talk about and people love that idea.
0:21:58 > 0:22:02Ben is fighting hard to silence the doubters
0:22:02 > 0:22:05and he appears to have found an ally in Deborah Meaden.
0:22:07 > 0:22:09He's had a challenging time so far,
0:22:09 > 0:22:12but could the mood in the Den have begun to change?
0:22:15 > 0:22:18If you want to enter the big arena...
0:22:20 > 0:22:24- ..you've got to look at your real costs.- Mmm-hmm.
0:22:24 > 0:22:29So, I would definitely like to go all the way back through the process
0:22:29 > 0:22:33and get my team in Turkey to see what they can source
0:22:33 > 0:22:37in the quality that you approve, so I'm going to make you an offer.
0:22:41 > 0:22:42I will...
0:22:44 > 0:22:46..offer you all the money...
0:22:48 > 0:22:50..but I want 40% of the business.
0:22:56 > 0:23:00You're good. You're what's holding me here.
0:23:00 > 0:23:03No, actually, you're NOT all that's holding me here.
0:23:06 > 0:23:11The branding, the positioning... I like the... I do this.
0:23:11 > 0:23:14- I like the feel, I like the sense of this, you know?- Yeah.
0:23:14 > 0:23:17It's really hard to explain to people who don't get that,
0:23:17 > 0:23:20but I just like the sense of it. So I'm going to make you an offer.
0:23:20 > 0:23:24And I'm going to offer you all of the money, um...
0:23:26 > 0:23:28I want 40% of the business.
0:23:31 > 0:23:33A second offer for Ben,
0:23:33 > 0:23:36as Deborah Meaden joins Touker Suleyman
0:23:36 > 0:23:42in stumping up all the cash, but in return for 40% of the business,
0:23:42 > 0:23:46substantially more than the 10% Ben wanted to sell.
0:23:46 > 0:23:49Does Nick Jenkins have a similar appetite for the deal?
0:23:52 > 0:23:56- Ben, I'm going to make you an offer.- OK.- Um...
0:23:57 > 0:24:01There's a certain level at which the entrepreneur doesn't have
0:24:01 > 0:24:06enough left in it to be...to be as motivational as it needs to be.
0:24:06 > 0:24:10And this business is going to require further dilution, I think,
0:24:10 > 0:24:14at some point, because it's going to require further fundraising.
0:24:14 > 0:24:16So, I'm going to offer you all of the money...
0:24:18 > 0:24:20..but for 25%.
0:24:23 > 0:24:25So, Nick Jenkins has undercut
0:24:25 > 0:24:29Touker Suleyman and Deborah Meaden's 40% bids.
0:24:29 > 0:24:32But he's still asking for much more of the business
0:24:32 > 0:24:35than the 10% Ben is offering.
0:24:36 > 0:24:41Time for supermarket supremo Peter Jones to show his hand.
0:24:44 > 0:24:48Oh, boy! I'm normally incredibly decisive.
0:24:48 > 0:24:51Cos I'd decided, when you came in and pitched,
0:24:51 > 0:24:53I decided to make you an offer.
0:24:54 > 0:24:58I think that you're going to be successful...
0:24:59 > 0:25:01..but not with this business.
0:25:03 > 0:25:08I don't see that this is going to achieve the dream that you have.
0:25:13 > 0:25:17But you're an entrepreneur of the future, so I'm investing in YOU.
0:25:17 > 0:25:19I'm going to offer you all of the money...
0:25:20 > 0:25:22..for 35%.
0:25:23 > 0:25:28An unusually indecisive Peter Jones has set aside his doubts
0:25:28 > 0:25:31to make Ben an offer.
0:25:31 > 0:25:33Four Dragons are now in...
0:25:35 > 0:25:38Touker Suleyman and Deborah Meaden at 40%,
0:25:38 > 0:25:43Nick Jenkins at 25% and Peter Jones at 35%.
0:25:43 > 0:25:47Ben has some serious thinking to do.
0:25:47 > 0:25:50- Maybe I'll take some time. - Yeah, go and talk to the wall.
0:25:50 > 0:25:53- It's the Wise Wall.- I've seen. I've seen many a decision made.
0:25:53 > 0:25:54DEBORAH MEADEN LAUGHS
0:26:09 > 0:26:10So...
0:26:12 > 0:26:14I don't feel comfortable giving away
0:26:14 > 0:26:18more than 20% of my business at this stage.
0:26:19 > 0:26:23I see huge value from all four of you,
0:26:23 > 0:26:26so would any of you be willing to make me an offer at 20%?
0:26:30 > 0:26:32Tell you what I'm going to do.
0:26:34 > 0:26:37I'm going to make you an offer for the 40% that I talked about.
0:26:37 > 0:26:40If you hit your targets over the next two years...
0:26:42 > 0:26:45..I will give you 5% back
0:26:45 > 0:26:50and I will give you the opportunity to buy a further 10% back
0:26:50 > 0:26:56at the price that I paid, leaving me as a 25% shareholder.
0:27:00 > 0:27:05I would be willing to give you a year, 18 months,
0:27:05 > 0:27:08to buy back the 15%.
0:27:09 > 0:27:11As far as further funding,
0:27:11 > 0:27:14if you've got the business, it's not an issue,
0:27:14 > 0:27:19cos it's all to do with financing the work in progress.
0:27:22 > 0:27:26Deborah Meaden and Touker Suleyman continue to lock horns,
0:27:26 > 0:27:30as they offer ratchet agreements that would see them both
0:27:30 > 0:27:35potentially dropping to a 25% equity stake in Ben's company.
0:27:36 > 0:27:40So, how low is Peter Jones prepared to go?
0:27:42 > 0:27:44Cor! Wow.
0:27:46 > 0:27:48I'm willing to...
0:27:49 > 0:27:52I'm offering you all of the money for 35%, as you know.
0:27:52 > 0:27:54I will drop down to 25%...
0:27:56 > 0:27:59..the moment that my investment is repaid, whether it's now or...
0:27:59 > 0:28:03It doesn't matter. I'll give you that open offer in perpetuity.
0:28:05 > 0:28:08But you'll end up with 75% of the business and I'll have 25%.
0:28:10 > 0:28:12Can I just actually simplify my offer?
0:28:12 > 0:28:15I'm going to give you all the money for 20%.
0:28:17 > 0:28:19Because, frankly, we'll spend that much.
0:28:19 > 0:28:22We'll spend the few thousand pounds on the paperwork,
0:28:22 > 0:28:23drawing up the buy-back agreement.
0:28:23 > 0:28:26You might as well just call a spade a spade. Um...
0:28:28 > 0:28:30Give me a few minutes.
0:28:32 > 0:28:34A rare occurrence in the Den,
0:28:34 > 0:28:38as Ben successfully negotiates all four Dragons down.
0:28:38 > 0:28:43Three of the Dragons are now offering the full £50,000
0:28:43 > 0:28:45but with buy-back agreements
0:28:45 > 0:28:49that would mean their equity could drop to 25%.
0:28:49 > 0:28:53But a deal-hungry Nick Jenkins has cut through the complex deals
0:28:53 > 0:28:57and gone straight in at 20%,
0:28:57 > 0:29:00the maximum Ben has said he'll accept.
0:29:00 > 0:29:02OK, I have a decision.
0:29:06 > 0:29:08I think I'd like to go with...
0:29:10 > 0:29:14- ..Nick's offer, please.- Brilliant. - Well done.- Well done.
0:29:14 > 0:29:18- Thank you very much.- Brilliant pitch.- Thank you.- Well done.
0:29:18 > 0:29:21- Well done.- Very good.- Yay!- Bye.
0:29:22 > 0:29:26So, finally, a deal and Ben leaves the Den
0:29:26 > 0:29:31£50,000 and a new Dragon investor to the good.
0:29:31 > 0:29:35That was a very odd decision and I'm pleased, now, I didn't get it.
0:29:35 > 0:29:38And the last 5%. Bloody hell.
0:29:38 > 0:29:42- Weird.- Actually, it's not that odd a decision.- Why?
0:29:42 > 0:29:46Because you're assuming that you can...that Peter can just...
0:29:46 > 0:29:50You know, anoint him with the Reggae Reggae sword and all will be well.
0:29:50 > 0:29:52Now, yes, but at the same time,
0:29:52 > 0:29:55don't underestimate quite what I'm going to throw at this.
0:30:00 > 0:30:03Still to come on tonight's show...
0:30:04 > 0:30:06Hit...
0:30:06 > 0:30:07DRUM BEATS
0:30:07 > 0:30:08..miss...
0:30:10 > 0:30:11OK.
0:30:12 > 0:30:14Sorry.
0:30:14 > 0:30:15..and maybe.
0:30:15 > 0:30:17Seriously, Yann, are you for real?
0:30:21 > 0:30:25Next to face the Dragons is Lisa Young from Kent.
0:30:25 > 0:30:27Lisa's spent the best part of two decades
0:30:27 > 0:30:29working in the spray tan industry
0:30:29 > 0:30:32and she's always on the lookout for new custom.
0:30:37 > 0:30:40I think Peter Jones would love one of my spray tans.
0:30:40 > 0:30:42We can create a nice sculpted body for him.
0:30:42 > 0:30:45I think he'd really enjoy it. Do you want a drink or anything?
0:30:45 > 0:30:50- It's too late now.- Only if it's vodka. I'd drink the jug!
0:30:52 > 0:30:54We've learned the pitch, learned the numbers.
0:30:54 > 0:30:57It's been a massive build-up. I can feel my palpitations.
0:30:57 > 0:31:00But today, I got up, I feel confident and excited.
0:31:19 > 0:31:20Hello, Dragons.
0:31:20 > 0:31:24My name is Lisa and I'm here to pitch for £60,000
0:31:24 > 0:31:27for a 20% share in my company, Sunless Solutions.
0:31:29 > 0:31:32My love of the tanning industry began over 17 years ago.
0:31:32 > 0:31:35As a heavy sunbed user, I could see the damage
0:31:35 > 0:31:37that was being caused to my skin
0:31:37 > 0:31:39and I looked at alternative ways to tan.
0:31:39 > 0:31:42I discovered spray tan, I was instantly hooked.
0:31:42 > 0:31:43I worked with a chemist
0:31:43 > 0:31:46and I established a professional spray tan solution.
0:31:50 > 0:31:53OK... A professional spray tan solution....
0:31:57 > 0:32:02Sorry. Um... I went on in 2008, to establish Sunless Solutions.
0:32:02 > 0:32:06- I'd like to show you a demonstration of my product.- Sorry, thank you.
0:32:10 > 0:32:11The Tan in Tent is designed
0:32:11 > 0:32:14to maintain the overspray within the tent.
0:32:14 > 0:32:16SPRAY TAN MACHINE HUMS LOUDLY
0:32:18 > 0:32:19It comes with a mesh ceiling
0:32:19 > 0:32:22so that you can see the light coming through the tent.
0:32:22 > 0:32:25It also comes with an extractor flap at the back
0:32:25 > 0:32:26and extending floor flap.
0:32:26 > 0:32:28- I think we kind of get it, don't we? - We get that, yeah.
0:32:28 > 0:32:32OK, that's fine, thank you. Sorry. OK.
0:32:32 > 0:32:34Once you've finished, your client will step outside.
0:32:36 > 0:32:38Your Tan in Tent instantly deflates.
0:32:44 > 0:32:46Um...
0:32:46 > 0:32:50OK... My company and my strapline, "Spray it, fake it, love it",
0:32:50 > 0:32:54come with a registered trademark, along with my Tan in Tent,
0:32:54 > 0:32:57designed to change the way we spray tan in the future.
0:32:57 > 0:33:01The Tan in Tent has been designed to be machine washable
0:33:01 > 0:33:06and tumble dryer safe. It's the first spray tan cubicle of its kind.
0:33:06 > 0:33:10It currently has a patent in the UK, USA and Europe.
0:33:13 > 0:33:15Oh, gosh...
0:33:15 > 0:33:17Designed to change the way we...
0:33:17 > 0:33:20The self-tan market itself is worth over £100 million.
0:33:22 > 0:33:25With your investment, we'd like to take our brand global
0:33:25 > 0:33:28and also the spray tan tent. Thank you for your time today.
0:33:28 > 0:33:31We've got some spray tan survival kits to give out to you.
0:33:33 > 0:33:35A range of spray tanning lotions
0:33:35 > 0:33:38and an inflatable tent in which to apply them
0:33:38 > 0:33:40are the dual offering from Lisa Young,
0:33:40 > 0:33:45who's seeking £60,000 for a 20% share in her company.
0:33:45 > 0:33:48I'd just like to say thank you to my girls now. Thank you.
0:33:48 > 0:33:53But her flustered delivery has left Touker Suleyman unclear
0:33:53 > 0:33:55about precisely what's on the table.
0:33:59 > 0:34:03I'm a bit confused cos you were quite nervous.
0:34:03 > 0:34:08What are we investing in? You've got the lotions and you've got the tent?
0:34:08 > 0:34:12- Yes, we have.- Right. As far as the lotions are concerned...- Yes?
0:34:12 > 0:34:14- You've had it since 2008?- Yes.
0:34:14 > 0:34:16Give us some figures for the last three years.
0:34:16 > 0:34:23OK, the last three years. In 2012, we turned over £437,000.
0:34:23 > 0:34:28- In the following year, we did £310,000.- And last year?
0:34:28 > 0:34:31- Er, £235,000.- Yeah.
0:34:31 > 0:34:36- With a...net of £69,500.- Yep.
0:34:36 > 0:34:39- And a profit of £4,800. - That's mainly on the lotions?
0:34:39 > 0:34:41That's mainly on the lotions.
0:34:41 > 0:34:45We actually bought the first batch of Tan in Tents in in 2013.
0:34:45 > 0:34:48- So, how many of those have you sold up to date?- 2,500.
0:34:49 > 0:34:53- You've valued the business at £300,000.- I have, yes.
0:34:53 > 0:34:56And how did you...? Were you advised on that or you picked a figure?
0:34:56 > 0:34:58No, I didn't pick a figure.
0:34:58 > 0:35:02I spoke to the accountants and I think the reason we valued
0:35:02 > 0:35:06our company at £300,000 is mainly because of the niche of the tent.
0:35:06 > 0:35:10What's happening is that there is other tanning products out there,
0:35:10 > 0:35:12other tanning companies out there,
0:35:12 > 0:35:14but they all are looking to purchase this tent
0:35:14 > 0:35:16because they all can see the way forward,
0:35:16 > 0:35:18they can see it's the future.
0:35:18 > 0:35:20With your other business,
0:35:20 > 0:35:24you had sales of £437,000, £310,000, £235,000.
0:35:24 > 0:35:27Is that because you were taking your eye off the ball
0:35:27 > 0:35:29with your main business?
0:35:30 > 0:35:32I would say that I was trying to develop this
0:35:32 > 0:35:35- and I was using any capital I had to bring this product in.- Yeah.
0:35:35 > 0:35:37- OK.- Cos I believed in it.
0:35:37 > 0:35:40My heart always sinks when someone says,
0:35:40 > 0:35:41"I want your money to go global,"
0:35:41 > 0:35:44and you think, "You haven't even done Warrington yet."
0:35:45 > 0:35:49You have to conquer your own market before you think about going global.
0:35:49 > 0:35:51Then get your other business up to scratch,
0:35:51 > 0:35:53- cos that's not a bad business. - No, and I worked really hard.
0:35:53 > 0:35:55It was blood, sweat and tears all the way.
0:35:55 > 0:35:58So, you're clearly very capable.
0:35:59 > 0:36:04But it IS small, it is niche, so I'm out.
0:36:06 > 0:36:09Quicker than it takes one of her spray tans to dry,
0:36:09 > 0:36:12Lisa has lost her first Dragon.
0:36:12 > 0:36:17And Peter Jones has concerns over the size of the business opportunity too.
0:36:19 > 0:36:23In terms of the Tan in Tent, I kind of get it,
0:36:23 > 0:36:26but it's such a tiny, tiny market,
0:36:26 > 0:36:29because this is only going to be purchased
0:36:29 > 0:36:31by somebody that is in the trade.
0:36:31 > 0:36:33This isn't something for somebody at home.
0:36:33 > 0:36:37I've seen this happen so many times... Well, I say so many times.
0:36:37 > 0:36:39God, Tara's going to kill me.
0:36:39 > 0:36:42- When I watch this, it's almost like rapid.- OK.
0:36:42 > 0:36:45It's really quick, goes into the shower, does stuff,
0:36:45 > 0:36:48the legs are done and it's like a glove thing and then comes out
0:36:48 > 0:36:52- and looks like she's had ten days in Barbados.- No problem.
0:36:52 > 0:36:56- But I don't think you're claiming that's the market at all.- I'm not.
0:36:56 > 0:36:59She doesn't, for one minute, think this is about domestic.
0:36:59 > 0:37:01- This isn't for Tara. - This is for mobile and salons.
0:37:01 > 0:37:05Anybody who's going to do this with their tan wouldn't be using that.
0:37:05 > 0:37:10You need two people to spray tan, therefore it's not a home market.
0:37:10 > 0:37:12But this is only a mobile sprayer then.
0:37:12 > 0:37:14Sorry, it's mobile and it's for salons.
0:37:14 > 0:37:16But salons are not going to have that
0:37:16 > 0:37:18cos salons will have their own facilities.
0:37:18 > 0:37:21I think if you walk into any salon, they've got a pop-up cubicle in it.
0:37:21 > 0:37:26It smells. It smells of a spray tan. It's sticky, it's unhygienic.
0:37:27 > 0:37:32Lisa has given the Dragons chapter and verse on the merits of her tent,
0:37:32 > 0:37:37but so far, only Deborah Meaden appears to be on the same page.
0:37:37 > 0:37:42She's grasped the market, so will she grasp the opportunity to invest?
0:37:46 > 0:37:50I've got to be honest. I don't like tanning product an awful lot.
0:37:53 > 0:37:54But...
0:37:55 > 0:37:59The tent issue... I actually spent more time in a spray cubicle
0:37:59 > 0:38:02- than I was expecting to when I did Strictly.- OK.
0:38:02 > 0:38:05By the time I'd got to them and they'd had loads of people in,
0:38:05 > 0:38:07they were all slightly skewwhiff and whatever,
0:38:07 > 0:38:09so I actually think it's really neat.
0:38:09 > 0:38:12The Tan in Tents that we've got at the moment,
0:38:12 > 0:38:14the cubicles with a wire, have had their day.
0:38:14 > 0:38:16They're pennies to buy on the internet
0:38:16 > 0:38:18but they also bend and break and they're unhygienic.
0:38:18 > 0:38:21Now, there is the bigger tanning companies out there.
0:38:21 > 0:38:24They all want to buy that patent off of me.
0:38:25 > 0:38:27I'm amazed you got a patent on it
0:38:27 > 0:38:29because it's basically a blow-up bouncy castle
0:38:29 > 0:38:31without the bouncy castle bit at the bottom of it.
0:38:31 > 0:38:33I spent quite a bit of money.
0:38:33 > 0:38:36I've worked with my IP lawyer to make sure
0:38:36 > 0:38:39that when it's for the purposes of spray tan, they can't be copied.
0:38:39 > 0:38:43They could do it square, round, circular, it can't happen.
0:38:44 > 0:38:46So, that's the interesting bit to me.
0:38:46 > 0:38:51Right now, I want to understand that conversation or conversations
0:38:51 > 0:38:54about patents, cos that's where the value lies, as far as I'm concerned.
0:38:54 > 0:38:55OK. No problem.
0:38:57 > 0:39:00Obviously we had quite a few meetings with the companies.
0:39:00 > 0:39:03For me, at the time, spending three years developing something,
0:39:03 > 0:39:07- I probably overvalued that at that point.- What DID you value it at?
0:39:07 > 0:39:10I asked for £500,000 to take my patent away from me
0:39:10 > 0:39:13- and work with it. - And did they counteroffer?
0:39:14 > 0:39:19OK, they came back and they were offering something like £100,000,
0:39:19 > 0:39:22so for me, it would be better to roll the dice
0:39:22 > 0:39:23and take a chance on it.
0:39:23 > 0:39:27- However, to take it forward, it does need investment.- OK.
0:39:27 > 0:39:30I'm going to tell you where I am. I'm not going to criticise that.
0:39:30 > 0:39:33- I think that's a really good idea.- OK.
0:39:35 > 0:39:40I think you are loopy to have stopped conversations.
0:39:40 > 0:39:42What I would have done, if I were you,
0:39:42 > 0:39:45is I wouldn't have sold the patent. I would said,
0:39:45 > 0:39:49"You pay me an upfront fee for the exclusive rights to it"
0:39:49 > 0:39:51and license it.
0:39:51 > 0:39:54But, actually, what you have told me is, as far as I'm concerned,
0:39:54 > 0:39:58- the only thing that is of value in this company is that patent.- It is.
0:39:58 > 0:40:01And you've just told me what it's worth
0:40:01 > 0:40:03and it ain't the £300,000 you're asking for.
0:40:05 > 0:40:09There isn't enough value in it. I'm really sorry, but I'm out.
0:40:10 > 0:40:15Lisa has significantly overvalued her patent. The result?
0:40:15 > 0:40:19Deborah Meaden joins Nick Jenkins in declining the deal.
0:40:21 > 0:40:25Have an initially sceptical Peter Jones or Touker Suleyman
0:40:25 > 0:40:28heard anything to change their minds?
0:40:30 > 0:40:31Lisa.
0:40:33 > 0:40:35I can't get my head round the valuation.
0:40:37 > 0:40:39You're not making any money.
0:40:40 > 0:40:43So, on that basis, I'm out.
0:40:46 > 0:40:49Lisa, I don't see that this is a business to really invest in
0:40:49 > 0:40:53and make a lot of money. It's not for me, so I'm out.
0:40:56 > 0:40:59It's not looking good for the beauty entrepreneur.
0:40:59 > 0:41:03Four Dragons have now turned down her Tan in Tent.
0:41:04 > 0:41:07Lisa has hardly been sprayed with offers,
0:41:07 > 0:41:11but Sarah Willingham has been unusually quiet.
0:41:11 > 0:41:14Is she intent on striking a deal?
0:41:17 > 0:41:18I love that tent!
0:41:21 > 0:41:24The issue is you've made it such a good product
0:41:24 > 0:41:28that it's going to be machine washable and go in the tumble dryer
0:41:28 > 0:41:31and I reckon that's going to last everybody ages.
0:41:31 > 0:41:33And I think there's not enough people
0:41:33 > 0:41:35that are going to be buying it
0:41:35 > 0:41:39to actually make THAT a better route to market
0:41:39 > 0:41:41than the one that Deborah was talking about.
0:41:43 > 0:41:46Good luck with everything, but I'm afraid I'm not investing,
0:41:46 > 0:41:48- so I'm out.- OK, thank you.
0:41:50 > 0:41:53So, a deflated Lisa leaves the Den with nothing.
0:41:53 > 0:41:56Damn!
0:41:56 > 0:41:59Lisa, what did you do that for? Oh!
0:41:59 > 0:42:03Her spray tanning business may guarantee a healthy bronze
0:42:03 > 0:42:07but as far as a deal with the Dragons is concerned,
0:42:07 > 0:42:09she sadly failed to strike gold.
0:42:09 > 0:42:13When I walked in and realised I'd messed up my pitch so much,
0:42:13 > 0:42:17I kind of felt a little bit gutted from that point forward, to be fair.
0:42:17 > 0:42:19I think, if I could do it again,
0:42:19 > 0:42:22I'd probably walk in a lot different and fight for what I wanted
0:42:22 > 0:42:25because it's a brilliant product, absolutely brilliant product.
0:42:34 > 0:42:37Onto our final visitors now, who have found a way
0:42:37 > 0:42:42to combine their two passions - computer science and music.
0:42:42 > 0:42:45Let's see if they can "drum" up any interest in the Den.
0:42:53 > 0:42:56I grew up playing drums but problems arose with the neighbours,
0:42:56 > 0:42:58so I eventually had to give it up,
0:42:58 > 0:43:01so that was part of the motivation for developing our product.
0:43:01 > 0:43:04We would be excited about a Dragon coming on board
0:43:04 > 0:43:07but, hopefully, we won't have to give away too much ownership
0:43:07 > 0:43:08of the company to make it happen.
0:43:21 > 0:43:24Hello, my name is Yann and this is my colleague Richard.
0:43:24 > 0:43:28We're here today to ask for an investment of £75,000
0:43:28 > 0:43:30into our company, Aerodrums,
0:43:30 > 0:43:34in exchange for a 5% share of the business.
0:43:34 > 0:43:36Before we tell you more about it,
0:43:36 > 0:43:39Richard is going to demonstrate the product for you.
0:43:39 > 0:43:42DRUM AND CYMBAL BEATS
0:43:44 > 0:43:46DRUM ROLL
0:43:50 > 0:43:52DRUM BEATS CONTINUE
0:43:58 > 0:44:00As you can see,
0:44:00 > 0:44:02using state-of-the-art motion tracking technology,
0:44:02 > 0:44:05we have developed a musical instrument
0:44:05 > 0:44:07that plays just like a normal drum kit.
0:44:07 > 0:44:09So what's the point?
0:44:09 > 0:44:12Air drumming solves a number of problems that all drummers face.
0:44:12 > 0:44:15Number one - drum kits are extremely loud. Aerodrums is whisper quiet
0:44:15 > 0:44:18if you wear headphones, so you won't disturb anyone.
0:44:18 > 0:44:20Number two - drum kits are big and heavy.
0:44:20 > 0:44:24In contrast, Aerodrums fits in a small bag, can be carried anywhere
0:44:24 > 0:44:27and set up in minutes. Finally, drum kits are expensive.
0:44:27 > 0:44:30At £129, Aerodrums is very affordable
0:44:30 > 0:44:33and costs what most drummers would typically pay for a single cymbal.
0:44:33 > 0:44:37Aerodrums was launched last year and our sales have been growing fast.
0:44:37 > 0:44:39It is a one-of-a-kind product with very high growth potential
0:44:39 > 0:44:41and we have no direct competition.
0:44:41 > 0:44:43We have all patents, trademarked Aerodrums
0:44:43 > 0:44:46and secured endorsements from high-profile drummers.
0:44:46 > 0:44:49Before we invite your questions, would any of you like to try it?
0:44:51 > 0:44:54A drum kit to stop the neighbours complaining,
0:44:54 > 0:44:58the brainchild of scientists Yann Morvan and Richard Lee.
0:44:58 > 0:45:02DRUM AND CYMBAL SOUNDS
0:45:02 > 0:45:05They're looking for £75,000
0:45:05 > 0:45:08for just 5% equity in their innovative product.
0:45:09 > 0:45:11- PETER JONES:- The concentration on his face!
0:45:11 > 0:45:14LAUGHTER
0:45:15 > 0:45:20But is it innovation worth £1.5 million?
0:45:20 > 0:45:22DEBORAH MEADEN LAUGHS
0:45:23 > 0:45:28Sarah Willingham wants to know if there's a business behind the brains.
0:45:30 > 0:45:34I'm trying to understand the market potential of it.
0:45:34 > 0:45:38- Can you learn to play the drums on this?- Yes, you can.
0:45:38 > 0:45:40So this can be aimed at professional drummers
0:45:40 > 0:45:44that are maybe travelling and want to be able to practise
0:45:44 > 0:45:47and also this is for people who might just want to get a feel for it
0:45:47 > 0:45:50- without spending loads of money. - Yeah.
0:45:50 > 0:45:53So, you're in the very early stages of your business
0:45:53 > 0:45:56but you say that you're already selling. What have you sold?
0:45:56 > 0:45:59We launched in January last year, so currently,
0:45:59 > 0:46:03we've sold about 1,100 so far.
0:46:03 > 0:46:06So what does your revenue look like?
0:46:06 > 0:46:12Revenue's good. To date, we brought in £96,000.
0:46:12 > 0:46:16And what's the nearest thing to this that currently exists?
0:46:16 > 0:46:19There's acoustic drum kits which is the normal thing
0:46:19 > 0:46:22but when people think of an alternative,
0:46:22 > 0:46:23they think of electronic drum kits.
0:46:23 > 0:46:27These are still priced way beyond what we sell Aerodrums for.
0:46:27 > 0:46:31But we don't view those as real direct competition
0:46:31 > 0:46:35cos Aerodrums has the ability to let people go into drumming
0:46:35 > 0:46:40who wouldn't have had the space or the neighbours to put up with this.
0:46:42 > 0:46:47The musical entrepreneurs appear to be on a roll in the Den so far.
0:46:47 > 0:46:51But with just a 5% equity stake up for grabs,
0:46:51 > 0:46:55Touker Suleyman doesn't appear to be marching to their beat.
0:46:57 > 0:46:59Richard and Yann, it's a gimmick.
0:47:00 > 0:47:04- No, it's not.- What is it then? - It's a musical instrument.
0:47:04 > 0:47:07How can you call a musical instrument a gimmick?
0:47:09 > 0:47:11The fact really is it is very specialised.
0:47:11 > 0:47:13I believe it's very small.
0:47:15 > 0:47:19I'm just amazed how you got the audacity to come here today
0:47:19 > 0:47:22and say, "This is worth £1.5 million,"
0:47:22 > 0:47:25when you've turned over 100 grand.
0:47:25 > 0:47:28Yeah, I think it's because you don't see the bigger picture.
0:47:29 > 0:47:33The bigger picture is that I should be made to look a fool
0:47:33 > 0:47:36to value this business at £1.5 million.
0:47:36 > 0:47:39Explain to me how you got the valuation.
0:47:39 > 0:47:42The valuation is pretty simple.
0:47:42 > 0:47:47We looked at where...how our sales were growing,
0:47:47 > 0:47:50on the back of fairly little publicity.
0:47:50 > 0:47:54If we start selling, I don't know, into Turkey, Japan,
0:47:54 > 0:47:56the market is big.
0:47:56 > 0:47:58Do you think it's going to come for nothing?
0:47:58 > 0:48:01- All that will cost you more than £1,000,000...- No, it won't.
0:48:01 > 0:48:04..to advertise, publicise it, whatever.
0:48:04 > 0:48:07We need to disagree on your statement.
0:48:07 > 0:48:10We can agree to disagree all day long. You know why?
0:48:10 > 0:48:13Because I look at businesses all the time
0:48:13 > 0:48:19and for you to come here today with this valuation for 5%, it's a joke!
0:48:19 > 0:48:23- So, for that reason, I'm out. - Thank you.- Thanks.
0:48:27 > 0:48:31A clash of personalities has left Touker Suleyman rattled
0:48:31 > 0:48:34and Richard and Yann without a deal.
0:48:35 > 0:48:37Will they be any more in tune
0:48:37 > 0:48:41with the notoriously hard to please Peter Jones?
0:48:41 > 0:48:45Guys, I think it's really quite impressive.
0:48:45 > 0:48:48- Thanks. - And I think that the technology
0:48:48 > 0:48:51that you've used to create it is quite advanced.
0:48:51 > 0:48:59My issue is the widestream nature of the market, then the endgame.
0:48:59 > 0:49:03How could we get a deal away with a mainstream player?
0:49:03 > 0:49:06In terms of the market,
0:49:06 > 0:49:09this is something that every drummer stands to benefit from,
0:49:09 > 0:49:12so we think that the market potential is huge,
0:49:12 > 0:49:14especially in light of the fact
0:49:14 > 0:49:17that most drummers still don't know about it.
0:49:18 > 0:49:20In terms of the mass market as well,
0:49:20 > 0:49:23we could definitely branch into the video game side
0:49:23 > 0:49:26and make something that has mass appeal.
0:49:26 > 0:49:31I want to be able to go and buy, on the shelf, that Aerodrums game.
0:49:32 > 0:49:35And next to Aerodrums DVD, I want to buy the two-stick pack.
0:49:35 > 0:49:39- How could we get there? - We could easily go there.
0:49:39 > 0:49:41The main problem with that
0:49:41 > 0:49:43is needing to be a licensed games developer.
0:49:43 > 0:49:47It probably would work better to license out our technology
0:49:47 > 0:49:51and let them do that heavy lifting that they already do.
0:49:52 > 0:49:55I do think that it's going to need a lot of work
0:49:55 > 0:49:57to make this into a mass-market product
0:49:57 > 0:50:00and I think you're going to need quite a bit of help with that.
0:50:01 > 0:50:03I'm going to make you an offer.
0:50:03 > 0:50:06But I think this is one area
0:50:06 > 0:50:11where sometimes two brains is better than one.
0:50:11 > 0:50:14So, I'm going to offer you half of the money...
0:50:16 > 0:50:18..but I want 20%.
0:50:23 > 0:50:26Peter Jones makes his move,
0:50:26 > 0:50:29sold on the mass-market appeal of the Aerodrums.
0:50:29 > 0:50:34But for just half of the money, he wants 20% equity, way more
0:50:34 > 0:50:39than the 5% Yann and Richard were looking to sell for ALL the cash.
0:50:41 > 0:50:45Will another Dragon want to partner with him or even cut their own deal?
0:50:48 > 0:50:51Guys, can I just ask a bit more about the size of the market?
0:50:51 > 0:50:54How many people in the UK play the drums, for example?
0:50:54 > 0:50:57- Well, we don't have that figure. - Ish.
0:50:57 > 0:51:01- In the US, it would be about a million people, I think.- In the US?
0:51:01 > 0:51:03Yeah. I would imagine the proportion is very similar.
0:51:03 > 0:51:05200,000 maybe.
0:51:07 > 0:51:10In order to sell lots of these, they...
0:51:10 > 0:51:13Really, I need to be buying them for my son.
0:51:13 > 0:51:16If it was done right, you could make a game that's fun to play
0:51:16 > 0:51:20and educational that would teach you how to play drums using Aerodrums.
0:51:20 > 0:51:24But, to be honest, from the get-go, we knew this wasn't a toy
0:51:24 > 0:51:27or a fad and we wanted people to take it seriously.
0:51:29 > 0:51:31I'll tell you where I am.
0:51:31 > 0:51:35I think you've created something that almost looks like magic.
0:51:37 > 0:51:41But I have no experience whatsoever in this industry.
0:51:41 > 0:51:46It's way too big a leap for me to understand it.
0:51:46 > 0:51:49It's not an investment for me.
0:51:49 > 0:51:52I'm not the right Dragon for you, so I'm out.
0:51:53 > 0:51:54- Thanks.- Thanks a lot.
0:51:56 > 0:52:00There's a problem. And that is I'm with Sarah.
0:52:00 > 0:52:04I was really struggling with the size of the market
0:52:04 > 0:52:07and you weren't able to answer that.
0:52:09 > 0:52:12I can't get involved without having an inkling
0:52:12 > 0:52:16over whether we're talking ten people or ten million people.
0:52:16 > 0:52:20I genuinely have absolutely no idea. There's a gaping hole
0:52:20 > 0:52:23that I'm really sorry you guys didn't fill for me.
0:52:23 > 0:52:25- I won't be investing. I'm out.- OK.- Thank you.
0:52:28 > 0:52:30Two more of the Dragons are gone,
0:52:30 > 0:52:34with doubts raised over the size of the potential market for the product.
0:52:36 > 0:52:41Richard and Yann's fate now comes down to Nick Jenkins.
0:52:43 > 0:52:46I have a music educational software business
0:52:46 > 0:52:48that I started quite recently.
0:52:48 > 0:52:51It's largely designed for stringed instruments,
0:52:51 > 0:52:53so I've done quite a bit of analysis of this market.
0:52:53 > 0:52:56I do think this has mass appeal
0:52:56 > 0:52:59and I think, if you combine that with the educational side,
0:52:59 > 0:53:03then I'm very interested in addressing that part of the market.
0:53:03 > 0:53:07But what I'm looking at is an incomplete management team
0:53:07 > 0:53:09and an incomplete set of skills.
0:53:09 > 0:53:11In terms of overall commercial strategy
0:53:11 > 0:53:15and in terms of building a brand, that's probably what you're missing
0:53:15 > 0:53:17and that's certainly what we can add.
0:53:17 > 0:53:19So, I'm going to make you an offer.
0:53:19 > 0:53:23I will offer you the other half - £37,500 -
0:53:23 > 0:53:25for 20% of the business.
0:53:28 > 0:53:30Do you want to go to the back and have a little discussion
0:53:30 > 0:53:32- with your drumsticks?- Yeah.
0:53:35 > 0:53:37With Nick Jenkins offering to put up
0:53:37 > 0:53:39the other half of the money they've asked for,
0:53:39 > 0:53:42Richard and Yann have a lot to consider.
0:53:42 > 0:53:44INAUDIBLE DISCUSSION
0:53:44 > 0:53:47The entrepreneurs must decide
0:53:47 > 0:53:51if they're willing to give up an eye-watering 40% of their company,
0:53:51 > 0:53:5635% more equity than they came to sell.
0:53:56 > 0:53:58INAUDIBLE DISCUSSION
0:54:05 > 0:54:10This is going to sound a bit stingy, but we are going way beyond
0:54:10 > 0:54:14what we had agreed together before coming here.
0:54:14 > 0:54:18What we are suggesting is that you would each invest half
0:54:18 > 0:54:21and you would each get 10% of the business.
0:54:21 > 0:54:26We are four times beyond what we came in asking here.
0:54:26 > 0:54:27That's half of what our offer is.
0:54:27 > 0:54:31The bit that I think that we're bringing to this party is,
0:54:31 > 0:54:34you know Nick's background online
0:54:34 > 0:54:37and in terms of MY background in looking at products
0:54:37 > 0:54:40and pushing them into the market on a global scale,
0:54:40 > 0:54:45I think you've got two incredibly individual, yet powerful, people
0:54:45 > 0:54:48to be working alongside you and there needs to be an upside.
0:54:48 > 0:54:51If I was to own 10% of this business,
0:54:51 > 0:54:54knowing the amount of work that's going to need to be done,
0:54:54 > 0:54:57my level of excitement wanes.
0:55:03 > 0:55:07I would be prepared to go down to 15%.
0:55:09 > 0:55:11I'd match that as well.
0:55:12 > 0:55:16You're now getting... Our counter is all of the money for 30%.
0:55:22 > 0:55:26It would be so crucial that we get along well
0:55:26 > 0:55:30if you're going to have a huge involvement in the company
0:55:30 > 0:55:35at that level of equity. It's not a decision we can make now.
0:55:35 > 0:55:37We'd need to have a few drinks with you.
0:55:37 > 0:55:39Seriously, Yann, are you for real?
0:55:41 > 0:55:44- Have you watched Dragons' Den? - I have, yeah.
0:55:44 > 0:55:48- So you know you come in here, you ask for investment.- Yes.
0:55:48 > 0:55:51You get an offer for investment and then you try and say
0:55:51 > 0:55:52that we want to go out for a drink and chat
0:55:52 > 0:55:55before you decide whether it's a yes or no?
0:55:55 > 0:55:57You've gone from a very intelligent man
0:55:57 > 0:56:00and made yourself look completely stupid in 30 seconds.
0:56:02 > 0:56:05You basically have to say yae or nay now
0:56:05 > 0:56:08and if you say nay, there's no going back afterwards.
0:56:09 > 0:56:12But you both are not the only experienced business people
0:56:12 > 0:56:15on the planet.
0:56:21 > 0:56:26Are you saying you're not going to accept an offer for 30%?
0:56:34 > 0:56:37No. I rejected the offer.
0:56:41 > 0:56:44I think this is one of those moments which is always disappointing,
0:56:44 > 0:56:47for either party, to get a rejection, but I have to say,
0:56:47 > 0:56:50I think this is something you're going to live to regret.
0:56:53 > 0:56:56Thank you very much. Goodbye.
0:56:59 > 0:57:02So, an opportunity disappears into thin air
0:57:02 > 0:57:06as Aerodrums' inventors decide not to concede
0:57:06 > 0:57:08to the Dragons' equity demands.
0:57:11 > 0:57:14- DEBORAH:- They're mad!- SARAH:- That's so stupid. Can't believe it.
0:57:14 > 0:57:18- They ARE mad scientists.- Ultimately, they turned it down for 10%.
0:57:18 > 0:57:20That's the reality of what just happened.
0:57:20 > 0:57:25- They just turned down that amazing offer.- For 5% each.- Yeah, 5% each!
0:57:26 > 0:57:29We're always going to be wondering what would have happened
0:57:29 > 0:57:30if we accepted,
0:57:30 > 0:57:34but we just felt it was too much of the company to give away.
0:57:40 > 0:57:45It takes real courage to play hardball with the Dragons
0:57:45 > 0:57:48over equity demands and we've seen two examples of it tonight,
0:57:48 > 0:57:51with contrasting outcomes.
0:57:51 > 0:57:55Ben finally did shake on a deal with Nick Jenkins,
0:57:55 > 0:57:59while Richard and Yann opted to keep hold of all their equity.
0:57:59 > 0:58:00You'll have your own view
0:58:00 > 0:58:03as to whether they each made the right decision,
0:58:03 > 0:58:06but all business is about making a choice
0:58:06 > 0:58:08and then making the best of it.
0:58:08 > 0:58:11- Just let it settle. - Coming up next time...
0:58:11 > 0:58:13It will settle into a perfect pint.
0:58:13 > 0:58:16You're about to torpedo what is a lovely business.
0:58:18 > 0:58:20It's a bit like you're the honeypot.
0:58:20 > 0:58:23I just don't want to be the one that's stung.
0:58:23 > 0:58:25I think you're going to make a go of this.
0:58:25 > 0:58:30The real question for me is do I want to have that journey with you?