Episode 13 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 multimillion-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 to Dragons' Den.

Entrepreneurs continue to queue at the door to the Den,

desperate to secure some Dragon capital.

For the Dragons, it's the chance to pounce on a good deal

and sometimes, if it's very good, each Dragon will have to fight

for the right to take a slice of the business.

Coming up on tonight's show...

THE DRAGONS LAUGH

-All that would cost you more than £1,000,000...

-No, it won't.

..to advertise, publicise it, whatever.

We need to disagree on your statement.

We can agree to disagree all day long.

-That market, they post it online themselves.

-No, they don't.

-They DO!

-No, they don't.

-Yes, they do.

-No, they don't.

-They don't need this.

-Of course they do.

My heart always sinks when someone says,

"I want your money to go global,"

and you think, "You haven't even done Warrington yet."

For you to come here today with this valuation for 5%, it's a joke!

First into the Den, an entrepreneur hoping to convince the Dragons

to snap up a share in his photography business.

And if things start to go wrong,

well, in that case, he has a cunning plan.

I was, for a period of time, a professional singer.

I could, if things are going badly, burst into song.

It might shock them into doing something.

# Summertime

# And the living is easy... #

Hi, my name is Dan Luxon and welcome to uShoot Studios.

I am here today, looking for £50,000 for a 20% share in my business.

We are unique,

a product photography studio that doesn't need a photographer.

About a year ago, I came across a company called StyleShoots

and they make these extraordinary machines that you see beside me.

These machines take high-resolution,

high-quality product photography images

and they deliver that in a matter of seconds, ready to upload online.

StyleShoots, themselves, sell only to high-volume users

and until I set up uShoot Studios, last year,

there was no way that small or medium size companies

could avail themselves of this extraordinary technology.

uShoot Studios is based in Islington.

We have 87 - 88, as of today - existing clients,

40% of whom have already been back for seconds.

We have a preferential relationship with StyleShoots,

which puts us in the perfect position

to corner the UK marketplace in the next 12 to 18 months.

I'm here, today, to look for a Dragon or Dragons

who have the influence and the contact base

to catapult this business forwards

and roll out through the UK and beyond, thereafter.

I would very much like to ask Touker to come up

and we'll see what the machines can do - if he's willing.

So, if we head round the back. Watch your head.

-So, this is operated from an iPad...

-Mmm.

..which acts through an app, basically just as a remote control.

Then we've got a live screen there. If we do it... You've got...

-Like that.

-We tend to do most of these this way round.

-Oh, right.

Only just because you've got the length.

Once you've got this in whatever way you're happy to shoot it,

once it's turned blue, press the button.

We've now got an indicative image, completely cut out,

with no background at all.

We're ready to take another one, if we want,

but we'll have a look at what we've taken.

-Shall I sit down now?

-Absolutely.

So, that is the pitch and I'll take any questions.

An exuberant pitch from Dan Luxon, who is seeking £50,000

in return for a 20% share of his product photography business.

Dan may have resisted the temptation to burst into song,

but even his speaking voice

appears to have made an impression on Peter Jones.

Dan.

Um...you're pretty loud.

-Thank you.

-You're very excitable.

-Mmm-hmm.

-What is the business?

The business is a string of photographic studios

which is aimed at small and medium size businesses,

where they come in and use the machinery on a frequent basis

and what I'm looking to do is scale that across the UK,

while I've got a first-mover advantage to do so.

-But this product is already available.

-Yes.

-And you don't own it.

-No.

But I do have a relationship with the manufacturer

and a meeting next week for anybody who wants to be involved

to organise exactly what our preferential relationship will be.

Anybody can do this. I could do this tomorrow.

What's your turnover in the last 12 months?

-We've only turned over £47,000 so far.

-Ah, so, OK.

What does that tell you about this business?

What it tells me about this business,

because the business will bring in £13,000 this month,

is that the business is now turning itself.

It is now breaking even and just moving into profit

and that is on the basis of the clients that I've got IN this month

and the pipeline of clients I've got coming back to me next month.

With bookings increasing,

it seems Dan's business is beginning to gain momentum.

Having built HIS online company into a multimillion-pound concern,

Nick Jenkins is keen to understand the potential size of Dan's market.

How many companies have you identified

who need to display these items online?

Let's talk about fashion cos it could be anybody, really.

In fashion, there's, I suppose,

about 46,000 mainly independent retailers.

OK, what do you think each of these, on average,

-each of these companies has the potential to spend?

-Um, £1,500.

£1,500, OK.

So, you're looking at, potentially, a £60 or 70 million spend...

You'd never get them all but, yeah.

..on photography by these types of companies.

That's the size of the opportunity that we've identified.

Then, of course, there's the problem of geographic spread,

so you could probably cover quite a lot from London,

but you'd need a network of these studios around.

We do have people coming down from...

We have people in Exeter, in York, in Northumberland.

Once they get it and they see the benefits of doing it,

they'll tend to send product along the way and then come on the train.

So, your better bet would be two or three of these -

Manchester, Birmingham, London, within regional centres.

-People would drive in with their stuff.

-Exactly.

-OK.

Food for thought,

as Dan highlights the existence of a rich seam of potential custom.

But is it a picture

which fashion tycoon Touker Suleyman will recognise?

I agree with you there's a big demand for this. I could give you...

-We have about 200 to 300 new shirts a week.

-Yes.

-Every week.

-Yes.

So, if you charge me £10 each, what does that come to?

-£2,000.

-Absolutely.

-Per week.

-Mmm-hmm.

-I'll take it.

-I'm sure you'll take it.

At the end of the day, if I came to you and saw that machine

and I liked it, I'd say, "Well, I'll buy my own cos I'm big enough."

I'm not aiming, in any way, at yourself.

I'm aiming at the other 98% who are out there

who are trading and HAVE to trade online now.

They have no choice and they can't just take snaps

because they don't look good, they can't compete,

and so, what I'm doing, is giving those people

the opportunity to use the technology that YOU will buy.

-I think your model confuses me.

-OK.

-It's just not clear.

I think you'll become a big PR for the machine

-but you haven't got a business yet.

-Mmm-hmm.

On that basis, I can't invest in you, so I'm out.

A major blow, as the Dragon who's a big player in fashion,

the very industry Dan's appealing to, turns his back on a deal.

Will Peter Jones, who has his own chain of high street camera stores,

share the opinion that Dan's business lacks focus?

I'm very confused here,

because the larger companies and the organisations,

they outsource this type of work and it is readily available,

so your market is the mass-market, small, online, e-based reseller.

And that market, they just, literally, take a snap photograph

-and they post it online themselves.

-No, they don't.

-They DO!

-No, they don't.

-Yes, they do.

-No, they don't.

-They don't need this.

-Of course they do.

Peter, I'm sorry, let me try again.

The majority of my clients have been doing exactly what you're saying.

That's why they come to me.

They come there because it's a pain in the arse

to do that sort of photography. It takes time, it takes a lot of time.

You don't get consistency.

I don't believe that there is even a business here.

For people that want to do this type of thing,

they set it on white paper on the floor.

It costs them £1 for the paper and they take a high-res picture

which is uploaded to their camera

and that's the reason I'm not going to invest and say that I'm out.

A snappy exchange which ends

with the photography entrepreneur losing his second Dragon.

Will Deborah Meaden or Sarah Willingham see

any more merit in the service he's offering?

I actually think there IS a massive need for this in small businesses.

But I don't think you've solved that need, I really don't, at all.

You're just based in Islington and me in Stoke,

I'm not going to get in the back of my lorry

and drive all my kit down to take the photos.

I'm either going to do it myself

or I'm going to get a local photographer,

who actually, is really, really good value.

He'll come and take it.

So, yeah, for that reason, I can't invest in it. I'm afraid I'm out.

The big issue for me rolls right back to the beginning.

You don't own the machinery,

you haven't got an exclusive deal with the guys who are supplying it,

so you, yourself, are entering a brand-new market

and sometimes, the entrepreneur can say to me,

"You've got to come with me because I am the only way of doing this."

Sadly, you're not able to say that.

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

Four Dragons have walked away from the deal,

each citing a different reason for their failure to invest.

E-commerce pioneer Nick Jenkins is now Dan's best

and, indeed, only hope of securing the £50,000

his expansion plans demand.

I do appreciate the value of good photography and good lighting,

when it comes to selling something online.

You spend a lot of money on a website,

you spend a lot of money on creating a business

and photography can sometimes really let that down,

so I totally get the product.

But there's nothing that you're offering that's exceptional,

so I'm afraid, for that reason, I can't invest. I'm out.

-Thank you.

-Good luck, Dan.

-Thank you, everybody.

-Thank you.

So, professional singer turned product photographer Dan

-must leave the Den empty-handed...

-God, that was frightening.

..his close-up encounter with the Dragons

having left him a little flat.

It's a bit of a pounding you can take out there.

But we will persevere and move on.

Entrepreneurs bring all manner of new food and drink products

into the Den, though many share the same retail dream.

The next part of the strategy

is that we really want to take the products to the supermarkets.

Now is the time to invest because it's about to explode.

Supermarkets need additional brands coming in

cos they need leverage against the big brands.

But it's a path to riches that's fraught with danger.

You turning up to Tesco or Sainsbury's,

you're never going to make it with this product.

Everybody shoots for the supermarkets.

I'm not sure that you're ready or suited.

That is a hard, hard world you're going into.

One of the big boys will come in and bulldoze you overnight.

And just when you thought things couldn't get any tougher,

our next entrepreneur is intent

on taking on one of Britain's best-loved food brands

and beating them at their own game on the supermarket shelves.

Dragons, hi.

My name's Ben Mason and I'm the founder of Masons Beans,

which is the country's first ever fresh baked bean brand.

I'm here, today, to ask you for £50,000

in return for 10% equity in my business.

But I want to tell you a little story first.

It starts 129 years ago, in 1886, when a young man called Henry Heinz

walked into Fortnum & Mason in London

with a case of his baked bean products.

Fortnum's bought the lot, becoming his first British customer.

Seven months ago,

I walked into Fortnum & Mason with a case of MY baked bean products.

They're hand-cooked, one-pot meals, made fresh for your fridge.

They're a really filling, hearty meal.

Fortnum's bought the lot, becoming my first customer.

So, why will this work?

Well, every day, three million Brits eat baked beans.

You see, we love baked beans, but our tastes are changing.

Tinned baked beans are in decline,

but premium chilled ready meals are absolutely booming.

So, we're seven months in, we're also now in Selfridges

and we're doing most of our volume through Ocado.

Essentially, we're now ready and primed for growth in the multiples.

All I need now is a Dragon on board to help me fund that growth,

but also open some doors for me.

-Who would like to try some beans?

-THE DRAGONS:

-Yes, please.

-Excellent.

An assured pitch from Ben Mason, who's seeking £50,000

in return for a 10% equity stake in his own-brand baked beans.

These are four different versions, are they?

There's four different recipes, yes.

Nick Jenkins wants to find out

exactly how Ben's beans came into being.

-Ben.

-Yes.

-Hi, I'm Nick.

-Hi, Nick.

-Great product.

What made you make the leap into starting your own thing?

Was there a eureka moment or...?

I started cooking baked beans myself and getting into it

and it made me realise how old-fashioned they are.

I can't think of a single other thing in the supermarket

that hasn't changed since the war, so that got me really excited,

as an ideas' person, that there was an opportunity here.

OK, and how big do you think that opportunity is?

So, in three years' time, I believe we can get sales to ten million.

That's based on looking at my current rate of sale with Ocado

and looking at...extrapolating that out to the other retailers

that I would like to pick off and get into.

-What is your revenue so far?

-So far, £25,000.

We've sold 10,000 pots, revenue is £25,000 and a 20% gross profit.

-Over what period?

-Since September last year, so seven months.

It's just a long way off, isn't it,

-from a vision of ten million in sales...

-Mmm-hmm.

-..when, in seven months, you've turned over £20,000-odd?

-Mmm-hmm.

A setback for Ben, as Peter Jones challenges his ambitious figures.

To stand any chance of meeting his targets,

Ben needs to get his beans into more shoppers' trolleys.

But the question for Sarah Willingham is how.

Where I'm really struggling is, in my head,

I can't see it in the retailers.

I tell you why is because, if I'm a retailer,

-where am I going to put it?

-I want to be next to upmarket ready meals

because that's exactly what they are.

When it comes to eating at home, it becomes a side dish, often.

You buy a piece of chicken, you buy some spinach

and you take a pot of Masons Beans.

I'm walking into my local Waitrose now

and I know exactly where this is going to be.

This is going to be, not on the main bit, on the left,

it's going to be on the right-hand side with the sandwiches,

the little pot of couscous. That's where, in my head, this is sat.

-What are you selling them for?

-£3.95.

-So, I put you in front of Sainsbury's...

-Mmm-hmm.

..and they look at this and they say they want to retail it for £2.99...

-Mmm-hmm.

-..to be in line with all the products they've got.

We are making everything by hand now.

We're soaking dried beans, we're making our own stock and everything,

so there are huge cost savings to be made at scale,

where we could actually bring production costs down as well.

Ben deflects Touker Suleyman's concerns

that the beans are too pricey.

But Sarah Willingham still has an issue

with the product positioning in the supermarket.

Ben, in terms of an investment,

I cannot get past that...

..big, big, big step for me,

which is where is it going to sit,

for a normal person shopping, to put it into their trolley,

to do with it what you want them to do?

I wish you all the very best,

-but I'm afraid I won't be investing, so I'm out.

-Thank you very much.

Ben's plans for supermarket supremacy are scuppered

by an outgoing Sarah Willingham.

And Peter Jones is worried

that the young entrepreneur has bitten off more than he can chew.

My concern is that, if you look at things

and people that have ever tried this,

like, for example, tomato ketchup, the famous HP Sauce,

Worcester sauce - the things that are embedded and ingrained -

when people try to compete in the specific target category,

they don't succeed.

I've got a completely opposite view to Peter.

What I think you're doing is you're leveraging.

I think, actually, having Heinz there

and such a well-known brand, everybody gets baked beans.

And there's a bit of quirkiness about it that says,

"We're not really baked beans, we're a lot better than baked beans."

Realistically, category for category,

I'm not really competing with Heinz baked beans.

The price point is so different,

I sit on a different part of the supermarket,

retailers don't see me as direct competition.

But from a sort of story point of view, it really gives me something

to push against, something to talk about and people love that idea.

Ben is fighting hard to silence the doubters

and he appears to have found an ally in Deborah Meaden.

He's had a challenging time so far,

but could the mood in the Den have begun to change?

If you want to enter the big arena...

-..you've got to look at your real costs.

-Mmm-hmm.

So, I would definitely like to go all the way back through the process

and get my team in Turkey to see what they can source

in the quality that you approve, so I'm going to make you an offer.

I will...

..offer you all the money...

..but I want 40% of the business.

You're good. You're what's holding me here.

No, actually, you're NOT all that's holding me here.

The branding, the positioning... I like the... I do this.

-I like the feel, I like the sense of this, you know?

-Yeah.

It's really hard to explain to people who don't get that,

but I just like the sense of it. So I'm going to make you an offer.

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

I want 40% of the business.

A second offer for Ben,

as Deborah Meaden joins Touker Suleyman

in stumping up all the cash, but in return for 40% of the business,

substantially more than the 10% Ben wanted to sell.

Does Nick Jenkins have a similar appetite for the deal?

-Ben, I'm going to make you an offer.

-OK.

-Um...

There's a certain level at which the entrepreneur doesn't have

enough left in it to be...to be as motivational as it needs to be.

And this business is going to require further dilution, I think,

at some point, because it's going to require further fundraising.

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

..but for 25%.

So, Nick Jenkins has undercut

Touker Suleyman and Deborah Meaden's 40% bids.

But he's still asking for much more of the business

than the 10% Ben is offering.

Time for supermarket supremo Peter Jones to show his hand.

Oh, boy! I'm normally incredibly decisive.

Cos I'd decided, when you came in and pitched,

I decided to make you an offer.

I think that you're going to be successful...

..but not with this business.

I don't see that this is going to achieve the dream that you have.

But you're an entrepreneur of the future, so I'm investing in YOU.

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

..for 35%.

An unusually indecisive Peter Jones has set aside his doubts

to make Ben an offer.

Four Dragons are now in...

Touker Suleyman and Deborah Meaden at 40%,

Nick Jenkins at 25% and Peter Jones at 35%.

Ben has some serious thinking to do.

-Maybe I'll take some time.

-Yeah, go and talk to the wall.

-It's the Wise Wall.

-I've seen. I've seen many a decision made.

DEBORAH MEADEN LAUGHS

So...

I don't feel comfortable giving away

more than 20% of my business at this stage.

I see huge value from all four of you,

so would any of you be willing to make me an offer at 20%?

Tell you what I'm going to do.

I'm going to make you an offer for the 40% that I talked about.

If you hit your targets over the next two years...

..I will give you 5% back

and I will give you the opportunity to buy a further 10% back

at the price that I paid, leaving me as a 25% shareholder.

I would be willing to give you a year, 18 months,

to buy back the 15%.

As far as further funding,

if you've got the business, it's not an issue,

cos it's all to do with financing the work in progress.

Deborah Meaden and Touker Suleyman continue to lock horns,

as they offer ratchet agreements that would see them both

potentially dropping to a 25% equity stake in Ben's company.

So, how low is Peter Jones prepared to go?

Cor! Wow.

I'm willing to...

I'm offering you all of the money for 35%, as you know.

I will drop down to 25%...

..the moment that my investment is repaid, whether it's now or...

It doesn't matter. I'll give you that open offer in perpetuity.

But you'll end up with 75% of the business and I'll have 25%.

Can I just actually simplify my offer?

I'm going to give you all the money for 20%.

Because, frankly, we'll spend that much.

We'll spend the few thousand pounds on the paperwork,

drawing up the buy-back agreement.

You might as well just call a spade a spade. Um...

Give me a few minutes.

A rare occurrence in the Den,

as Ben successfully negotiates all four Dragons down.

Three of the Dragons are now offering the full £50,000

but with buy-back agreements

that would mean their equity could drop to 25%.

But a deal-hungry Nick Jenkins has cut through the complex deals

and gone straight in at 20%,

the maximum Ben has said he'll accept.

OK, I have a decision.

I think I'd like to go with...

-..Nick's offer, please.

-Brilliant.

-Well done.

-Well done.

-Thank you very much.

-Brilliant pitch.

-Thank you.

-Well done.

-Well done.

-Very good.

-Yay!

-Bye.

So, finally, a deal and Ben leaves the Den

£50,000 and a new Dragon investor to the good.

That was a very odd decision and I'm pleased, now, I didn't get it.

And the last 5%. Bloody hell.

-Weird.

-Actually, it's not that odd a decision.

-Why?

Because you're assuming that you can...that Peter can just...

You know, anoint him with the Reggae Reggae sword and all will be well.

Now, yes, but at the same time,

don't underestimate quite what I'm going to throw at this.

Still to come on tonight's show...

Hit...

DRUM BEATS

..miss...

OK.

Sorry.

..and maybe.

Seriously, Yann, are you for real?

Next to face the Dragons is Lisa Young from Kent.

Lisa's spent the best part of two decades

working in the spray tan industry

and she's always on the lookout for new custom.

I think Peter Jones would love one of my spray tans.

We can create a nice sculpted body for him.

I think he'd really enjoy it. Do you want a drink or anything?

-It's too late now.

-Only if it's vodka. I'd drink the jug!

We've learned the pitch, learned the numbers.

It's been a massive build-up. I can feel my palpitations.

But today, I got up, I feel confident and excited.

Hello, Dragons.

My name is Lisa and I'm here to pitch for £60,000

for a 20% share in my company, Sunless Solutions.

My love of the tanning industry began over 17 years ago.

As a heavy sunbed user, I could see the damage

that was being caused to my skin

and I looked at alternative ways to tan.

I discovered spray tan, I was instantly hooked.

I worked with a chemist

and I established a professional spray tan solution.

OK... A professional spray tan solution....

Sorry. Um... I went on in 2008, to establish Sunless Solutions.

-I'd like to show you a demonstration of my product.

-Sorry, thank you.

The Tan in Tent is designed

to maintain the overspray within the tent.

SPRAY TAN MACHINE HUMS LOUDLY

It comes with a mesh ceiling

so that you can see the light coming through the tent.

It also comes with an extractor flap at the back

and extending floor flap.

-I think we kind of get it, don't we?

-We get that, yeah.

OK, that's fine, thank you. Sorry. OK.

Once you've finished, your client will step outside.

Your Tan in Tent instantly deflates.

Um...

OK... My company and my strapline, "Spray it, fake it, love it",

come with a registered trademark, along with my Tan in Tent,

designed to change the way we spray tan in the future.

The Tan in Tent has been designed to be machine washable

and tumble dryer safe. It's the first spray tan cubicle of its kind.

It currently has a patent in the UK, USA and Europe.

Oh, gosh...

Designed to change the way we...

The self-tan market itself is worth over £100 million.

With your investment, we'd like to take our brand global

and also the spray tan tent. Thank you for your time today.

We've got some spray tan survival kits to give out to you.

A range of spray tanning lotions

and an inflatable tent in which to apply them

are the dual offering from Lisa Young,

who's seeking £60,000 for a 20% share in her company.

I'd just like to say thank you to my girls now. Thank you.

But her flustered delivery has left Touker Suleyman unclear

about precisely what's on the table.

I'm a bit confused cos you were quite nervous.

What are we investing in? You've got the lotions and you've got the tent?

-Yes, we have.

-Right. As far as the lotions are concerned...

-Yes?

-You've had it since 2008?

-Yes.

Give us some figures for the last three years.

OK, the last three years. In 2012, we turned over £437,000.

-In the following year, we did £310,000.

-And last year?

-Er, £235,000.

-Yeah.

-With a...net of £69,500.

-Yep.

-And a profit of £4,800.

-That's mainly on the lotions?

That's mainly on the lotions.

We actually bought the first batch of Tan in Tents in in 2013.

-So, how many of those have you sold up to date?

-2,500.

-You've valued the business at £300,000.

-I have, yes.

And how did you...? Were you advised on that or you picked a figure?

No, I didn't pick a figure.

I spoke to the accountants and I think the reason we valued

our company at £300,000 is mainly because of the niche of the tent.

What's happening is that there is other tanning products out there,

other tanning companies out there,

but they all are looking to purchase this tent

because they all can see the way forward,

they can see it's the future.

With your other business,

you had sales of £437,000, £310,000, £235,000.

Is that because you were taking your eye off the ball

with your main business?

I would say that I was trying to develop this

-and I was using any capital I had to bring this product in.

-Yeah.

-OK.

-Cos I believed in it.

My heart always sinks when someone says,

"I want your money to go global,"

and you think, "You haven't even done Warrington yet."

You have to conquer your own market before you think about going global.

Then get your other business up to scratch,

-cos that's not a bad business.

-No, and I worked really hard.

It was blood, sweat and tears all the way.

So, you're clearly very capable.

But it IS small, it is niche, so I'm out.

Quicker than it takes one of her spray tans to dry,

Lisa has lost her first Dragon.

And Peter Jones has concerns over the size of the business opportunity too.

In terms of the Tan in Tent, I kind of get it,

but it's such a tiny, tiny market,

because this is only going to be purchased

by somebody that is in the trade.

This isn't something for somebody at home.

I've seen this happen so many times... Well, I say so many times.

God, Tara's going to kill me.

-When I watch this, it's almost like rapid.

-OK.

It's really quick, goes into the shower, does stuff,

the legs are done and it's like a glove thing and then comes out

-and looks like she's had ten days in Barbados.

-No problem.

-But I don't think you're claiming that's the market at all.

-I'm not.

She doesn't, for one minute, think this is about domestic.

-This isn't for Tara.

-This is for mobile and salons.

Anybody who's going to do this with their tan wouldn't be using that.

You need two people to spray tan, therefore it's not a home market.

But this is only a mobile sprayer then.

Sorry, it's mobile and it's for salons.

But salons are not going to have that

cos salons will have their own facilities.

I think if you walk into any salon, they've got a pop-up cubicle in it.

It smells. It smells of a spray tan. It's sticky, it's unhygienic.

Lisa has given the Dragons chapter and verse on the merits of her tent,

but so far, only Deborah Meaden appears to be on the same page.

She's grasped the market, so will she grasp the opportunity to invest?

I've got to be honest. I don't like tanning product an awful lot.

But...

The tent issue... I actually spent more time in a spray cubicle

-than I was expecting to when I did Strictly.

-OK.

By the time I'd got to them and they'd had loads of people in,

they were all slightly skewwhiff and whatever,

so I actually think it's really neat.

The Tan in Tents that we've got at the moment,

the cubicles with a wire, have had their day.

They're pennies to buy on the internet

but they also bend and break and they're unhygienic.

Now, there is the bigger tanning companies out there.

They all want to buy that patent off of me.

I'm amazed you got a patent on it

because it's basically a blow-up bouncy castle

without the bouncy castle bit at the bottom of it.

I spent quite a bit of money.

I've worked with my IP lawyer to make sure

that when it's for the purposes of spray tan, they can't be copied.

They could do it square, round, circular, it can't happen.

So, that's the interesting bit to me.

Right now, I want to understand that conversation or conversations

about patents, cos that's where the value lies, as far as I'm concerned.

OK. No problem.

Obviously we had quite a few meetings with the companies.

For me, at the time, spending three years developing something,

-I probably overvalued that at that point.

-What DID you value it at?

I asked for £500,000 to take my patent away from me

-and work with it.

-And did they counteroffer?

OK, they came back and they were offering something like £100,000,

so for me, it would be better to roll the dice

and take a chance on it.

-However, to take it forward, it does need investment.

-OK.

I'm going to tell you where I am. I'm not going to criticise that.

-I think that's a really good idea.

-OK.

I think you are loopy to have stopped conversations.

What I would have done, if I were you,

is I wouldn't have sold the patent. I would said,

"You pay me an upfront fee for the exclusive rights to it"

and license it.

But, actually, what you have told me is, as far as I'm concerned,

-the only thing that is of value in this company is that patent.

-It is.

And you've just told me what it's worth

and it ain't the £300,000 you're asking for.

There isn't enough value in it. I'm really sorry, but I'm out.

Lisa has significantly overvalued her patent. The result?

Deborah Meaden joins Nick Jenkins in declining the deal.

Have an initially sceptical Peter Jones or Touker Suleyman

heard anything to change their minds?

Lisa.

I can't get my head round the valuation.

You're not making any money.

So, on that basis, I'm out.

Lisa, I don't see that this is a business to really invest in

and make a lot of money. It's not for me, so I'm out.

It's not looking good for the beauty entrepreneur.

Four Dragons have now turned down her Tan in Tent.

Lisa has hardly been sprayed with offers,

but Sarah Willingham has been unusually quiet.

Is she intent on striking a deal?

I love that tent!

The issue is you've made it such a good product

that it's going to be machine washable and go in the tumble dryer

and I reckon that's going to last everybody ages.

And I think there's not enough people

that are going to be buying it

to actually make THAT a better route to market

than the one that Deborah was talking about.

Good luck with everything, but I'm afraid I'm not investing,

-so I'm out.

-OK, thank you.

So, a deflated Lisa leaves the Den with nothing.

Damn!

Lisa, what did you do that for? Oh!

Her spray tanning business may guarantee a healthy bronze

but as far as a deal with the Dragons is concerned,

she sadly failed to strike gold.

When I walked in and realised I'd messed up my pitch so much,

I kind of felt a little bit gutted from that point forward, to be fair.

I think, if I could do it again,

I'd probably walk in a lot different and fight for what I wanted

because it's a brilliant product, absolutely brilliant product.

Onto our final visitors now, who have found a way

to combine their two passions - computer science and music.

Let's see if they can "drum" up any interest in the Den.

I grew up playing drums but problems arose with the neighbours,

so I eventually had to give it up,

so that was part of the motivation for developing our product.

We would be excited about a Dragon coming on board

but, hopefully, we won't have to give away too much ownership

of the company to make it happen.

Hello, my name is Yann and this is my colleague Richard.

We're here today to ask for an investment of £75,000

into our company, Aerodrums,

in exchange for a 5% share of the business.

Before we tell you more about it,

Richard is going to demonstrate the product for you.

DRUM AND CYMBAL BEATS

DRUM ROLL

DRUM BEATS CONTINUE

As you can see,

using state-of-the-art motion tracking technology,

we have developed a musical instrument

that plays just like a normal drum kit.

So what's the point?

Air drumming solves a number of problems that all drummers face.

Number one - drum kits are extremely loud. Aerodrums is whisper quiet

if you wear headphones, so you won't disturb anyone.

Number two - drum kits are big and heavy.

In contrast, Aerodrums fits in a small bag, can be carried anywhere

and set up in minutes. Finally, drum kits are expensive.

At £129, Aerodrums is very affordable

and costs what most drummers would typically pay for a single cymbal.

Aerodrums was launched last year and our sales have been growing fast.

It is a one-of-a-kind product with very high growth potential

and we have no direct competition.

We have all patents, trademarked Aerodrums

and secured endorsements from high-profile drummers.

Before we invite your questions, would any of you like to try it?

A drum kit to stop the neighbours complaining,

the brainchild of scientists Yann Morvan and Richard Lee.

DRUM AND CYMBAL SOUNDS

They're looking for £75,000

for just 5% equity in their innovative product.

-PETER JONES:

-The concentration on his face!

LAUGHTER

But is it innovation worth £1.5 million?

DEBORAH MEADEN LAUGHS

Sarah Willingham wants to know if there's a business behind the brains.

I'm trying to understand the market potential of it.

-Can you learn to play the drums on this?

-Yes, you can.

So this can be aimed at professional drummers

that are maybe travelling and want to be able to practise

and also this is for people who might just want to get a feel for it

-without spending loads of money.

-Yeah.

So, you're in the very early stages of your business

but you say that you're already selling. What have you sold?

We launched in January last year, so currently,

we've sold about 1,100 so far.

So what does your revenue look like?

Revenue's good. To date, we brought in £96,000.

And what's the nearest thing to this that currently exists?

There's acoustic drum kits which is the normal thing

but when people think of an alternative,

they think of electronic drum kits.

These are still priced way beyond what we sell Aerodrums for.

But we don't view those as real direct competition

cos Aerodrums has the ability to let people go into drumming

who wouldn't have had the space or the neighbours to put up with this.

The musical entrepreneurs appear to be on a roll in the Den so far.

But with just a 5% equity stake up for grabs,

Touker Suleyman doesn't appear to be marching to their beat.

Richard and Yann, it's a gimmick.

-No, it's not.

-What is it then?

-It's a musical instrument.

How can you call a musical instrument a gimmick?

The fact really is it is very specialised.

I believe it's very small.

I'm just amazed how you got the audacity to come here today

and say, "This is worth £1.5 million,"

when you've turned over 100 grand.

Yeah, I think it's because you don't see the bigger picture.

The bigger picture is that I should be made to look a fool

to value this business at £1.5 million.

Explain to me how you got the valuation.

The valuation is pretty simple.

We looked at where...how our sales were growing,

on the back of fairly little publicity.

If we start selling, I don't know, into Turkey, Japan,

the market is big.

Do you think it's going to come for nothing?

-All that will cost you more than £1,000,000...

-No, it won't.

..to advertise, publicise it, whatever.

We need to disagree on your statement.

We can agree to disagree all day long. You know why?

Because I look at businesses all the time

and for you to come here today with this valuation for 5%, it's a joke!

-So, for that reason, I'm out.

-Thank you.

-Thanks.

A clash of personalities has left Touker Suleyman rattled

and Richard and Yann without a deal.

Will they be any more in tune

with the notoriously hard to please Peter Jones?

Guys, I think it's really quite impressive.

-Thanks.

-And I think that the technology

that you've used to create it is quite advanced.

My issue is the widestream nature of the market, then the endgame.

How could we get a deal away with a mainstream player?

In terms of the market,

this is something that every drummer stands to benefit from,

so we think that the market potential is huge,

especially in light of the fact

that most drummers still don't know about it.

In terms of the mass market as well,

we could definitely branch into the video game side

and make something that has mass appeal.

I want to be able to go and buy, on the shelf, that Aerodrums game.

And next to Aerodrums DVD, I want to buy the two-stick pack.

-How could we get there?

-We could easily go there.

The main problem with that

is needing to be a licensed games developer.

It probably would work better to license out our technology

and let them do that heavy lifting that they already do.

I do think that it's going to need a lot of work

to make this into a mass-market product

and I think you're going to need quite a bit of help with that.

I'm going to make you an offer.

But I think this is one area

where sometimes two brains is better than one.

So, I'm going to offer you half of the money...

..but I want 20%.

Peter Jones makes his move,

sold on the mass-market appeal of the Aerodrums.

But for just half of the money, he wants 20% equity, way more

than the 5% Yann and Richard were looking to sell for ALL the cash.

Will another Dragon want to partner with him or even cut their own deal?

Guys, can I just ask a bit more about the size of the market?

How many people in the UK play the drums, for example?

-Well, we don't have that figure.

-Ish.

-In the US, it would be about a million people, I think.

-In the US?

Yeah. I would imagine the proportion is very similar.

200,000 maybe.

In order to sell lots of these, they...

Really, I need to be buying them for my son.

If it was done right, you could make a game that's fun to play

and educational that would teach you how to play drums using Aerodrums.

But, to be honest, from the get-go, we knew this wasn't a toy

or a fad and we wanted people to take it seriously.

I'll tell you where I am.

I think you've created something that almost looks like magic.

But I have no experience whatsoever in this industry.

It's way too big a leap for me to understand it.

It's not an investment for me.

I'm not the right Dragon for you, so I'm out.

-Thanks.

-Thanks a lot.

There's a problem. And that is I'm with Sarah.

I was really struggling with the size of the market

and you weren't able to answer that.

I can't get involved without having an inkling

over whether we're talking ten people or ten million people.

I genuinely have absolutely no idea. There's a gaping hole

that I'm really sorry you guys didn't fill for me.

-I won't be investing. I'm out.

-OK.

-Thank you.

Two more of the Dragons are gone,

with doubts raised over the size of the potential market for the product.

Richard and Yann's fate now comes down to Nick Jenkins.

I have a music educational software business

that I started quite recently.

It's largely designed for stringed instruments,

so I've done quite a bit of analysis of this market.

I do think this has mass appeal

and I think, if you combine that with the educational side,

then I'm very interested in addressing that part of the market.

But what I'm looking at is an incomplete management team

and an incomplete set of skills.

In terms of overall commercial strategy

and in terms of building a brand, that's probably what you're missing

and that's certainly what we can add.

So, I'm going to make you an offer.

I will offer you the other half - £37,500 -

for 20% of the business.

Do you want to go to the back and have a little discussion

-with your drumsticks?

-Yeah.

With Nick Jenkins offering to put up

the other half of the money they've asked for,

Richard and Yann have a lot to consider.

INAUDIBLE DISCUSSION

The entrepreneurs must decide

if they're willing to give up an eye-watering 40% of their company,

35% more equity than they came to sell.

INAUDIBLE DISCUSSION

This is going to sound a bit stingy, but we are going way beyond

what we had agreed together before coming here.

What we are suggesting is that you would each invest half

and you would each get 10% of the business.

We are four times beyond what we came in asking here.

That's half of what our offer is.

The bit that I think that we're bringing to this party is,

you know Nick's background online

and in terms of MY background in looking at products

and pushing them into the market on a global scale,

I think you've got two incredibly individual, yet powerful, people

to be working alongside you and there needs to be an upside.

If I was to own 10% of this business,

knowing the amount of work that's going to need to be done,

my level of excitement wanes.

I would be prepared to go down to 15%.

I'd match that as well.

You're now getting... Our counter is all of the money for 30%.

It would be so crucial that we get along well

if you're going to have a huge involvement in the company

at that level of equity. It's not a decision we can make now.

We'd need to have a few drinks with you.

Seriously, Yann, are you for real?

-Have you watched Dragons' Den?

-I have, yeah.

-So you know you come in here, you ask for investment.

-Yes.

You get an offer for investment and then you try and say

that we want to go out for a drink and chat

before you decide whether it's a yes or no?

You've gone from a very intelligent man

and made yourself look completely stupid in 30 seconds.

You basically have to say yae or nay now

and if you say nay, there's no going back afterwards.

But you both are not the only experienced business people

on the planet.

Are you saying you're not going to accept an offer for 30%?

No. I rejected the offer.

I think this is one of those moments which is always disappointing,

for either party, to get a rejection, but I have to say,

I think this is something you're going to live to regret.

Thank you very much. Goodbye.

So, an opportunity disappears into thin air

as Aerodrums' inventors decide not to concede

to the Dragons' equity demands.

-DEBORAH:

-They're mad!

-SARAH:

-That's so stupid. Can't believe it.

-They ARE mad scientists.

-Ultimately, they turned it down for 10%.

That's the reality of what just happened.

-They just turned down that amazing offer.

-For 5% each.

-Yeah, 5% each!

We're always going to be wondering what would have happened

if we accepted,

but we just felt it was too much of the company to give away.

It takes real courage to play hardball with the Dragons

over equity demands and we've seen two examples of it tonight,

with contrasting outcomes.

Ben finally did shake on a deal with Nick Jenkins,

while Richard and Yann opted to keep hold of all their equity.

You'll have your own view

as to whether they each made the right decision,

but all business is about making a choice

and then making the best of it.

-Just let it settle.

-Coming up next time...

It will settle into a perfect pint.

You're about to torpedo what is a lovely business.

It's a bit like you're the honeypot.

I just don't want to be the one that's stung.

I think you're going to make a go of this.

The real question for me is do I want to have that journey with you?