0:00:07 > 0:00:09EVAN DAVIS: Wealthy...
0:00:12 > 0:00:13..astute...
0:00:14 > 0:00:15..innovative...
0:00:17 > 0:00:20..fearless and shrewd.
0:00:22 > 0:00:25These are the Dragons.
0:00:25 > 0:00:27ROARING
0:00:30 > 0:00:33The heat is on in the Den.
0:00:33 > 0:00:35Together with formidable business giants
0:00:35 > 0:00:37Peter Jones and Deborah Meaden
0:00:37 > 0:00:43are global fashion tycoon with over 40 years' retail experience,
0:00:43 > 0:00:44Touker Suleyman...
0:00:45 > 0:00:48..the woman who turned her passion for food and drink
0:00:48 > 0:00:52into a multi-million pound business empire, Sarah Willingham,
0:00:52 > 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 > 0:01:06For entrepreneurs, it's the toughest business pitch of their lives.
0:01:06 > 0:01:11Do they have what it takes to face the Dragons?
0:01:11 > 0:01:13ROARING
0:01:16 > 0:01:18Welcome to Dragons' Den
0:01:18 > 0:01:20for the last time in the current series.
0:01:20 > 0:01:24We have our final crop of aspiring entrepreneurs
0:01:24 > 0:01:27looking for cash to build their businesses.
0:01:27 > 0:01:29And here in the Den, they come face to face
0:01:29 > 0:01:33with experienced entrepreneurs with the cash to invest.
0:01:35 > 0:01:37- Yes!- Coming up on tonight's show...
0:01:37 > 0:01:39Guys, exceptional product.
0:01:39 > 0:01:43I'm actually quite shocked by how good it is.
0:01:43 > 0:01:44Don't give me the salesman talk now.
0:01:44 > 0:01:47If the product had sold out,
0:01:47 > 0:01:50would they have come back to you, yes or no?
0:01:50 > 0:01:53- If it had sold out... - Yes or no?- Yes.
0:01:53 > 0:01:55You're coming in here trying to value this business
0:01:55 > 0:01:58at £1 million. I find that insulting.
0:01:58 > 0:02:01You explained it. You explained why your margin was going up,
0:02:01 > 0:02:04and your margin's not going up. That is so blinking frustrating.
0:02:04 > 0:02:07You've been stood here for a while now,
0:02:07 > 0:02:09- and I still don't get it. - Have I come across that badly?
0:02:09 > 0:02:12You've come across like you don't know what you're talking about.
0:02:18 > 0:02:20First into the Den,
0:02:20 > 0:02:21with a product designed
0:02:21 > 0:02:24to revolutionise back-garden football
0:02:24 > 0:02:26are Jonathan Cowan
0:02:26 > 0:02:28and his daughter Tabitha.
0:02:34 > 0:02:36Wear the floor out.
0:02:37 > 0:02:39HE CHUCKLES
0:02:40 > 0:02:44I'm excited about today, but somewhat nervous, I have to say.
0:02:44 > 0:02:45I am completely bricking it
0:02:45 > 0:02:48that I'm going to destroy my reputation.
0:02:48 > 0:02:51I think I'm going to get a tough time from Peter.
0:02:51 > 0:02:52(Ready?)
0:02:52 > 0:02:54I'm going in with a tough valuation
0:02:54 > 0:02:56and I don't think he's going to like it,
0:02:56 > 0:02:59but I'm going to persuade him that my valuation is...right,
0:02:59 > 0:03:01or nearly right.
0:03:08 > 0:03:12Good morning, Dragons. My name's Jonathan Cowan.
0:03:12 > 0:03:15I'm the inventor of Open Goaaal
0:03:15 > 0:03:18and I'm here to offer you a 15% share in my business
0:03:18 > 0:03:21for £150,000.
0:03:21 > 0:03:23This is my daughter Tabitha,
0:03:23 > 0:03:26the inspiration behind my product and a really good footballer.
0:03:26 > 0:03:30She plays for Arsenal Ladies and for Watford.
0:03:30 > 0:03:32However, like so many other kids,
0:03:32 > 0:03:37she has this habit of hoofing the ball over the bar.
0:03:37 > 0:03:39How I wince when I hear that phrase...
0:03:39 > 0:03:43Daddy, please can you get my ball back?
0:03:43 > 0:03:46And then there's the fetching every time the ball goes over,
0:03:46 > 0:03:48having to go down the garden.
0:03:48 > 0:03:51And of course, the white plastic goal -
0:03:51 > 0:03:55you buy it, five minutes later, it breaks.
0:03:55 > 0:03:58So, Dragons, the solution is Open Goaaal.
0:03:58 > 0:04:01Tabitha, shall we show the Dragons how it works?
0:04:05 > 0:04:08As you can see, when the ball misses,
0:04:08 > 0:04:11it rebounds straight back.
0:04:11 > 0:04:13What you can see is we have a white goal
0:04:13 > 0:04:15which is surrounded by a ten-foot-high wall
0:04:15 > 0:04:18of black netting suspended from the top of two poles.
0:04:18 > 0:04:22The poles move closer together for people who have smaller gardens.
0:04:22 > 0:04:24And the reason it's called an Open Goaaal
0:04:24 > 0:04:27is cos it opens and closes like a curtain,
0:04:27 > 0:04:29which we can demonstrate.
0:04:30 > 0:04:31You walk it out of the way.
0:04:31 > 0:04:33If this was at the end of your garden,
0:04:33 > 0:04:35you'd now be looking straight down the garden
0:04:35 > 0:04:37rather than having to stare at your goal.
0:04:38 > 0:04:42We have a UK patent granted, and I've signed a deal
0:04:42 > 0:04:45with the world's largest manufacturer of trampolines
0:04:45 > 0:04:50who's taking it to their customers in the US and the UK as we speak.
0:04:50 > 0:04:52Dragons, thank you for listening to me.
0:04:52 > 0:04:54As they say in that iconic commentary
0:04:54 > 0:04:57at the end of the 1966 World Cup final,
0:04:57 > 0:05:00"They think it's gone over. It hasn't now."
0:05:01 > 0:05:02Thank you, Tabitha.
0:05:04 > 0:05:07A Premier League performance from Jonathan Cowan
0:05:07 > 0:05:08and daughter Tabitha.
0:05:08 > 0:05:10Would anyone like to have a go?
0:05:10 > 0:05:12- I'll have a go.- I'll just fasten this back into place.
0:05:12 > 0:05:14Jonathan is hoping to tempt the Dragons
0:05:14 > 0:05:17to part with £150,000...
0:05:19 > 0:05:24- Yes!- ..in return for a 15% share in his product for budding Beckhams.
0:05:24 > 0:05:26- I will try and miss this time. - JONATHAN LAUGHS
0:05:26 > 0:05:28Touker Suleyman may already be on target...
0:05:28 > 0:05:30They'll be impressed by missing.
0:05:30 > 0:05:33DRAGONS CHEER
0:05:33 > 0:05:37..but can the entrepreneur win the support of the Den?
0:05:39 > 0:05:41Jonathan, hi. Sarah.
0:05:41 > 0:05:43I do love it when somebody comes into the Den
0:05:43 > 0:05:46and you're solving a problem that you didn't really know you'd got
0:05:46 > 0:05:47until they point it out,
0:05:47 > 0:05:50and then you go, "Yes, that does happen all of the time."
0:05:50 > 0:05:52So, what is the size of the market?
0:05:52 > 0:05:54How many people have got space for this at home?
0:05:54 > 0:05:57OK. The total market size for football goals
0:05:57 > 0:05:59is about 800,000 units a year.
0:05:59 > 0:06:03Samba, who are the leading brand out there in terms of brand name,
0:06:03 > 0:06:07they shift, as I understand it, about 50,000 units a year.
0:06:07 > 0:06:10So, you're restricted because you do need to have
0:06:10 > 0:06:13significantly more room, I think, to put your product in.
0:06:13 > 0:06:17A lot of my mates wouldn't have room for this.
0:06:17 > 0:06:19- Mm-hm.- So, what proportion of that
0:06:19 > 0:06:21do you reckon you'll be able to eat into?
0:06:21 > 0:06:23Well, let me first clarify something.
0:06:23 > 0:06:24I'm not sure if it came through in the pitch.
0:06:24 > 0:06:27This is deliberately designed to be narrower.
0:06:27 > 0:06:32So, you can set it up in your garden with this pole here,
0:06:32 > 0:06:33- one metre from there...- Yeah.
0:06:33 > 0:06:36..and that makes the whole thing six metres across.
0:06:36 > 0:06:40We believe that we can deliver 24,000 units.
0:06:40 > 0:06:43I actually believe, if anything, we've under-specced.
0:06:43 > 0:06:45The market growth potential
0:06:45 > 0:06:46is all about overcoming barriers to entry.
0:06:46 > 0:06:49OK. Well, let's talk about where are you today.
0:06:49 > 0:06:52Give us an idea of the business in terms of numbers.
0:06:54 > 0:06:56Um...let me start by the history
0:06:56 > 0:06:59and then tell you what the story is right now.
0:06:59 > 0:07:03Try and kind of... Cos you're tending towards verbose.
0:07:03 > 0:07:04Just focus on the numbers.
0:07:04 > 0:07:08In terms of money, 400,000 turnover, year one.
0:07:08 > 0:07:10Year two, 800,000.
0:07:10 > 0:07:13Year three, 2.5... 2 million.
0:07:13 > 0:07:14Year four, 3.5 million.
0:07:17 > 0:07:20Jonathan may be talking a good game,
0:07:20 > 0:07:24but are his financial projections built on solid foundations?
0:07:25 > 0:07:28A financially forensic Peter Jones
0:07:28 > 0:07:30is keen to pin down the details of the deal.
0:07:33 > 0:07:37- What's the cost of your product? - Landed in the UK, £49.
0:07:37 > 0:07:39What do you sell it to your distributor for?
0:07:39 > 0:07:42I'd sell it to a distributor for £78.
0:07:42 > 0:07:44And what's the retail price of your product?
0:07:44 > 0:07:46My product? This is £149.
0:07:46 > 0:07:49A multiple is usually two and a half times, so, yeah.
0:07:49 > 0:07:53So, if we pick on £20 profit per unit, for argument's sake,
0:07:53 > 0:07:55how many units are you going to sell?
0:07:55 > 0:07:58- 5,000 in year one is a mix... - Let's just focus on that.- Mm-hm.
0:08:00 > 0:08:02What will that make you in terms of your gross profit?
0:08:03 > 0:08:065,000 times £20, so 100,000.
0:08:06 > 0:08:09£100,000 gross profit.
0:08:11 > 0:08:14And you're coming in here trying to value this business at £1 million.
0:08:14 > 0:08:15I find that insulting.
0:08:18 > 0:08:21OK. I haven't yet had the opportunity to tell you
0:08:21 > 0:08:24- the exciting things happening... - No, you can sell it
0:08:24 > 0:08:26- as much as you like...- OK.
0:08:26 > 0:08:29..but it doesn't stack up to try and suggest
0:08:29 > 0:08:31that you are going to create a business
0:08:31 > 0:08:34out of poles and a back net.
0:08:34 > 0:08:36It's not poles and netting.
0:08:36 > 0:08:38I have worked for 20 years in brand development.
0:08:38 > 0:08:41I have never had so much positive feedback
0:08:41 > 0:08:43about the benefits of this product
0:08:43 > 0:08:45as I have about anything I've worked on.
0:08:45 > 0:08:47I placed it in the garden
0:08:47 > 0:08:49of an A-list Premier League footballer...
0:08:49 > 0:08:51No, no, no, Jonathan, this is all noise.
0:08:53 > 0:08:57The reality is, you need to have something of substance behind that.
0:08:57 > 0:09:00Peter, I need to say to you, look, this is a growth business.
0:09:00 > 0:09:02There's no right or wrong way to value a growth business.
0:09:02 > 0:09:04I can go on to the crowd funding sites right now
0:09:04 > 0:09:08and there are tons of businesses with different levels of valuation
0:09:08 > 0:09:10- based on people's belief... - No, no, no.
0:09:10 > 0:09:12- ..in the future potential of that business.- No, no, no.
0:09:12 > 0:09:14That's not good enough in here.
0:09:15 > 0:09:17That is just not good enough in here
0:09:17 > 0:09:21because I am a serious investor and it needs to stack up.
0:09:24 > 0:09:27It's going to be wasted breath, in my opinion,
0:09:27 > 0:09:29- for anybody to have dialogue with you.- OK.
0:09:29 > 0:09:33This is never, ever going to be worth £1 million.
0:09:36 > 0:09:39Jonathan was anticipating a grilling,
0:09:39 > 0:09:41and Peter Jones has duly delivered.
0:09:44 > 0:09:45But it's not his valuation
0:09:45 > 0:09:49that's caught retail magnate Touker Suleyman's attention.
0:09:52 > 0:09:55- Jonathan, your 149 retail price...- Yes.
0:09:57 > 0:10:00..will not give the retailer a margin.
0:10:02 > 0:10:05- You said your wholesale price is 78.- Yes.
0:10:05 > 0:10:08You talked about retailers making a 2.5 margin?
0:10:08 > 0:10:10That's the rough multiple, yes.
0:10:10 > 0:10:13Yes, so, at 78 at 2.5, what would that make it?
0:10:13 > 0:10:15Well, um, 260... Um...
0:10:16 > 0:10:1878, 104, um...
0:10:24 > 0:10:28- Multiply 78 by 2.5. - Yeah, it's, um...
0:10:28 > 0:10:31- It's £200, isn't it?- Yes.
0:10:32 > 0:10:37If I'm a retailer and I'm making a low margin
0:10:37 > 0:10:40on a heavy product that takes a lot of space,
0:10:40 > 0:10:42why should I buy it from you?
0:10:42 > 0:10:43I, um...
0:10:45 > 0:10:47Cos he'll come back to you and say,
0:10:47 > 0:10:51"You're a nice guy, Jonathan. I can't pay 78."
0:10:51 > 0:10:54- No, he will. I-I, um... - You're flabbergasted.
0:10:54 > 0:10:57- I'm having one of those moments. - Yeah, exactly. So, what have we got?
0:10:57 > 0:11:00We've got a product where you may have to subsidise the price
0:11:00 > 0:11:04- to give the retailer his margin.- Mm-hm.
0:11:04 > 0:11:07- And then 100,000 GP becomes 50,000 GP.- Mm-hm.
0:11:07 > 0:11:11- Correct?- It would do if what you're saying is right.
0:11:11 > 0:11:13And what you're saying is impliedly right
0:11:13 > 0:11:15from where we're at here.
0:11:15 > 0:11:17But I'm stood here feeling like in idiot
0:11:17 > 0:11:19because I can't understand what I've just said wrong.
0:11:22 > 0:11:25- Tell you what, Jonathan...- Yeah. - ..I can't invest in you...- Yes.
0:11:25 > 0:11:27- ..because I'd get a lot of muddled figures.- Yeah.
0:11:27 > 0:11:30And I wouldn't need one of those cos when I kick a ball,
0:11:30 > 0:11:33- I kick it straight into the goal. - THEY LAUGH
0:11:33 > 0:11:35Touker, that's quite funny.
0:11:35 > 0:11:39- So, on that basis...- Yes.- ..I'm out.
0:11:43 > 0:11:47An own goal for Jonathan as confusion over his margins
0:11:47 > 0:11:50accounts for Touker Suleyman's withdrawal from a deal.
0:11:51 > 0:11:55And a brand-conscious Nick Jenkins is concerned that his product
0:11:55 > 0:11:57could be easily copied.
0:11:59 > 0:12:02Jonathan, I think it's a good product,
0:12:02 > 0:12:04but what I'm concerned about slightly is
0:12:04 > 0:12:07that you can only make a certain amount of margin on this
0:12:07 > 0:12:09before someone else will find another way
0:12:09 > 0:12:11of making a very similar thing
0:12:11 > 0:12:15that doesn't breach the patent that you've got.
0:12:15 > 0:12:18And so if this turned into a big market,
0:12:18 > 0:12:20the likelihood is that someone is simply going to say,
0:12:20 > 0:12:23"Let's find another way of sourcing these at a little bit less,"
0:12:23 > 0:12:24and cut you out of it, and that's it.
0:12:26 > 0:12:30So, for that reason, I'm afraid I can't invest in this.
0:12:30 > 0:12:32- I'm out.- OK.
0:12:34 > 0:12:37The real sticking point for me is the market.
0:12:37 > 0:12:41The size of the opportunity, there's such a cap on it.
0:12:42 > 0:12:45When you talked about the size
0:12:45 > 0:12:47of the largest player in the market...
0:12:49 > 0:12:52..it's too small an opportunity for me to invest in.
0:12:52 > 0:12:54- I wish you the very best with it...- Thank you.
0:12:54 > 0:12:56..but I'm not going to invest, and I'm out.
0:12:58 > 0:13:04Another two Dragons draw a line under a deal with Jonathan.
0:13:04 > 0:13:08Has the entrepreneur done enough to keep Deborah Meaden onside?
0:13:11 > 0:13:14Jonathan, can I tell you what I think's happened here?
0:13:14 > 0:13:18- You've lost sight of what an investor has to hear.- Understood.
0:13:18 > 0:13:20- Let me...- You've got a really simple business here
0:13:20 > 0:13:22- and you're over-complicating it.- OK.
0:13:22 > 0:13:25I want to tell you the story, the bits I haven't told you.
0:13:25 > 0:13:26I only want to know if it's a deal.
0:13:26 > 0:13:29- An actual signed deal. - I have a signed licence agreement
0:13:29 > 0:13:30with a company called SportsPower,
0:13:30 > 0:13:33who are the world's largest manufacturer of trampolines.
0:13:33 > 0:13:37They supply Walmart, Kmart, Target, um...
0:13:37 > 0:13:40- They're huge. So...- They're huge. - ..that's brilliant.
0:13:40 > 0:13:42What does that mean to you?
0:13:42 > 0:13:44We get a percent of the FOB price
0:13:44 > 0:13:47from their factory for every single sale.
0:13:47 > 0:13:48What percentage is that?
0:13:48 > 0:13:516.5% and that obviously drops straight through to the bottom line,
0:13:51 > 0:13:54- enhancing the margin. - OK. And what is the target?
0:13:54 > 0:13:56There is no written target in the plan.
0:13:56 > 0:13:58They have a non-exclusive rolling 12-month agreement
0:13:58 > 0:14:01to go out and sell it to their target audiences,
0:14:01 > 0:14:03mainly UK and US.
0:14:04 > 0:14:07Your problem there is that an agreement without any targets,
0:14:07 > 0:14:11- with just a rolling plan, doesn't mean...- Mm-hm. Agreed.
0:14:11 > 0:14:14- Again, you've lost value in that. - Yes.- So, agreement with...
0:14:14 > 0:14:17Very tight agreement, lots of targets, minimums,
0:14:17 > 0:14:20cash upfront - that's at the one end of the scale.
0:14:20 > 0:14:21The other one is if they sell, they sell
0:14:21 > 0:14:24- and if they don't, they don't. - Understood.- That's at the other.
0:14:24 > 0:14:26And sadly, you're at that end,
0:14:26 > 0:14:28- so you're not underpinning value at all.- Understood.
0:14:29 > 0:14:32- I won't be investing, Jonathan. - OK, thank you.- I'm out.
0:14:35 > 0:14:38Just Peter Jones now remains.
0:14:38 > 0:14:40Will he be able to forgive
0:14:40 > 0:14:42the entrepreneur's ambitious valuation
0:14:42 > 0:14:46to give Jonathan the opportunity for a late comeback?
0:14:48 > 0:14:52Jonathan, I think that you will sell this product,
0:14:52 > 0:14:53and I think people will buy it.
0:14:56 > 0:14:59So, there is no reflection on what you've created
0:14:59 > 0:15:02cos I think you've created something that's really good.
0:15:02 > 0:15:05The big issue, and the reason why you've got my hackles up,
0:15:05 > 0:15:09is purely down to your valuation.
0:15:09 > 0:15:13Even if it was slightly tweaked, there is no possible way,
0:15:13 > 0:15:17based on the opportunities and the size of that opportunity,
0:15:17 > 0:15:19that we could get even close.
0:15:19 > 0:15:23And that's the biggest error that you made coming in here today.
0:15:23 > 0:15:25That's the reason why I'm not going to invest
0:15:25 > 0:15:27- and say that I'm out. - OK. Thank you.
0:15:27 > 0:15:30But I hope it's been an experience for you that you can...
0:15:30 > 0:15:34- It certainly has. Thank you. - LAUGHTER
0:15:35 > 0:15:40So, final score - Dragons five, entrepreneur nil.
0:15:41 > 0:15:43With the contest at an end,
0:15:43 > 0:15:46all that remains is the post-match analysis.
0:15:46 > 0:15:49It was a cracking presentation, but he just lost sight of the value.
0:15:49 > 0:15:51He needs to kick his valuation round a bit more.
0:15:53 > 0:15:57I expected a tough ride with Peter, and I got killed.
0:15:57 > 0:15:59HE LAUGHS
0:15:59 > 0:16:00Gutted.
0:16:00 > 0:16:04But when your credibility is blown, then that's their privilege,
0:16:04 > 0:16:06and that's what happened.
0:16:16 > 0:16:17Next to face the Dragons
0:16:17 > 0:16:20are brothers Harry and Charlie Thuillier.
0:16:20 > 0:16:22HE SIGHS
0:16:22 > 0:16:24I knew this business, to really work,
0:16:24 > 0:16:26had to have Harry on board. We are polar opposites.
0:16:26 > 0:16:28We're good at totally opposite things,
0:16:28 > 0:16:30we're awful, luckily, at opposite things,
0:16:30 > 0:16:31so we work really well together.
0:16:31 > 0:16:35The brothers have devised a product which they hope will appeal
0:16:35 > 0:16:39to both the health-conscious and those looking for a treat,
0:16:39 > 0:16:42and they're determined to keep it very much in the family.
0:16:42 > 0:16:44I don't think I'd choose anyone else to go into the Den with.
0:16:44 > 0:16:46The only other person would probably be our dad
0:16:46 > 0:16:48cos he can actually add up and do his sums
0:16:48 > 0:16:50and that'd probably be quite useful.
0:16:50 > 0:16:52- It'll be fine.- Mm-hm. - You know it'll be fine.
0:16:59 > 0:17:02Hi, I'm Harry, and this is my brother Charlie,
0:17:02 > 0:17:05and we're here to pitch for £60,000
0:17:05 > 0:17:09in return for 7% of our business Oppo Ice Cream.
0:17:10 > 0:17:13Oppo is the world's healthiest dairy ice cream.
0:17:13 > 0:17:17It's made using virgin coconut oil and stevia leaf,
0:17:17 > 0:17:19which makes it really creamy and sweet,
0:17:19 > 0:17:21but with fewer calories than an apple
0:17:21 > 0:17:24and a third of the sugar of an apple as well.
0:17:24 > 0:17:26We add a superfood boost
0:17:26 > 0:17:28to each of the three flavours that we have.
0:17:28 > 0:17:31So, we have Madagascan vanilla and baobab,
0:17:31 > 0:17:33salted caramel and lucuma,
0:17:33 > 0:17:35and mint choc with spirulina.
0:17:36 > 0:17:39The idea started in 2011 when Harry and I travelled to Brazil
0:17:39 > 0:17:41to break the unofficial world record
0:17:41 > 0:17:44for the longest distance travelled by kite.
0:17:44 > 0:17:47We ended up running out of food
0:17:47 > 0:17:51so we lost 8kg of body weight within two weeks.
0:17:51 > 0:17:53This led us to try and find local superfoods.
0:17:53 > 0:17:58These foods not only tasted incredible, really indulgent,
0:17:58 > 0:18:01but they're also, obviously, really, really healthy,
0:18:01 > 0:18:02which led us to think,
0:18:02 > 0:18:05"Why do our favourite foods have to be not that good for us?"
0:18:05 > 0:18:10So, when we came back from Brazil, I quit my job in 2012
0:18:10 > 0:18:12and founded Oppo Ice Cream.
0:18:12 > 0:18:15We launched seven months ago into Waitrose and Ocado.
0:18:15 > 0:18:17Since then, we've launched into Whole Foods
0:18:17 > 0:18:19and three regional distributors.
0:18:19 > 0:18:24We're just about to launch into Budgens as well, Compass Group
0:18:24 > 0:18:28and a high-street Italian restaurant backed by a celebrity chef.
0:18:28 > 0:18:31We'd love you to have a taste of the ice cream.
0:18:32 > 0:18:36An assured pitch from Charlie and Harry Thuillier,
0:18:36 > 0:18:41who are seeking £60,000 in return for a 7% share
0:18:41 > 0:18:43in their range of low-sugar ice creams.
0:18:43 > 0:18:44(Wow.)
0:18:46 > 0:18:48(That is very good.)
0:18:48 > 0:18:52The Dragons all appear to be enjoying their free samples
0:18:52 > 0:18:54with one notable exception.
0:18:56 > 0:18:58This is a really difficult one for me
0:18:58 > 0:19:02- because I own an ice cream business.- Yeah.
0:19:02 > 0:19:05- Which leaves me with a little bit of a conflict...- Of course.
0:19:05 > 0:19:08..because I'd want to remain completely neutral,
0:19:08 > 0:19:10but actually say that, because of that reason,
0:19:10 > 0:19:13I just, right now, need to declare myself out.
0:19:13 > 0:19:17- Of course.- So, I'm going to say those two magic words - I'm out.
0:19:20 > 0:19:25Only minutes in, Deborah Meaden stands down.
0:19:25 > 0:19:29But with four Dragons remaining, it's all still to play for.
0:19:31 > 0:19:36- Guys, exceptional product. - Thank you.- Really, really good.
0:19:36 > 0:19:39Really good. I'm actually quite shocked by how good it is.
0:19:39 > 0:19:40I didn't expect it to.
0:19:40 > 0:19:44I've done a lot of cooking with sugar alternatives,
0:19:44 > 0:19:45with stevia leaf,
0:19:45 > 0:19:51and it's so, so, so hard to replace sugar, actually...
0:19:51 > 0:19:53- It's a real challenge. - ..in an indulgent product.
0:19:53 > 0:19:55We know the trend is there. You just have to look at any paper.
0:19:55 > 0:19:58You open any paper and it's there. They're always talking about sugar.
0:19:58 > 0:20:01People want to reduce sugar.
0:20:01 > 0:20:02- Can I pick you up on that? - Of course.
0:20:02 > 0:20:05- If you were to make a comparison of 100g and 100g...- Yeah.
0:20:05 > 0:20:09..compared with normal ice cream, if you take into account...
0:20:09 > 0:20:10Leave out the stevia.
0:20:10 > 0:20:14If you take into account the amount of fructose in here
0:20:14 > 0:20:17because you've got natural fruit extracts of apple and grape,
0:20:17 > 0:20:19how does it compare with the amount of sucrose,
0:20:19 > 0:20:21as in normal sugar, in a normal ice cream?
0:20:21 > 0:20:24So, there's around 6g - obviously it depends on flavour -
0:20:24 > 0:20:26in that, per 100ml.
0:20:26 > 0:20:28In normal ice cream, it's about 21 to 25.
0:20:29 > 0:20:32I know quite a lot about ice cream
0:20:32 > 0:20:35because of my experience in this market.
0:20:35 > 0:20:38Whilst I know that it's an incredibly competitive market,
0:20:38 > 0:20:43this free-from market is a growing area,
0:20:43 > 0:20:45and I think you've got a chance.
0:20:45 > 0:20:48You've created a product that has potential.
0:20:50 > 0:20:52Charlie and Harry's ice cream
0:20:52 > 0:20:55appears to have earned the Dragons' seal of approval.
0:20:56 > 0:20:59Now Sarah Willingham wants to get the flavour
0:20:59 > 0:21:01of the company accounts.
0:21:03 > 0:21:05Talk us through your turnover, then.
0:21:05 > 0:21:07- Where are you at the moment? - Yeah, sure.
0:21:07 > 0:21:12- So, last financial year... - Yeah.- ..we turned over 60k.
0:21:12 > 0:21:15That was with a net loss of 130.
0:21:15 > 0:21:17This year, we'll do 230,
0:21:17 > 0:21:20but we're certainly on target to beat that.
0:21:20 > 0:21:22That's with a net loss of 220.
0:21:22 > 0:21:27The year after, we'll do 550 with a net loss of 160.
0:21:27 > 0:21:30And then, in '17/'18,
0:21:30 > 0:21:33we'll do a million with a net profit of 35.
0:21:35 > 0:21:38Wow. I must be honest, I expected them to be much higher than that
0:21:38 > 0:21:40with what you've come in and asked for.
0:21:40 > 0:21:42- In terms of turnover or profit? - Yeah, much higher.
0:21:42 > 0:21:44It is fairly conservative
0:21:44 > 0:21:47cos we didn't really want to over-promise and under-deliver.
0:21:47 > 0:21:50At the moment, we've got £50,000 worth of stock,
0:21:50 > 0:21:54and that's where the majority of our loss is incurred,
0:21:54 > 0:21:56and we'll therefore get that back later.
0:21:59 > 0:22:04When it comes to these ice creams, 99 isn't the critical number.
0:22:04 > 0:22:07The brothers are operating at a loss,
0:22:07 > 0:22:12news that's unlikely to be greeted with enthusiasm by Touker Suleyman.
0:22:13 > 0:22:15It looks like you are very investible.
0:22:17 > 0:22:22However, 60,000 turnover. You're going to make a loss.
0:22:22 > 0:22:25- So, I'm assuming you've got staff. - Yeah, nine.
0:22:25 > 0:22:27You've got the organisation.
0:22:27 > 0:22:30What concerns me, if I was to invest,
0:22:30 > 0:22:33is the continuation of these losses,
0:22:33 > 0:22:37bearing in mind that you've spent a lot of money
0:22:37 > 0:22:40on developing the business, opening doors.
0:22:40 > 0:22:42And I would have thought by now
0:22:42 > 0:22:45that those losses would have started coming down,
0:22:45 > 0:22:46but they're increasing.
0:22:46 > 0:22:48Yeah, we're planning on them increasing.
0:22:49 > 0:22:51But not with my money.
0:22:53 > 0:22:57I can see some businesses where you have to invest,
0:22:57 > 0:22:59take the losses
0:22:59 > 0:23:02and hope that it'll be worth a lot of money later,
0:23:02 > 0:23:04but I don't see it in this.
0:23:04 > 0:23:06I wish you all the best. I'm out.
0:23:09 > 0:23:15Touker Suleyman joins Deborah Meaden in declining the deal.
0:23:15 > 0:23:18And now, something appears to be troubling the Dragon
0:23:18 > 0:23:21who's built her fortune on her refined palate.
0:23:25 > 0:23:29I tell you what you do get, which is quite interesting now.
0:23:29 > 0:23:34You do get that stevia taste in the back of your throat
0:23:34 > 0:23:38that you get when you use a sugar replacement.
0:23:38 > 0:23:39You know, that...
0:23:40 > 0:23:41You can tell.
0:23:41 > 0:23:46I now know that I have eaten something with stevia in it.
0:23:46 > 0:23:48I haven't had that before. That's interesting.
0:23:48 > 0:23:50We've worked really hard to try and mask that
0:23:50 > 0:23:52through various ways,
0:23:52 > 0:23:55primarily through using as pure stevia as we possibly can,
0:23:55 > 0:23:58and also through actually not using that much.
0:23:58 > 0:24:01I mean, there are a certain number of reviews on Ocado,
0:24:01 > 0:24:04on Facebook, waitrose.com,
0:24:04 > 0:24:08and we're at sort of five-star, saying it's absolutely fantastic.
0:24:08 > 0:24:11You know, I think you've really done well with the upfront taste.
0:24:11 > 0:24:14Really, I almost think there's nothing to change there.
0:24:15 > 0:24:19But that aftertaste, it's a complete deal-breaker for me
0:24:19 > 0:24:24because I think it will impact your repeat purchase going forward.
0:24:25 > 0:24:27And until you nail that,
0:24:27 > 0:24:31I don't think you'll reach the market that you want to reach.
0:24:32 > 0:24:36I wish you all the best with it, but I'm afraid I'm out.
0:24:39 > 0:24:42A major blow for the ice cream entrepreneurs
0:24:42 > 0:24:46as the product's aftertaste kills off any chance of an investment
0:24:46 > 0:24:47from Sarah Willingham.
0:24:49 > 0:24:54Will Nick Jenkins or Peter Jones be any more inclined to invest?
0:24:57 > 0:25:00Harry, Charlie, you've chosen a very difficult sector,
0:25:00 > 0:25:02- the food sector, as you well know. - Mm-hm, yeah.
0:25:02 > 0:25:04It's a difficult sector to get right.
0:25:04 > 0:25:08And although it's possible to create a small, niche brand,
0:25:08 > 0:25:10to go bigger becomes very difficult.
0:25:12 > 0:25:16So, you've probably got a one-in-ten chance of getting there.
0:25:16 > 0:25:18This deal that you have offered today,
0:25:18 > 0:25:22the reward doesn't justify the risk...
0:25:24 > 0:25:26..so I'm afraid I'm out.
0:25:28 > 0:25:33Harry, Charlie, I think you're two incredibly investable guys.
0:25:34 > 0:25:38I think you've done something that's really good,
0:25:38 > 0:25:40and I've eaten quite a lot...
0:25:41 > 0:25:43- ..of all of them. - CHARLIE LAUGHS
0:25:43 > 0:25:46- Wow.- The reason is that I am an absolute ice cream fiend.
0:25:46 > 0:25:48I love ice cream.
0:25:53 > 0:25:57But I do think, sadly, there is a slight aftertaste.
0:25:57 > 0:26:02You should carry on, but I think that you've really got to go back...
0:26:02 > 0:26:05Not back to the beginning, but you've got to really nail this
0:26:05 > 0:26:07cos you're going to live and die by the product.
0:26:08 > 0:26:10And that's the reason why I'm not going to invest
0:26:10 > 0:26:11and say that I'm out.
0:26:11 > 0:26:13- Thanks for your time. - Thank you.- Cheers.
0:26:15 > 0:26:19So, Charlie and Harry must leave the Den with nothing.
0:26:21 > 0:26:25At first, their ice cream met with a warm response,
0:26:25 > 0:26:30but both Sarah Willingham and Peter Jones's taste buds rebelled,
0:26:30 > 0:26:31freezing them out of a deal.
0:26:32 > 0:26:36When Sarah mentioned the aftertaste, I was genuinely surprised.
0:26:36 > 0:26:38It felt like kind of a chain reaction
0:26:38 > 0:26:42from Sarah saying it to suddenly everyone agreeing.
0:26:42 > 0:26:44They're going to have to sort that aftertaste out,
0:26:44 > 0:26:47otherwise, their product's going to be about as popular
0:26:47 > 0:26:49as mudguards on a tortoise.
0:26:49 > 0:26:51We're always looking to improve it. Always.
0:26:51 > 0:26:54But I think we're pretty confident from what everyone's told us so far
0:26:54 > 0:26:56that the aftertaste is incredible.
0:27:06 > 0:27:10Still to come on tonight's show, nerves...
0:27:10 > 0:27:15- QUAVERS:- Thank you for listening, and I'm happy to take any questions.
0:27:15 > 0:27:18- And breathe.- Yes. - THEY LAUGH
0:27:18 > 0:27:21- ..nonchalance... - You're not good with numbers, James.
0:27:22 > 0:27:24..and numbers.
0:27:24 > 0:27:26I don't know how rich everybody else is.
0:27:26 > 0:27:28Me? I think two years' return on my money,
0:27:28 > 0:27:30I think that's not bad going.
0:27:35 > 0:27:40Next into the Den, a supremely self-assured James Talbot.
0:27:42 > 0:27:44I never have game plans. I never have scripts.
0:27:44 > 0:27:46I never rehearse anything.
0:27:46 > 0:27:49I will walk in and deliver my pitch as it comes off.
0:27:49 > 0:27:51It will be ad-libbed.
0:27:51 > 0:27:56So, will this self-styled showman dazzle the Dragons?
0:27:56 > 0:27:58I think confidence - you're born with it.
0:27:58 > 0:28:01For me, I've never been fazed whenever I've been placed
0:28:01 > 0:28:04in front of a big audience or a camera or anything like that.
0:28:04 > 0:28:08I think there's a natural confident showman ability
0:28:08 > 0:28:09that I'm fortunate with.
0:28:22 > 0:28:24Hello, Dragons.
0:28:24 > 0:28:26My name's James Talbot, and I'm here today
0:28:26 > 0:28:30to ask you for an investment of £250,001
0:28:30 > 0:28:34for 12.5% of my company Damson Limited.
0:28:34 > 0:28:38I started the company back in January 2012,
0:28:38 > 0:28:41launching a Bluetooth speaker range,
0:28:41 > 0:28:45and in the first month, we achieved £35,000 worth of sales.
0:28:45 > 0:28:48Moving on from that, we developed Twist.
0:28:48 > 0:28:50You twist it to turn it on,
0:28:50 > 0:28:52and after about ten seconds or so, it will start playing music.
0:28:52 > 0:28:55You'll notice the difference, though. There is no speaker.
0:28:55 > 0:28:58You're not actually hearing very much coming out of this.
0:28:58 > 0:29:00So, when you place it down on the surface,
0:29:00 > 0:29:02it turns the surface into a speaker.
0:29:02 > 0:29:05MUSIC PLAYS
0:29:05 > 0:29:08Take it off the surface and it doesn't really deliver much sound.
0:29:08 > 0:29:11It's great for parties, you're moving around, travelling.
0:29:11 > 0:29:14It's why I developed the concept.
0:29:14 > 0:29:16Moving on from that, I wanted to take this technology,
0:29:16 > 0:29:19which is vibration technology, and develop it into headphones.
0:29:19 > 0:29:22You'll have noticed that I'm wearing a set of headphones on my head.
0:29:22 > 0:29:25However, they're not covering my ears,
0:29:25 > 0:29:27so it means that I can listen to music at the same time
0:29:27 > 0:29:31as carrying out activities such as cycling, running, jogging,
0:29:31 > 0:29:35dog walking, any activity where you'd like to be aware
0:29:35 > 0:29:36of your spatial surroundings,
0:29:36 > 0:29:38but you don't want to cut yourself off,
0:29:38 > 0:29:39and you want to hear the music.
0:29:39 > 0:29:42We released it into the market in February,
0:29:42 > 0:29:45and as a by-product, we're now working with the hearing impaired.
0:29:45 > 0:29:48Because this doesn't use your ears,
0:29:48 > 0:29:50if you do have certain hearing impairment conditions,
0:29:50 > 0:29:53we're finding that it's actually helping people hear sound -
0:29:53 > 0:29:56stereo sound - for the very first time.
0:29:56 > 0:29:59We're looking for the investment today to work with your expertise
0:29:59 > 0:30:02to help take the brand to where we believe it belongs.
0:30:05 > 0:30:09Bone-conducting vibration technology is what York-based entrepreneur
0:30:09 > 0:30:13James Talbot has come to sell to the Dragons.
0:30:13 > 0:30:15Peter, can I change your track?
0:30:15 > 0:30:18- No, I quite like that. - Do you? Nessun Dorma.
0:30:18 > 0:30:22He's looking for a £250,001 investment
0:30:22 > 0:30:25in return for 12.5% of his company.
0:30:27 > 0:30:30So, you get opera, Peter. I get Michael Jackson.
0:30:30 > 0:30:33- Not sure what that says. - You should all get the same thing.
0:30:33 > 0:30:36But is his unscripted, ad-libbed approach to pitching
0:30:36 > 0:30:40also the way he likes to do business?
0:30:40 > 0:30:42Peter Jones is all ears.
0:30:44 > 0:30:47- James.- Yes?- You've pitched a consumer-related product
0:30:47 > 0:30:51which is going into competition with a Beats or a Dr Dre.
0:30:51 > 0:30:53I just don't see this as something
0:30:53 > 0:30:57that is going to have any chance of leading the market.
0:30:57 > 0:31:00I think the issue, though, is it's being very subjective.
0:31:00 > 0:31:03There are many people who can't have earphones that go into their ears,
0:31:03 > 0:31:06there are people that don't like them going over their ears,
0:31:06 > 0:31:09so how do they get to listen to sound the same way that you or I...?
0:31:09 > 0:31:11Then you've really gone to a very tiny part of the market.
0:31:11 > 0:31:13Not if you're looking at sports and athletics
0:31:13 > 0:31:15and the hearing impairment market.
0:31:17 > 0:31:20James, is this pitch about this is going to be used for people
0:31:20 > 0:31:23who are unable to hear music normally,
0:31:23 > 0:31:25or is there another purpose for it?
0:31:25 > 0:31:28First and primary purpose we developed the product for
0:31:28 > 0:31:30was to allow people to safely cycle.
0:31:31 > 0:31:34- And then the other one is the issue of...?- Medical hearing.
0:31:34 > 0:31:37We're actually receiving an awful lot of traction today
0:31:37 > 0:31:39in the press and the public from that.
0:31:39 > 0:31:41We're also working with a Swiss technology company
0:31:41 > 0:31:45that produce pagers for hospitals across Europe.
0:31:45 > 0:31:48We're working with the European air traffic control agency,
0:31:48 > 0:31:50where, again, they have issues.
0:31:52 > 0:31:56James's failure to prioritise a single market for his product
0:31:56 > 0:31:59is causing some confusion in the Den.
0:31:59 > 0:32:05The technology entrepreneur seems determined to keep his options open.
0:32:05 > 0:32:10Could Deborah Meaden be the Dragon to pin him down to one market?
0:32:10 > 0:32:13What do you think is your main market?
0:32:13 > 0:32:17The medical devices, but balanced with sports.
0:32:17 > 0:32:19- The medical devices.- Yeah.- OK.
0:32:19 > 0:32:24- So, you've got this fantastic thing that lots of people have seen.- Yep.
0:32:24 > 0:32:27- So, is that transferring into sales?- Yes.
0:32:27 > 0:32:30The whole company has had revenues of 3 million to date.
0:32:30 > 0:32:34First year was 450,000, second year was 550,000...
0:32:35 > 0:32:37..third year was 1.9 million.
0:32:39 > 0:32:43What's generating the 1.9, and in which market?
0:32:43 > 0:32:45It's the headphones.
0:32:45 > 0:32:48We just did a deal with Sam's Club in the United States -
0:32:48 > 0:32:51part of Walmart - for 1.4 million.
0:32:51 > 0:32:53What's that done to profit?
0:32:53 > 0:32:56Profit in the first year was 120,000.
0:32:56 > 0:32:59It was 155,000 in the second year.
0:32:59 > 0:33:04Third year, we're looking at net profits of 250,000.
0:33:06 > 0:33:07So, you've actually got a business
0:33:07 > 0:33:11that is selling nearly £2 million worth of product?
0:33:11 > 0:33:14That's a really chunky piece of information
0:33:14 > 0:33:18that I would have put right at the beginning of my pitch if I were you.
0:33:19 > 0:33:21So, looking forward,
0:33:21 > 0:33:23what do you think your sales are going to look like?
0:33:23 > 0:33:27Forecast for next year is 1.45 million.
0:33:27 > 0:33:31- And profits?- Profits. Um...650,000.
0:33:31 > 0:33:33And why does your margin increase so?
0:33:33 > 0:33:36Because we're focusing on a higher-margin product.
0:33:39 > 0:33:43The revelation that James is making a 50% profit
0:33:43 > 0:33:45on every product he sells
0:33:45 > 0:33:48has certainly grabbed the Dragons' attention.
0:33:48 > 0:33:50But is it too good to be true?
0:33:50 > 0:33:53Nick Jenkins has his suspicions.
0:33:56 > 0:33:59James, how many businesses in this sector do you know
0:33:59 > 0:34:02that have a net profitability of 50%?
0:34:04 > 0:34:06No, it's the gross profit is 50%.
0:34:07 > 0:34:09Ah! OK.
0:34:10 > 0:34:14So, your pre-tax was 120, then 155, then 250?
0:34:14 > 0:34:17- Sorry, Deborah.- OK.- The lights.
0:34:17 > 0:34:20I want to know what your net profitability is...
0:34:20 > 0:34:22In these years when you're doing 1.5,
0:34:22 > 0:34:25- what's your net profitability? - 650,000.
0:34:25 > 0:34:27- That was the first number that you gave me.- Sorry.
0:34:27 > 0:34:30In the 1 point... That's last year's figure.
0:34:30 > 0:34:321.45. 224,000. Sorry, I...
0:34:32 > 0:34:34- 224 net.- Net. - That's what you're projecting?
0:34:34 > 0:34:36- Yes.- OK.
0:34:36 > 0:34:39- Now at 20% net profitability?- Yes.
0:34:41 > 0:34:44Apologies if I've completely confused you there.
0:34:45 > 0:34:48But you explained it. You explained why your margin was going up,
0:34:48 > 0:34:51and your margin's not going up. That is so blinking frustrating.
0:34:53 > 0:34:58Exasperation in the Den as a mix-up over gross and net profit
0:34:58 > 0:35:01results in James's margins appearing more attractive
0:35:01 > 0:35:03than they actually are.
0:35:04 > 0:35:08The entrepreneur who prides himself on never being fazed
0:35:08 > 0:35:12is now looking distinctly like a rabbit in the headlights.
0:35:12 > 0:35:14And it's not over yet.
0:35:17 > 0:35:20James, at the 1.45 million
0:35:20 > 0:35:22that you're predicting for this coming year,
0:35:22 > 0:35:25what do we actually know about? What orders have we got?
0:35:25 > 0:35:29We've got limited information, to be perfectly honest.
0:35:29 > 0:35:31Jet2 have taken on Headbones,
0:35:31 > 0:35:34and placed an order for 600 pieces in the last couple of weeks.
0:35:34 > 0:35:36Selfridges have taken us on,
0:35:36 > 0:35:38and put us into their new audio products
0:35:38 > 0:35:40ranging in central London.
0:35:40 > 0:35:43We're working with dixons.com, maplin.com,
0:35:43 > 0:35:45Richer Sounds just in the UK.
0:35:45 > 0:35:48- OK. So, basically, so far... - It's headphones.
0:35:48 > 0:35:52- ..you've got an order of 600 headphones.- Yes.
0:35:52 > 0:35:55- And the rest is you're in meetings.- Yes.
0:35:55 > 0:35:58So, am I to assume that there is no Walmart order coming forward?
0:35:58 > 0:36:00We haven't accounted for any Walmart order
0:36:00 > 0:36:02because they're very much like Costco.
0:36:02 > 0:36:05They do these single, individual, one-off deals.
0:36:06 > 0:36:10James, I'm a retailer. I know a little bit about retail.
0:36:10 > 0:36:14- Yes.- You were lucky. You went to America.
0:36:15 > 0:36:16You took one big order.
0:36:16 > 0:36:20Now, if I'm a retailer and I place a big order
0:36:20 > 0:36:24and they sell out, I'll be straight back to you.
0:36:24 > 0:36:28I'd be on the phone saying, "James, how quick can I get a repeat?"
0:36:28 > 0:36:30- Did you get that? - We haven't done yet, no.
0:36:30 > 0:36:32You haven't. So, basically,
0:36:32 > 0:36:34the product probably didn't sell very well...
0:36:35 > 0:36:38..and they probably said, "We're not going back for any more."
0:36:38 > 0:36:41If that was the case, we'd have heard and they would have...
0:36:41 > 0:36:44No, the case was if it was that good, you would have heard.
0:36:44 > 0:36:48Normally, if something's not that good, you won't hear.
0:36:48 > 0:36:51- A little bit unfair, purely... - Don't give me the salesman talk now.
0:36:51 > 0:36:55If the product had sold out,
0:36:55 > 0:36:57would they have come back to you, yes or no?
0:36:57 > 0:36:59- If it had sold out... - Yes or no?- Yes.
0:37:02 > 0:37:04Either they've sold it and copied you...
0:37:05 > 0:37:07..or they haven't sold it.
0:37:08 > 0:37:11And that, to me, gives me a big question mark in my head.
0:37:14 > 0:37:17A less than harmonious exchange,
0:37:17 > 0:37:21as Touker Suleyman casts doubt over James's retail success.
0:37:22 > 0:37:26And now Deborah Meaden wants to take James to task
0:37:26 > 0:37:28on his unscripted pitching style.
0:37:30 > 0:37:33James, when I'm investing in a business,
0:37:33 > 0:37:36I like to think I can get to the bottom of the information.
0:37:36 > 0:37:39And I'm sitting here listening...
0:37:39 > 0:37:41You're a very good salesman,
0:37:41 > 0:37:43but I'd rather hear exactly what's going on
0:37:43 > 0:37:47- than hear somebody come up with a smart answer quickly off...- Yeah.
0:37:47 > 0:37:49..their back like that.
0:37:49 > 0:37:53There has been no consistency.
0:37:53 > 0:37:57I cannot bear it when I feel like I'm wrestling with marshmallow,
0:37:57 > 0:37:59and every time I get that question answered,
0:37:59 > 0:38:01another question pops up over here.
0:38:01 > 0:38:04I've got a really horrible feeling that's how life would be with you.
0:38:04 > 0:38:06I apologise for that.
0:38:06 > 0:38:09I won't be investing in you, James. I'm out.
0:38:12 > 0:38:17Deborah Meaden is the first Dragon to walk away from a deal.
0:38:17 > 0:38:20But she's not the only member of the Den
0:38:20 > 0:38:23questioning if this is a sound investment.
0:38:24 > 0:38:26You came in here and I asked you the question,
0:38:26 > 0:38:29"Is this fundamentally a business about supplying sound
0:38:29 > 0:38:31"to the hearing market?" You said yes.
0:38:31 > 0:38:35And that's a totally new product that you haven't as yet proven.
0:38:35 > 0:38:37And I'm not entirely sure about the sports market.
0:38:37 > 0:38:39I'm alarmed, as a cyclist.
0:38:39 > 0:38:41The idea if I was wearing one of those listening to music
0:38:41 > 0:38:44cycling through London traffic - that would be dangerous.
0:38:44 > 0:38:48I'm not convinced by that market. Neither have you proven that market.
0:38:49 > 0:38:51You haven't demonstrated to me enough
0:38:51 > 0:38:54about the product that you came here to talk about,
0:38:54 > 0:38:57and for that reason, I'm out.
0:38:58 > 0:39:00OK. Thank you.
0:39:01 > 0:39:04James, what worries me about this is that,
0:39:04 > 0:39:08yes, you've got some products that you've sold
0:39:08 > 0:39:12and you're not getting any real repeat business on them,
0:39:12 > 0:39:15so you're looking for new products, new ideas.
0:39:15 > 0:39:17You want to reinvent your business every year.
0:39:17 > 0:39:22You remind me of a salesman that throws a lot of things at a wall
0:39:22 > 0:39:24and you hope that one will stick.
0:39:24 > 0:39:26And you end up, at the year end,
0:39:26 > 0:39:28having a lot of stock which you've got to job out,
0:39:28 > 0:39:31which will affect your bottom line.
0:39:33 > 0:39:35I admire you. You're a great salesman.
0:39:35 > 0:39:38I think you could sell ice lollipops to the Eskimos,
0:39:38 > 0:39:40but you can't sell this to me today.
0:39:40 > 0:39:44For that reason, James, I'm out.
0:39:46 > 0:39:50Bad vibes continue to reverberate around the Den,
0:39:50 > 0:39:52as two more Dragons turn down the deal.
0:39:54 > 0:39:57And James's laissez-faire approach
0:39:57 > 0:40:01seems to have sent Sarah Willingham into a state of confusion.
0:40:03 > 0:40:05I feel like I'm on a carousel.
0:40:05 > 0:40:08I'm, like, up and down on my little horse.
0:40:08 > 0:40:11And one minute, I'm like, "Wow! This is a great business.
0:40:11 > 0:40:14"Where do I sign?" And then the next minute,
0:40:14 > 0:40:16I'm like right sat on the bottom of the horse again.
0:40:17 > 0:40:20You've been stood here for a while now,
0:40:20 > 0:40:23- and I still don't get it. - Have I come across that badly?
0:40:25 > 0:40:27You've come across like you don't know what you're talking about.
0:40:28 > 0:40:32We don't know what business we are trying to invest in.
0:40:32 > 0:40:34Is it cyclists, is it a speaker,
0:40:34 > 0:40:37is it something else you'll come out with next week?
0:40:37 > 0:40:40- We don't know.- A nutshell of what you're investing in today
0:40:40 > 0:40:42is essentially the Headbones product
0:40:42 > 0:40:44of which we believe 65% to 70%
0:40:44 > 0:40:46are going to come from hearing-impaired people.
0:40:46 > 0:40:49But, love, you've only got one order of that -
0:40:49 > 0:40:51of 600 - in the bag.
0:40:55 > 0:40:58SHE GROANS IN FRUSTRATION
0:40:59 > 0:41:02- I've got to say I'm out. - Thank you, Sarah.
0:41:05 > 0:41:08Only Peter Jones now remains.
0:41:09 > 0:41:12Will he be James's unlikely saviour?
0:41:13 > 0:41:17James, I think your business has a future.
0:41:17 > 0:41:19I think your market is the hearing-impaired.
0:41:19 > 0:41:24I do mobile phones for people that are almost blind,
0:41:24 > 0:41:26but partially sighted, and we do well.
0:41:26 > 0:41:28With your current businesses,
0:41:28 > 0:41:31there wouldn't be any sort of ranging opportunities
0:41:31 > 0:41:34within there in a scope that you would see synergies
0:41:34 > 0:41:36that would align themselves to those products?
0:41:39 > 0:41:42You're valuing your company today at £2 million,
0:41:42 > 0:41:46and I think that's where you're a bit disillusioned.
0:41:46 > 0:41:49Your business isn't worth £2 million.
0:41:49 > 0:41:50So, make me an offer.
0:41:54 > 0:41:57How much money have you got in your bank account at the moment?
0:41:57 > 0:42:00- Um...we're overdrawn at the moment. - By how much?
0:42:00 > 0:42:03£70,000 of a 100,000 overdraft.
0:42:05 > 0:42:08You're not good with numbers, James.
0:42:08 > 0:42:10I usually think I'm very good with numbers.
0:42:10 > 0:42:12Just the figures with the lights.
0:42:15 > 0:42:19James, you've overpriced walking in here today.
0:42:20 > 0:42:23You're too early-stage to get a valuation of £2 million.
0:42:24 > 0:42:28Your company today is basically worth around 70k, 80k.
0:42:28 > 0:42:30There lies the issue.
0:42:30 > 0:42:32I can't invest in this. I'm out.
0:42:34 > 0:42:37- Thank you very much, Dragons. - Good luck.- Good luck.
0:42:40 > 0:42:44Mixed messages over margins and confusion over his numbers
0:42:44 > 0:42:47means James makes the slow descent from the Den
0:42:47 > 0:42:50without a multimillionaire backer.
0:42:51 > 0:42:54I don't know why you all kept saying he was a good salesman.
0:42:54 > 0:42:57- Yeah.- He kept screwing us up, didn't he?- He did.
0:42:58 > 0:43:01Ultimately, the Dragons struggled to have as much confidence
0:43:01 > 0:43:05in the entrepreneur as he has in himself.
0:43:05 > 0:43:08I think the confidence is like getting a wind.
0:43:08 > 0:43:09So, can it be knocked out of you?
0:43:09 > 0:43:12Yeah, you can have the wind knocked out of you,
0:43:12 > 0:43:13but it'll come back.
0:43:15 > 0:43:17I fully intend, with my confidence, my abilities,
0:43:17 > 0:43:22my passion, my commitment, to shine through this
0:43:22 > 0:43:23and drive me forward into the future.
0:43:29 > 0:43:31On to our final pitch now,
0:43:31 > 0:43:35to be delivered by mum of three, Cath Harrop.
0:43:35 > 0:43:37Pitching your business idea to the Dragons
0:43:37 > 0:43:40is never likely to be a stress-free experience,
0:43:40 > 0:43:42and Cath has had to think long and hard
0:43:42 > 0:43:45about how she will handle the pressures of the Den.
0:43:50 > 0:43:53Coming on Dragons' Den was a huge decision for me, really,
0:43:53 > 0:43:56because I've always had a huge phobia of public speaking.
0:43:58 > 0:44:02I've been practising at home to my six-month-old daughter.
0:44:02 > 0:44:05She thinks it's great, so, hopefully, that's a good sign.
0:44:09 > 0:44:13To stand in front of the Dragons and do my pitch is a real challenge.
0:44:13 > 0:44:17I'm quite keen to get in there and get on with it now.
0:44:22 > 0:44:24Hi. My name's Cath Harrop,
0:44:24 > 0:44:29and I'm here to ask you for £35,000 of investment
0:44:29 > 0:44:34in return for 20% of the equity in my business, mum2mum market,
0:44:34 > 0:44:36which is a franchised events business
0:44:36 > 0:44:38in the baby and children's sector.
0:44:40 > 0:44:43mum2mum market organises babies and children's nearly-new sales
0:44:43 > 0:44:45where mums sell to mums.
0:44:45 > 0:44:48We run live events all over the country.
0:44:48 > 0:44:51Having a baby is really, really expensive,
0:44:51 > 0:44:55and by buying second-hand, there are huge savings to be made.
0:44:55 > 0:44:58But when I had my own children, I got really frustrated
0:44:58 > 0:45:01with the existing methods of buying and selling.
0:45:01 > 0:45:05The final straw was when I bought a sling on an online auction.
0:45:05 > 0:45:06I paid a fortune for postage,
0:45:06 > 0:45:10and when it arrived, it had a cigarette burn in the strap.
0:45:11 > 0:45:15I could see the need for themed babies and children's events,
0:45:15 > 0:45:18bringing together parents with outgrown stuff to sell
0:45:18 > 0:45:20with those that are looking for a bargain.
0:45:21 > 0:45:24I did my first event in September 2011,
0:45:24 > 0:45:28and it was a huge success and I've rolled out a franchise programme
0:45:28 > 0:45:30across the country since then.
0:45:30 > 0:45:35Now I have 35 franchises all over the country.
0:45:35 > 0:45:38There's a huge demand for this type of business opportunity
0:45:38 > 0:45:40at the moment. I'm selling a franchise a week,
0:45:40 > 0:45:44so, come on, Dragons, mum2mum market is on a real roll.
0:45:44 > 0:45:46I need you to help me reach my next target,
0:45:46 > 0:45:49which is 100 franchises two years from now,
0:45:49 > 0:45:53and beyond that, to see how we can take this concept further.
0:45:53 > 0:45:58- QUAVERS:- Thank you for listening, and I'm happy to take any questions.
0:45:58 > 0:46:00SHE EXHALES DEEPLY
0:46:00 > 0:46:03- And breathe.- Yes. - THEY LAUGH
0:46:04 > 0:46:07The chance to invest in a national sales network
0:46:07 > 0:46:10of nearly-new baby items
0:46:10 > 0:46:13is the deal on offer from Londoner Cath Harrop.
0:46:13 > 0:46:18She's looking for £35,000 in return for 20% equity
0:46:18 > 0:46:20to help build her franchise business.
0:46:22 > 0:46:25Sarah Willingham, who knows this space well,
0:46:25 > 0:46:27is first with the questions.
0:46:27 > 0:46:30- Cath, hi. You probably know I've got four kids.- Yes.
0:46:30 > 0:46:32This age group, actually,
0:46:32 > 0:46:34so I am all over the second-hand market.
0:46:34 > 0:46:38Explain how the franchise model works.
0:46:38 > 0:46:41So, our franchises, we're selling for £1,000.
0:46:41 > 0:46:43- Are you taking an ongoing royalty?- Yes.
0:46:43 > 0:46:47So, all the stalls are sold through my website,
0:46:47 > 0:46:51and I take 30% of the stall booking fee.
0:46:51 > 0:46:53They take everything else.
0:46:53 > 0:46:56Each franchisee is aiming for ten sales a year,
0:46:56 > 0:46:59and they should be making £500 per sale.
0:47:00 > 0:47:04So, how much are you making per franchisee per sale?
0:47:04 > 0:47:09On average, I make £140 per franchisee per sale.
0:47:09 > 0:47:14So, per franchisee signed up is about £1,400 per year
0:47:14 > 0:47:17- and 1,000 upfront?- Yes. Yeah.- OK.
0:47:17 > 0:47:21So, you need to get to some proper scale
0:47:21 > 0:47:24to make any proper money.
0:47:24 > 0:47:28Well, I've sold 15 franchises in the last 13 weeks,
0:47:28 > 0:47:32- and I had a baby at the beginning of that.- Congratulations.
0:47:32 > 0:47:35So, yeah, at the moment, it is growing really, really fast.
0:47:37 > 0:47:41Cath's steely determination to grow the business
0:47:41 > 0:47:44while growing a family is impressive.
0:47:44 > 0:47:46She's proved she's got stamina,
0:47:46 > 0:47:51but does Touka Suleyman think she's got the right business model?
0:47:51 > 0:47:54Cath, can I ask you a question?
0:47:54 > 0:47:56Could you have two businesses?
0:47:56 > 0:48:01One, your franchise business, and two, with the right software,
0:48:01 > 0:48:05do you think that you could create an online eBay
0:48:05 > 0:48:08for second-hand clothing and toys for children?
0:48:08 > 0:48:10Hmm. But the problem is,
0:48:10 > 0:48:12if you take it away from the face to face,
0:48:12 > 0:48:15you get all that hassle back of photographing stuff, listing stuff,
0:48:15 > 0:48:18uploading it onto the website. If you go to sell something,
0:48:18 > 0:48:21you get asked a million silly questions,
0:48:21 > 0:48:23and then you sell something for 99p.
0:48:23 > 0:48:28And the minimum tracked, Signed For postage with Royal Mail
0:48:28 > 0:48:30is £3.90 second class.
0:48:30 > 0:48:33So, your 99p bargain is not such a bargain
0:48:33 > 0:48:36when you've got to pay £3.90 postage on it.
0:48:36 > 0:48:40And this is... It's safe and a public place.
0:48:40 > 0:48:43And it's a leisure activity. Shopping's a leisure activity.
0:48:44 > 0:48:47Cath's passionate defence of the face-to-face approach
0:48:47 > 0:48:51of her business appears to be winning the Dragons over.
0:48:51 > 0:48:54But can she convince them that it's a business that can scale
0:48:54 > 0:48:56to something really profitable?
0:49:00 > 0:49:06Your valuation on the business of £175,000 comes from what?
0:49:06 > 0:49:10Assuming I get up to 100 franchises next year,
0:49:10 > 0:49:13that would put me at a turnover of 190,000,
0:49:13 > 0:49:17with a gross profit of 175 and a net profit of 150,000.
0:49:19 > 0:49:23There just seems to be such big demand for franchises that...
0:49:23 > 0:49:25And how many potential franchisees exist?
0:49:25 > 0:49:30I've got 120 territories on my map in my office.
0:49:30 > 0:49:33I haven't divvied up, like, Scotland,
0:49:33 > 0:49:35and I haven't thought about Ireland.
0:49:35 > 0:49:38And that, all of a sudden, starts to look a lot more interesting.
0:49:40 > 0:49:45With untapped territories comes potential growth.
0:49:45 > 0:49:48But Peter Jones is still failing to see the pound signs.
0:49:50 > 0:49:53Even if you grow to your 120 territories,
0:49:53 > 0:49:57your maximum sort of net income is 168k or thereabouts.
0:49:57 > 0:50:00So, you've already built your ceiling
0:50:00 > 0:50:02of what this company can achieve.
0:50:02 > 0:50:05And £170,000 might be a hell of a lot of money
0:50:05 > 0:50:09to a lot of people, but it's not to an investor.
0:50:12 > 0:50:16Peter Jones is clearly taking some convincing on her turnover -
0:50:16 > 0:50:19relatively modest by Dragon standards.
0:50:20 > 0:50:23Will Deborah Meaden be more accommodating?
0:50:26 > 0:50:29What is it that you think you need from a Dragon?
0:50:29 > 0:50:32I would really value someone who I could put my head together with
0:50:32 > 0:50:34and think strategically.
0:50:34 > 0:50:36I would really like to grow this business.
0:50:36 > 0:50:38I'd love to have mum2mum market in every town,
0:50:38 > 0:50:42and be one of the first places that people think of shopping
0:50:42 > 0:50:43when they have a baby.
0:50:43 > 0:50:46But Peter's point about the ceiling is absolutely right.
0:50:46 > 0:50:49No entrepreneur likes to think, "That's it. Job done."
0:50:49 > 0:50:52You kind of want to feel like there's opportunity out there.
0:50:52 > 0:50:55Yeah, and I think I'll probably end up being a serial entrepreneur.
0:50:55 > 0:50:58I've always gone on about how many good ideas I've got,
0:50:58 > 0:51:00and this is my baby.
0:51:00 > 0:51:04And I don't see myself selling it, but maybe put a manager in.
0:51:04 > 0:51:06I've got lots of good people in the business already
0:51:06 > 0:51:09who know the business inside out - my franchisees.
0:51:12 > 0:51:14Concerns that the business has a ceiling
0:51:14 > 0:51:16that Cath will struggle to break through
0:51:16 > 0:51:20are deftly handled by the increasingly confident entrepreneur.
0:51:22 > 0:51:26Now Nick Jenkins has come to a decision.
0:51:26 > 0:51:29Cath, in all businesses,
0:51:29 > 0:51:32you have to ask what you want to get out of it.
0:51:32 > 0:51:35Are you in this because you want to sell it after three years and exit,
0:51:35 > 0:51:37or are you in this because you'd like to have a good living
0:51:37 > 0:51:40and, actually, you enjoy doing what you're doing?
0:51:40 > 0:51:43Now, you clearly enjoy speaking to your franchisees.
0:51:43 > 0:51:46This is not a business, I don't think, that you're going to sell.
0:51:46 > 0:51:48Why would you? You know, it's great.
0:51:48 > 0:51:50I just don't think there's enough scale in it
0:51:50 > 0:51:52to justify any of us coming in
0:51:52 > 0:51:56and spending quite a lot of time in it because...ultimately,
0:51:56 > 0:51:58um, we're probably not going to get a reward.
0:52:00 > 0:52:03So, I'm afraid, for that reason, I can't invest. I'm out.
0:52:06 > 0:52:07One Dragon down.
0:52:09 > 0:52:12With a background in money-saving tips for mums,
0:52:12 > 0:52:16could Sarah Willingham be Cath's perfect business partner?
0:52:17 > 0:52:19Cath, I'm really...
0:52:19 > 0:52:22I'm really trying, actually. I really am.
0:52:22 > 0:52:26It's a space I know very well from a business perspective
0:52:26 > 0:52:28and also as a consumer, as a mum.
0:52:28 > 0:52:33You know, I e-mail a couple of hundred thousand mums every week...
0:52:34 > 0:52:36..telling them about stuff like this.
0:52:36 > 0:52:39It's an area that I'm extremely passionate about,
0:52:39 > 0:52:41and I am extremely torn.
0:52:46 > 0:52:49SHE SIGHS
0:52:49 > 0:52:51SHE EXHALES DEEPLY
0:52:51 > 0:52:54I think, on my figures, you pretty much get your money back
0:52:54 > 0:52:57- after two years, at 20%...- Yeah.
0:52:57 > 0:53:00..and then the size of the business would be that much bigger,
0:53:00 > 0:53:01then ongoing.
0:53:02 > 0:53:05SHE EXHALES
0:53:08 > 0:53:10Plenty to ponder for Sarah Willingham.
0:53:12 > 0:53:16But elsewhere in the Den, it's far more clear-cut.
0:53:16 > 0:53:19Cath, can I tell you, I think it's great what you're doing.
0:53:19 > 0:53:20This is brilliant.
0:53:20 > 0:53:22But in terms of a major investment
0:53:22 > 0:53:26and scaling this up into something where we can become,
0:53:26 > 0:53:30- you know, very wealthy together... - Yes.- ..it's not an opportunity
0:53:30 > 0:53:32because you've made it very clear
0:53:32 > 0:53:33where the ceiling is of the business.
0:53:35 > 0:53:38So, that's why I'm not going to invest, and say that I'm out.
0:53:38 > 0:53:39Thank you.
0:53:41 > 0:53:43Cath. Touker.
0:53:43 > 0:53:45Yeah.
0:53:45 > 0:53:49- My advice to you is think out of the box.- Yeah.
0:53:49 > 0:53:53Something online eventually could be worth a lot of money.
0:53:53 > 0:53:57But in your present format, I think it's too small for me.
0:53:58 > 0:54:00Unfortunately, I'm out.
0:54:01 > 0:54:02OK. Thank you.
0:54:04 > 0:54:06Two more Dragons out,
0:54:06 > 0:54:10both citing the current size of the business opportunity
0:54:10 > 0:54:13as the one reason for not investing.
0:54:13 > 0:54:16Sarah Willingham's been on the fence with this one,
0:54:16 > 0:54:20and she's finally ready to show her hand.
0:54:20 > 0:54:22You know what? I...
0:54:24 > 0:54:27I love what you're doing. I really do.
0:54:27 > 0:54:29And I am extremely torn.
0:54:33 > 0:54:38But I am looking for things that would create a bigger value
0:54:38 > 0:54:41with a, you know, potential sale and, um...
0:54:43 > 0:54:45And I'm sure this is one that I will regret.
0:54:47 > 0:54:51But it's not for me, so I'm afraid I am out.
0:54:53 > 0:54:56Not the result the entrepreneur was hoping for,
0:54:56 > 0:55:00as Sarah Willingham, the Dragon with existing business interests
0:55:00 > 0:55:03in the money-saving sector, declines the deal.
0:55:04 > 0:55:07Only Deborah Meaden remains.
0:55:07 > 0:55:11Is she about to deliver the final blow?
0:55:11 > 0:55:13Well, I'm going to let you know where I am.
0:55:13 > 0:55:16This is quite small.
0:55:18 > 0:55:21But I like your instincts. I think you're absolutely right.
0:55:21 > 0:55:25Very soon, people are going to struggle to find the place
0:55:25 > 0:55:28where they actually come face to face with other people.
0:55:28 > 0:55:31This becomes as much of a social event as it does anything else.
0:55:31 > 0:55:34- People start to look forward to it and enjoy it and meet people.- Yeah.
0:55:34 > 0:55:39So, yes, I hear what everybody says about it's a small market.
0:55:39 > 0:55:41We can take a ceiling off.
0:55:41 > 0:55:44- That's what an entrepreneur does. Not, "I've got a ceiling."- Yeah.
0:55:44 > 0:55:46It's actually, "There must be other opportunity."
0:55:46 > 0:55:49I don't know how rich everybody else is.
0:55:49 > 0:55:54Me? I think two years' return on my money, that's not bad going.
0:55:54 > 0:55:55I'm going to believe you
0:55:55 > 0:55:57when you say that you're a serial entrepreneur.
0:55:58 > 0:56:01So...I'm going to make you an offer.
0:56:05 > 0:56:08Your offer to me - 20% of the business for 35,000 -
0:56:08 > 0:56:12I'm going to up that slightly,
0:56:12 > 0:56:14um...to get the return on investment.
0:56:14 > 0:56:16So, I'm going to make you an offer for 35,000.
0:56:16 > 0:56:19I want 25% of the business. We're not far away.
0:56:25 > 0:56:27Would you meet me in the middle at all?
0:56:28 > 0:56:29No.
0:56:39 > 0:56:42OK. I'd love to accept your offer, Deborah. Thank you very much.
0:56:42 > 0:56:46- CHEERING AND APPLAUSE - Very pleased to hear it. Fantastic.
0:56:48 > 0:56:50- I haven't even got children. - CATH LAUGHS
0:56:50 > 0:56:53I'm not going to get this at all, but I get the... It's fantastic.
0:56:53 > 0:56:56Finally, and against all the odds, a deal in the Den...
0:56:56 > 0:56:58- That's really good. - Cath, well done.- Well done, you.
0:56:58 > 0:57:01..as Cath Harrop overcomes her initial nerves
0:57:01 > 0:57:03to deliver a winning pitch.
0:57:06 > 0:57:09That was absolutely brilliant. I'm absolutely thrilled.
0:57:09 > 0:57:11I know that some of the Dragons thought
0:57:11 > 0:57:14there might be a ceiling on my market,
0:57:14 > 0:57:15but I think, with Deborah on board,
0:57:15 > 0:57:19that her and I can bust through any ceiling
0:57:19 > 0:57:20and prove them all wrong.
0:57:26 > 0:57:29So, it's been a tale of two entrepreneurs -
0:57:29 > 0:57:33one oozing with confidence, the other consumed with fear.
0:57:33 > 0:57:37But as Cath has just proved, if you have a great business,
0:57:37 > 0:57:40it will triumph over a few nerves.
0:57:40 > 0:57:43And that brings proceedings to a close for this series.
0:57:43 > 0:57:45And what a series it's been.
0:57:45 > 0:57:47We've had more investments than ever before,
0:57:47 > 0:57:51and to have seen the innovative, the ingenious and the implausible.
0:58:00 > 0:58:01Warming up.
0:58:01 > 0:58:03- THEY LAUGH - It's absurd.
0:58:03 > 0:58:07You look like Harry Hill trying to get fit in the living room.
0:58:07 > 0:58:09The Dragons will be fine.
0:58:09 > 0:58:10I-I-I'm flabbergasted.
0:58:10 > 0:58:12- I couldn't work with you. - HE SCOFFS
0:58:12 > 0:58:14This makes me really cross.
0:58:14 > 0:58:17- What, have you found gold?- Yes!
0:58:17 > 0:58:20- I'm going to make you an offer. - I will make this happen.
0:58:20 > 0:58:21All of the money.
0:58:21 > 0:58:25- Thank you very much. Well done. - Cheers, mate.- Oh, really pleased!
0:58:25 > 0:58:26- Thanks so much.- Cheers.
0:58:26 > 0:58:28- It was so surreal.- Yay!
0:58:30 > 0:58:32- Touker time. Isn't that amazing? - Touker time.
0:58:32 > 0:58:35Marvellous. Brilliant.
0:58:35 > 0:58:36Can you wrap it up?