Episode 12 Dragons' Den


Episode 12

Budding entrepreneurs pitch business ideas to multimillionaires. An American entrepreneur is hoping for investment in her range of dolls with historical tales to tell.


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Transcript


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I've got to say, what Peter's just said is actually genius.

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No, no, I'm not hearing that,

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and I'm not going to let you get away with that.

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Sorry, hang on, you've spent £400,000 on dolls?

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Mm.

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I'm glad it's your strategy, but I'm out.

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You're valuing a business that so far has made £1,000 profit

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-at a million?

-Yeah. If I'm able to answer...

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I'd love to find out what you're going to say.

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I think you've got a cracking business.

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I'm going to make you an offer.

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Let's go back to the evidence. Give me the evidence.

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Welcome to Dragons' Den,

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where a fresh batch of nervous entrepreneurs

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are putting the finishing touches to what they hope

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will be the elevator pitch of a lifetime.

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For our first entrepreneurs,

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deciding what to wear for the toughest pitch of their life

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was easy.

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They took inspiration from their product.

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With the costumes that we're wearing,

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hopefully we'll get a very positive and quite a standout reaction

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from the Dragons. We're looking for them to smile.

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Hi, Dragons.

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-I'm Joe.

-And I'm Andy.

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And we're the co-founders of Just Bee drinks.

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Today, we're looking for an investment of £65,000

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in return for 10% equity.

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Just Bee is a light and refreshing flavoured spring water drink,

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but the difference is instead of adding refined sugar

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or artificial sweeteners,

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we use a single drop of honey.

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Each drink is completely natural,

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very low in sugar, and less than 50 calories.

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But why honey? Well, my dad's a beekeeper.

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And my grandad was, too.

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I grew up having my dad's honey in cups of tea,

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instead of sugar.

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A few years ago, I mentioned this to my friend, Andy, and we wondered,

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why do you never see soft drinks with honey?

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This was the start of our big idea for a healthy drink using honey.

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Well, we had a fantastic first three months,

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gaining listings in premium retailers Selfridges

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and Fortnum and Mason.

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We're now stocked in over 100 outlets across the UK and Ireland,

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from delis and coffee shops to hospitals and office canteens.

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We've recently started discussions with the national retailers.

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We feel this is the next exciting step for Just Bee.

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Thank you. Now, we have some drinks for you to try.

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Andy Sugden and Joe Harper are on a mission

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to refresh the soft drinks market.

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Thank you.

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They think £65,000 should do it,

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and a 10% sweetener is on offer in return.

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Peter Jones wants to share his thoughts

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on the entrepreneurs' attire.

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I won't go through the sort of days you have in the Den.

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And when those doors opened,

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and I saw you two coming out dressed like that,

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I really thought we'd got a couple of Charlies coming in,

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and I was terrified.

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LAUGHTER

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My first reaction is why hasn't this happened before?

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We were asking the same question. Why?

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You haven't found the answer?

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-No.

-The success you've had so far,

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-could you quantify that now in terms of sales?

-Yeah.

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So, sales for the first 12 months was £50,000,

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and an operating loss of £38,000.

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What capital did you put into the business each at the start?

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So, in total so far, we've put £33,000 each in.

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-OK.

-And we have also received some additional investment

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from a high-net-worth individual already.

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And what's his name?

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He's called Simon Leonard.

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And how much did he invest?

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So, he put in £150,000.

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-OK.

-He got 23% for that.

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OK, so, right in thinking that your net assets

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are currently sitting around 170K?

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No.

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-So, the current balance sheet is about 45,000 of stock.

-OK.

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About 19,000 of debtors.

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About £94,000 of cash.

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And £36,000 of creditors.

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What does that make your net position, then?

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121,000.

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I can't tell you how many people can't do that.

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We've spent 20 minutes trying to get that out of some people.

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Very impressive.

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Peter Jones doesn't hand out plaudits very often,

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but the entrepreneurs' firm grasp of their business' books

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has clearly made a good impression.

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Now, Deborah Meaden wants to find out whether these golden boys

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also have green credentials.

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-What I want to talk about is sustainability.

-Mm-hm.

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Cos the story's lovely.

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The fact that your father, your grandfather, were beekeepers.

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But actually, one of the problems that have caused colony collapse

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is intense farming of bees.

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-OK.

-So, to just drive a load of products fuelled by honey

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is a little bit counterintuitive.

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Yeah, some beekeepers take all of the honey away from the hive

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-and then fill it full of sugar syrup.

-Yeah.

-Yeah.

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We've made sure that all of our beekeepers in all of our supply,

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they're completely ethical and they leave enough honey

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for the bees to survive winter.

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-OK. That was my question.

-That was really important for us, yeah.

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Yeah. Because if you're telling a lovely story about bees,

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that needs to go all the way back to the hive.

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-You know, we're looking after these as well.

-Absolutely.

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But you're not going to like what I'm going to say.

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But this is only me, personally.

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I don't actually like the taste.

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Honey has a very slightly antiseptic taste, doesn't it?

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I personally don't know, but...

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It's probably just me. You liked it? You liked it? Can I just ask?

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-I loved it.

-Did you like it?

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-NICK AND PETER:

-I do know what you mean about the taste.

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-NICK:

-That's why I don't put honey in tea.

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-Yeah.

-Because it adds a flavour, sugar doesn't.

-Yeah.

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-ANDY:

-It's the first time I think we've heard that feedback.

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Although you've heard it from three people here.

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Now I mention it, yeah.

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A slight sting in the tail from Deborah Meaden,

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who declares the taste of honey not to her liking.

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But the Dragon with a portfolio swarming with drinks investments

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couldn't agree less.

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I just want to start with saying I love the product.

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-I really do.

-Thank you.

-I think it's got a great flavour.

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But...I don't think it's a very mass-market flavour.

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And the squash market is not going to be substituted with that.

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The water market will go, "Oh, this is a nice treat"...

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but will still want to hydrate themselves with water.

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But just because it's niche,

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it doesn't mean that this is not possible.

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It just takes a lot of power, and a lot of marketing.

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What is your price point?

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What would I buy that for?

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Our RRP is £1.69.

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That's quite a luxury, isn't it?

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That... That... I'm trying to see where it would go.

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Can you walk out of here, make a phone call to Tesco,

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where would they put it?

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So, in the first year,

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we've placed ourselves in a sort of a premium category

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of the flavoured water.

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But once we get to volume and we're in the likes of Waitrose,

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or Sainsbury's, or Tesco,

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we'd looking at the price point reducing to £1.49.

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Cos I can see it in the Pret, the Costas.

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I'm struggling with it as a supermarket product because it is...

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It's very premium.

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To put ten of those into your supermarket trolley,

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I think that's quite... It is quite a big ask.

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When the queen bee of the beverage market

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doubts your drink's ability to reach a mass market, it's not good.

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But Peter Jones thinks he may have hit upon a solution.

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I can see this getting you into the smaller players,

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like the delicatessens, the specialists.

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Exactly where you are, but then your mass-market product...

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If you see what Robinsons have brought out

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with their small little squeezy concentrate.

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I don't understand why you didn't think about bringing out

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the very ingredient that actually goes into water in the first place

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in a bee-like squeezy.

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So that actually that's the product

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that goes mass-market and supermarkets.

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Radiates your brand.

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It's a lot more cost-effective to the consumer to buy that,

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and it comes in a bee little pack,

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you squeeze it into your glass of water, kids have it at home.

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-Yeah, yeah.

-It's brilliant.

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I've got to say, what Peter's just said is...

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And I hate to say this because he's going to

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go on about it for ever now,

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but I am going to say it. ..is actually genius.

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Because that's your squash market.

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-Mm.

-If you can produce the concentrate, effectively,

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as a squash, that's your mass-market product.

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Can I just ask about the stability of honey?

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Because of course there's a crystallising issue with honey.

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-That is a fantastic idea...

-It might work.

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I think there might be a technical issue

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why you can't make cordial with honey.

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Ah, but no, it doesn't. Sorry.

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Once it's dissolved,

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it doesn't.

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Are we still debating Peter's idea?

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-I know, sorry.

-Because if we are, Peter needs to stand up there.

-I just think it's such a genius idea.

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-Anyway, guys, while they talk about my idea...

-Come out with something to replace squash.

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..and discuss amongst themselves,

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I'm going to make you an offer for all of the money

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for 25% of the company.

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-NICK:

-Wow.

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OK. Would you like to respond to that now?

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Well, look, I would prefer that you didn't try and negotiate.

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And then at the end of all of this we can...share the honey.

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Bee-hive yourself.

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Like it.

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An offer from Peter Jones,

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whose ability to catapult a brand to the big-time is no secret.

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Will the cordial atmosphere continue with a bid from Deborah Meaden?

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First thing I will say, I think you've done a great job.

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I love the branding, I love the authenticity.

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You could have won me over on any day of the week,

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but unfortunately, I don't like the taste.

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And for me to be really engaged with something,

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I've got to be able to sit here and say, "But it's lovely!"

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And I would be very clear about that. That's personal.

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I know people will like this taste.

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So, that's the only reason.

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But I won't be investing, I'm out.

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-Thank you.

-Thank you.

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I love the story, and a big fan of bees.

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Slightly concerned that the honey flavour

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might make it fairly niche...

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In that there are people who'll love it,

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but there'll be a lot of people who won't.

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So, for that reason, I can't get over the line.

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So, I'm out.

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Thanks.

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Guys, I like what you've done.

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Great. I like you guys, too.

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However, I think in this sector,

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which is not really my sector,

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you've got a perfect offer from the perfect Dragon.

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So, I'm not even going to play numbers with anybody on this.

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I'm not the right Dragon for you guys.

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So, for that reason, I'm out.

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Touker Suleyman steps aside graciously,

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joining Nick Jenkins and Deborah Meaden in going out.

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But Peter Jones doesn't yet have the deal in the bag.

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Could drinks tycoon Sarah Willingham just be in the mood

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to mix things up a bit?

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I really like the product.

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I've said that. I love the flavour.

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I do think, in its current form,

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it's going to be a real struggle in mass-market.

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And I've spoken to the buyers of the major retailers,

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the big supermarkets,

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and this is an area that they see is very saturated.

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There's a lot of people in there already,

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fighting for the space.

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And I do think it's going to be a hard sell.

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So, I'm sorry, I'm out.

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So, that's Sarah Willingham out of the picture,

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leaving just that one offer from Peter Jones.

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Now, it's all down to the negotiation.

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We hoped someone was going to make this competitive.

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HE CHUCKLES

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25% is...

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..a long way away from where we were at ten.

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We really do believe that this could be huge.

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Is there anything we can do?

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I don't think so,

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because I do think it's one of these situations where...

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..it might not go anywhere.

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You know, I'm not going to say you don't have a brand yet

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because you do, you've done really well.

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But I think that I add enough to justify why I would want 25%.

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Tangibly, what would you bring?

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I think that the relationships that I've got with the supermarkets,

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people like Mike Coupe, who runs Sainsbury's,

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or Andy Clarke, who looks after Asda, or...

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And I can go on.

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And these are direct relationships.

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And 25% makes it interesting for me.

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-Shall we have a chat?

-Yeah, think so.

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-WHISPERING:

-25% is a long way from ten.

-Yeah.

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We'd be down, moving down to...28.

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And a counter offer.

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Or just straight in with a counter offer.

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-You do it.

-OK.

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Before we make you a counteroffer,

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we'd like to tell you a few more things.

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So, there's a huge export opportunity,

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and we're getting e-mails left,

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right and centre. We're actually in the listing process with Waitrose

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at the moment, and Boots and Whole Foods.

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We believe there's a real value in this company.

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Based on what we've just said, we'll counter offer - 15%.

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Guys, I'm... The answer's no.

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I wouldn't go down to 15%.

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If we dropped down to 15, we're at a third each.

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But that would mean I'd have 25, you'd both have 28 each.

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And our other investor would have the rest.

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So, you'd be the majority shareholders,

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you'd still have complete control.

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You'd own over 50% of the company.

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Just saying.

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Have one more chat.

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-WHISPERS:

-I think one of them...

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One of them wants to do it, the other one doesn't.

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Anything clever we can do?

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We'd love to work with you, but we can't go above 15%.

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-Guys, look, you've made your decision.

-It's the wrong decision.

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But on the basis of the fact that I'm not willing

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to change my offer, I'm going to have to say that I'm out.

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Thank you.

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A pitch buzzing with excitement,

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but resulting in a frustrating finale for the entrepreneurs.

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Peter Jones may have thought the product was the bees' knees,

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but not enough to drop his equity demand.

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-It's the right thing to do.

-Yeah.

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Do you know what? I still genuinely wish them the best of luck.

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-Oh, yeah.

-I hope they make it.

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Although I hope they don't pinch my idea.

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It feels slightly crazy to have turned down Peter Jones.

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It was tempting at the time, but I think we probably would have

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woken up tomorrow and could have regretted it.

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Next into the den is Francis Kane.

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An entrepreneur on a mission

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to change the face of the doll business.

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The fact that the product clearly looks as good as it does.

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And I think the ethos behind it, which is different to a lot of

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the other brands on the market at the moment.

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I'm hoping that that will come across.

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But it may be a bit of a rocky road,

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but we'll have to see when I get in there.

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She's already taken her idea from the playroom to the boardroom,

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but will the Dragons toy with investing in her range of products?

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Hello. My name is Francis Kane, and I am a owner of A Girl For All Time,

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which is a range of toys designed to celebrate and empower girls through

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creative, imaginative play.

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I'm in the Den today looking for £70,000

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for a 10% investment

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of my four-year-old growing business.

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I founded A Girl For All Time really because of my own frustration at

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trying to find anything that was well-designed and intelligently done

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for my own daughter when she was much younger.

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Her choices seemed to be limited to

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plastic lipstick and pretend ironing boards.

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So, I created a range of dolls that followed the adventures

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of the first-born girls of the fictional Marchmont family

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through 500 years of time.

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Stories that come with the range show the girls as heroes

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of their own stories.

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Currently, we have five dolls here that you see,

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and they have won a cachet of industry awards

0:19:200:19:24

for top quality and design,

0:19:240:19:27

including Play Doll Of The Year two years in a row.

0:19:270:19:30

2015 for us saw sales of just under £90,000.

0:19:300:19:35

2016 looks to be a strong year with 125% growth

0:19:350:19:41

in the first four months of 2016.

0:19:410:19:45

I do believe that our girls are so much more than pink and plastic

0:19:450:19:49

lipstick and pretend ironing boards,

0:19:490:19:51

and I think their toys should be as well.

0:19:510:19:53

And I would like to show you some product, if I may.

0:19:530:19:56

Frances Cain,

0:19:590:20:01

originally from the American Midwest and now living in London,

0:20:010:20:04

is looking for a boardroom buddy.

0:20:040:20:06

You have the start of the family tree, Matilda.

0:20:060:20:08

In exchange for 10% of her company,

0:20:090:20:12

she'd like a Dragon to invest £70,000 on it.

0:20:120:20:15

Peter Jones has a confession to make.

0:20:170:20:19

I'm quite an expert in dolls.

0:20:210:20:23

Oh, right.

0:20:230:20:25

Because over the last sort of 20 years,

0:20:250:20:27

I've grown up playing with dolls a lot because my youngest daughter,

0:20:270:20:31

-who's now nine, and my oldest daughter, who's 23.

-Hm.

0:20:310:20:34

So, I have to say, there's something a bit eerie about the dolls.

0:20:360:20:40

OK.

0:20:410:20:42

I don't know. It looks a little bit sort of...

0:20:420:20:44

Not as friendly as I would have expected.

0:20:440:20:47

-Well, erm...

-And I'm struggling.

0:20:470:20:49

Immediately struggling with the sort of...the look.

0:20:490:20:52

Because I look into this doll's eyes,

0:20:520:20:54

and there's sort of like a darkness there.

0:20:540:20:56

-Well, maybe slightly pensive. Maybe at times.

-Pensive's a good...

0:20:560:20:59

-Right word.

-Or maybe thoughtful.

0:20:590:21:01

Or...

0:21:010:21:02

Yeah.

0:21:020:21:04

And is that very much about you, Frances?

0:21:040:21:07

Are you coming out in this doll?

0:21:070:21:10

Well, I think what frustrated me when I was looking for something

0:21:100:21:14

for my own daughter when she was growing up

0:21:140:21:16

is I just felt things were either

0:21:160:21:18

divided into kind of the very pink, bubbly, plastic thing

0:21:180:21:23

or being shoved too far, I felt, into the adult world.

0:21:230:21:27

These dolls are supposed to represent nine, ten, 11-year-olds.

0:21:270:21:32

And we're not always constantly smiling, I feel, are we?

0:21:320:21:35

I think having a companion who looks as we usually look

0:21:350:21:40

is a positive thing.

0:21:400:21:42

A product which makes Peter Jones feel uneasy.

0:21:440:21:48

It's not a great start to Frances' pitch.

0:21:480:21:51

But onto the business itself, and Touker Suleyman wants to know

0:21:510:21:54

if there's anything that makes

0:21:540:21:56

this product stand out in a crowded market.

0:21:560:21:59

What is your USP that could make this doll

0:21:590:22:03

-into a multi-million dollar business?

-Excellent point.

0:22:030:22:08

What we've created is a whole brand behind the characters of the dolls.

0:22:080:22:12

So, as far as I know,

0:22:120:22:13

we're the only brand on the market that does an entire family series

0:22:130:22:18

that does these kind of stories with the dolls and creates a depth of

0:22:180:22:23

experience with each range.

0:22:230:22:27

Is it a nice story, or do any bad things happen in that family?

0:22:270:22:29

Well, you know,

0:22:290:22:31

family narrative is really about knowing the good things and the bad

0:22:310:22:34

-things.

-So, who's killed who in the family?

0:22:340:22:37

Nobody... Nobody's killed, but don't forget,

0:22:370:22:39

Matilda is a Tudor girl,

0:22:390:22:41

-and Tudor was not always happy times.

-Tell me about her.

0:22:410:22:43

What's the unhappy times?

0:22:430:22:44

Matilda is 13 years old,

0:22:440:22:47

and she is sent as a spy to the court of Henry VIII

0:22:470:22:50

and to help advance her cousin Catherine Howard's

0:22:500:22:53

chances to be Queen.

0:22:530:22:55

And Matilda keeps a secret diary.

0:22:550:22:57

Hence the title of her book, Matilda's Secret.

0:22:570:23:00

And it's about her time at court,

0:23:000:23:02

which did not go very well for Catherine Howard,

0:23:020:23:04

if you know your history.

0:23:040:23:06

Frances proves there's more to her dolls than your average kid's

0:23:070:23:11

playthings, with talk of their unique back stories.

0:23:110:23:15

But is millionaire mum of four Sarah Willingham

0:23:150:23:18

buying the product or the business?

0:23:180:23:20

I wouldn't buy one, and I am absolutely your target market,

0:23:220:23:27

if you want to sell the story of trying to empower your little girls

0:23:270:23:31

to believe that they can do anything and be anything.

0:23:310:23:33

I don't think that's what you're achieving through these dolls,

0:23:330:23:37

I really don't.

0:23:370:23:38

I think your objective, you're saying,

0:23:390:23:42

is to make it very real through history.

0:23:420:23:45

I'm not convinced that that's the way to empower

0:23:450:23:49

young girls of today.

0:23:490:23:50

Of course they need to learn history,

0:23:500:23:52

but I think the dolls look like they've sacrificed a lot.

0:23:520:23:56

They... They... They are girls who have suffered a lot.

0:23:560:23:59

So, because I am your target market and I wouldn't buy one,

0:23:590:24:03

I wish you all the best, but I'm afraid I'm not going to invest.

0:24:030:24:06

So, I'm out.

0:24:060:24:07

Sarah Willingham just can't gel with Frances' dolls

0:24:090:24:12

and decides to pass on the business opportunity.

0:24:120:24:16

Can Peter Jones redeem things with talk of cold, hard cash?

0:24:160:24:22

How much money have you spent so far developing the business?

0:24:220:24:25

So, over the last five years, having launched in 2012,

0:24:250:24:30

a grand total of about...

0:24:300:24:31

And it's rounding here, £400,000.

0:24:310:24:34

-Oh, wow.

-Cor!

-Wow.

0:24:340:24:37

If I could preface that, with the larger companies...

0:24:370:24:40

-Sorry, hang on, Frances.

-Yep.

-You've spent £400,000 on dolls?

0:24:400:24:44

It's been a... It's been an investment a little bit every year.

0:24:460:24:49

Where did you get that money from?

0:24:490:24:51

Part of it has been from my own funds,

0:24:510:24:54

part of it was from friends and family.

0:24:540:24:56

Francis has gone to great lengths to bankroll a brand she believes is on

0:24:590:25:03

the brink of success.

0:25:030:25:06

But does Deborah Meaden share her conviction?

0:25:060:25:09

To me, they're not joyous.

0:25:100:25:12

-Did you ever play with dolls, Deborah?

-Never played with dolls.

0:25:120:25:15

-I'm not surprised.

-I was a...

-SHE LAUGHS

0:25:150:25:18

Spiders, snakes, all of those things.

0:25:180:25:21

Never dolls. This is personal.

0:25:210:25:24

So, please brace yourself.

0:25:240:25:27

I just don't like it.

0:25:270:25:29

You know, they don't make me feel good.

0:25:290:25:31

They don't tell a great story to me.

0:25:310:25:33

So, I'm really sorry, Frances, I'm out.

0:25:330:25:36

I appreciate the comments, thank you.

0:25:360:25:38

-What's this one called?

-Lydia.

-Lydia, right.

0:25:430:25:46

Lydia, I bought you a doll.

0:25:460:25:48

One of those over there. Are you excited about that?

0:25:480:25:51

No, not really. Quite indifferent, really.

0:25:510:25:53

Looks a bit sort of Botoxy.

0:25:530:25:55

I'm sure you've done loads and loads of research.

0:25:550:25:58

It's not a market I know anything about.

0:25:580:25:59

I'm sure you've done absolutely stacks of it and you've gone to

0:25:590:26:02

something which is quite different. But I just can't get it at all.

0:26:020:26:09

-I'm afraid I'm out.

-Right, OK. Thank you very much.

0:26:090:26:12

The Dragon who made a fortune in personalised gifts

0:26:130:26:16

shows no interest in these bespoke dolls.

0:26:160:26:20

And Touker Suleyman has also come to a decision.

0:26:200:26:24

You've gone a long way to build a business

0:26:250:26:30

that has no appeal, in my view.

0:26:300:26:33

I mean, in my own personal view.

0:26:330:26:34

And I think you're probably a very professional person.

0:26:340:26:37

You've built this whole business around the idea of this doll.

0:26:370:26:41

You spent £400,000, but I don't see it going where you want to see it.

0:26:410:26:46

I'll be happy one day if you get your money back.

0:26:460:26:49

But it's not going to be with my money, I'm afraid.

0:26:490:26:53

And for that reason, I'm out.

0:26:530:26:55

I genuinely like the fact that you've come up

0:26:590:27:02

with a storyline behind what you're trying to achieve.

0:27:020:27:05

But I personally think you've made some real fatal errors.

0:27:050:27:09

-There's a few things that scare me about this doll.

-Mm-hm.

0:27:100:27:13

When you go to bed at night and you put your doll down

0:27:130:27:16

and you say goodnight and you sleep,

0:27:160:27:18

if you open your eyes halfway through the night and your doll's

0:27:180:27:20

still looking at you, there's something really eerie about that.

0:27:200:27:24

I think you need to change that, and a very simple way of changing

0:27:240:27:27

-that is make sure the eyes close when it lies flat.

-Sleep eyes.

0:27:270:27:30

There're called, yes, sleep eyes.

0:27:300:27:31

Sleep eyes. I think that's important,

0:27:310:27:33

and I think you do have to go back to the drawing board.

0:27:330:27:36

I'm not going to invest because I don't know whether that £70,000 is

0:27:360:27:41

enough to keep the business alive and make the changes necessary.

0:27:410:27:46

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

0:27:460:27:49

-OK. Thank you very much. Thank you.

-Good luck.

0:27:490:27:51

Game over for Francis,

0:27:550:27:56

who couldn't convince the Dragons her dolls had mass appeal.

0:27:560:28:00

She leaves the Den with no more cash than when she arrived.

0:28:000:28:05

-PETER:

-I think she's really investable.

-Oh, yes.

-She was good.

0:28:050:28:08

I think the concept's right.

0:28:080:28:09

It's sad it's looking like that.

0:28:090:28:11

Will I go out next week and start making new face moulds

0:28:120:28:15

for all of the dolls? Probably not.

0:28:150:28:18

So, maybe the Dragons might have missed out on this one.

0:28:180:28:21

Still to come...

0:28:270:28:29

Touker, can you see me?

0:28:290:28:30

I can see you. I can definitely see you.

0:28:300:28:33

Are there hazardous conditions ahead?

0:28:330:28:36

You should not sell a franchise to an unsuspecting person

0:28:360:28:39

without having proven the model.

0:28:390:28:41

Thanks for answering the question,

0:28:410:28:43

but can I direct my questions to them?

0:28:430:28:44

I thought they'd answered it.

0:28:440:28:46

They haven't even paused for breath.

0:28:460:28:48

-They haven't answered.

-OK. Sorry, sorry!

0:28:480:28:50

And can any of these entrepreneurs

0:28:520:28:54

navigate the Dragons to an investment?

0:28:540:28:57

I think the product is exceptional.

0:28:570:28:58

This has got Italian design written all over it.

0:28:580:29:01

You turned over £136,000.

0:29:010:29:02

Gross margin £96,000 and you've broken even.

0:29:020:29:05

That is quite rare.

0:29:050:29:07

Our next entrepreneur is hoping to make the world a prettier place.

0:29:160:29:20

He's here to pitch a salon business, which he plans to take global.

0:29:200:29:25

The Dragons really inspire me.

0:29:250:29:27

And I can see a lot of synergy in terms what I do, what they've done.

0:29:270:29:32

I think that there is a fine line

0:29:340:29:36

between coming across as a salesman and coming across as someone

0:29:360:29:41

that is very believable.

0:29:410:29:42

I hope I'm the latter.

0:29:420:29:44

I'm sure that they have an eye for talent,

0:29:470:29:50

and I would hope that they'll see some talent in me today.

0:29:500:29:53

Good afternoon, Dragons.

0:30:000:30:01

My name is Damien Zannetou,

0:30:010:30:02

and I'm the proud founder of an exciting new company

0:30:020:30:05

and concept called Aenea, the science of beauty.

0:30:050:30:08

I'm here today to pitch for £100,000

0:30:080:30:11

for 10% equity in my business.

0:30:110:30:13

So, what is Aenea?

0:30:130:30:15

Simply put, a wellness concept.

0:30:150:30:17

I've combined the hair and beauty,

0:30:170:30:19

salon, spa and clinic experience all under one roof,

0:30:190:30:22

but facilitated with its own private label product line at both the

0:30:220:30:26

professional and retail level,

0:30:260:30:28

consisting of an advanced anti-ageing cosmeceutical

0:30:280:30:31

ingredients and formulations.

0:30:310:30:33

I'm targeting the premium end of the market, but it's positioned on the

0:30:330:30:37

high street, designed for those customers

0:30:370:30:39

that want more treatments, less time,

0:30:390:30:41

with a high fashion and a celebrity focus.

0:30:410:30:44

My root to market is franchising, for a number of reasons.

0:30:440:30:48

Rapid roll-out within the territory,

0:30:480:30:50

less requirement for working capital,

0:30:500:30:52

less risk, but more importantly to create a distribution network for my

0:30:520:30:56

entire cosmetics range.

0:30:560:30:58

Over the past 12 to 18 months,

0:30:580:31:00

I've been working alongside team franchise consultants and experts to

0:31:000:31:04

create what I think is a modest development schedule,

0:31:040:31:06

to open 20 stores in the UK within the next three years,

0:31:060:31:10

and in parallel, 20 stores in the Middle East.

0:31:100:31:13

Each franchisee will pay a licence fee of £25,000 for a five-year

0:31:130:31:18

renewable term, with a 10% monthly management service fee and a monthly

0:31:180:31:22

marketing levy of 2%.

0:31:220:31:25

So far, I've signed a franchise in London.

0:31:250:31:28

I have pending applications for Bristol, for Liverpool

0:31:280:31:31

and for Brighton.

0:31:310:31:32

I also have a letter of intent from a lady in Riyadh, in Saudi Arabia,

0:31:320:31:36

with pending applications for Dubai and also Bahrain,

0:31:360:31:39

and I have a letter of intent for Nigeria.

0:31:390:31:42

And recently, I've just been asked to team up with a distributor

0:31:420:31:45

that would like to target the retail market in the UK and Ireland.

0:31:450:31:49

I've brought some products with me today.

0:31:490:31:50

I'd love to give you a sample,

0:31:500:31:52

and I'm sure you have plenty of questions.

0:31:520:31:54

Thank you!

0:31:540:31:55

With his salon, spa and product range combo...

0:31:590:32:03

-There's an exfoliator for you.

-Thank you.

0:32:030:32:05

Damien Zannetou thinks his business is a thing of beauty.

0:32:050:32:09

Have I just broken mine?

0:32:090:32:11

-Yes! Did you just break yours too?

-How do you get this out?

0:32:110:32:15

No, there's none in this.

0:32:160:32:18

This isn't coming out, either.

0:32:180:32:20

The entrepreneur is willing to hand over 10% of his equity in return

0:32:200:32:25

for a cool £100,000.

0:32:250:32:27

It's dying to come out, out of the top.

0:32:270:32:29

Oh, it's not supposed to do that.

0:32:290:32:31

The samples have hit some snagging issues with the Dragons.

0:32:310:32:35

Cor, Damien, it's pretty badly made.

0:32:350:32:37

-Why do you say that?

-Cos mine's broken and yours...

0:32:370:32:39

When I'm pulling this out now, look, it's like, it goes everywhere.

0:32:390:32:43

I wouldn't say it's badly made.

0:32:430:32:44

It won an award in 2014, and we won that as a highly commended range.

0:32:440:32:50

Now, Peter Jones wants to nail whether the business package

0:32:500:32:54

is robust enough for his liking.

0:32:540:32:55

I have to say, not a good first impression with the products

0:32:570:33:02

that you've handed out, but that being said,

0:33:020:33:04

I'm more keen to understand,

0:33:040:33:07

what on earth is this business?

0:33:070:33:10

-OK.

-Because I'm looking at that and seeing champagne and nail bar,

0:33:100:33:15

and them you pitch something completely different.

0:33:150:33:17

As I said earlier,

0:33:170:33:18

it's a combination of a saloon, spa, clinic experience.

0:33:180:33:21

What's a salon/clinic experience?

0:33:210:33:23

A beauty salon.

0:33:230:33:24

A hair and beauty salon, spa, and for each service we offer,

0:33:240:33:28

we have all our own product line.

0:33:280:33:31

So, why wouldn't somebody just set this up and do it themselves?

0:33:310:33:33

Why do they need you? Um.

0:33:330:33:37

That's a good question. They can do it themselves, but the fundamental

0:33:370:33:41

difference is that we've combined the three models together.

0:33:410:33:44

That's not difficult to do, is it?

0:33:440:33:46

If you've got a place big enough, you say, "I cut hair over there,

0:33:460:33:48

"and by the way, that's a nail bar,

0:33:480:33:49

"and actually, we sell a range of cosmetics over here."

0:33:490:33:52

-I don't get...

-I think what you're missing is the USP,

0:33:520:33:55

which is the product line.

0:33:550:33:57

It would take them years of research.

0:33:570:33:59

They haven't got their own product line.

0:33:590:34:01

If you'll just allow me to finish.

0:34:010:34:03

Your own product line is really badly put together.

0:34:030:34:05

You're asking me a question,

0:34:050:34:06

but you're not allowing me to finish the answer.

0:34:060:34:09

-No, because I've heard what I wanted to hear.

-OK.

0:34:090:34:11

-And I'm going to talk over you.

-They don't have their own product line.

0:34:110:34:14

They don't, because you're giving them a product line.

0:34:140:34:18

-Correct.

-Why would I sell your product line that actually, frankly,

0:34:180:34:22

breaks when you use it and it's a brand that nobody knows

0:34:220:34:25

over putting in my salon

0:34:250:34:27

brands everybody understands and knows and wants to buy?

0:34:270:34:32

I think that's the key,

0:34:320:34:33

is to expand the business through franchising and to make it a brand

0:34:330:34:37

that everyone is aware of.

0:34:370:34:38

In the skin care market, we are actually known

0:34:380:34:41

because we won an award in 2014 for a very prestigious event.

0:34:410:34:45

No champagne corks popping just yet,

0:34:490:34:52

as Peter Jones fails to get his head around the potential attractiveness

0:34:520:34:55

of Damien's business concept.

0:34:550:34:58

Now Nick Jenkins wants to comb through

0:34:580:35:01

the hair and beauty entrepreneur's

0:35:010:35:04

franchisee recruitment strategy.

0:35:040:35:06

People who buy franchises are people who would like to have their own

0:35:070:35:10

-business, haven't done it before.

-Sure.

0:35:100:35:11

They need the confidence of someone else's proven success, and they're

0:35:110:35:14

-prepared to give 10% of their income, in order...

-Absolutely.

0:35:140:35:17

..for the hand-holding process.

0:35:170:35:19

What are you telling these people about how successful your original

0:35:190:35:22

concept has been? Tell me about the numbers there?

0:35:220:35:24

Sure. So, I've told prospective franchisees that a normal standard

0:35:240:35:28

salon, spa, clinic concept could turn over about £750,000 a year.

0:35:280:35:32

Has yours turned over £750,000?

0:35:320:35:35

It has, yes. In year two, it did.

0:35:350:35:36

Tell me about the numbers on that one.

0:35:360:35:38

I want to know how successful that was.

0:35:380:35:39

Yeah, it's a really tricky one, and this is where I'd like to be

0:35:390:35:43

totally frank about the situation.

0:35:430:35:45

Basically, I ran into a trademark dispute for my product line.

0:35:450:35:49

So I had to force the company into liquidation.

0:35:490:35:51

Why would you make the company bankrupt with a trademark dispute?

0:35:510:35:56

-Exactly!

-It was advice I was given.

0:35:560:35:57

-By who?

-By a lawyer, an insolvency practitioner.

0:35:570:36:00

Who did you owe money to?

0:36:000:36:02

At the time, I owed some money to HMRC.

0:36:020:36:05

There was £75,000.

0:36:050:36:08

So, you've left that behind?

0:36:080:36:09

-Correct.

-So the taxpayer didn't get their money back from you?

0:36:090:36:12

I'll be totally frank, in 2014,

0:36:120:36:15

my father was my accountant, and sadly,

0:36:150:36:17

he passed away, but I was very much under the guidance of my father

0:36:170:36:22

up until that point.

0:36:220:36:24

When you started talking about this business

0:36:240:36:27

-that was £750,000 turnover...

-Yes.

0:36:270:36:29

-You started it in 2010.

-Yes.

-You closed the company down.

0:36:290:36:33

-You left debt behind?

-Yes.

0:36:330:36:35

-And you started New Co.

-Yes.

0:36:350:36:37

New Co ended up with these products under a different brand name.

0:36:370:36:40

-Yes.

-Tell me about that.

0:36:400:36:42

So today, I mean,

0:36:420:36:44

that business has been trading under the new franchise agreement

0:36:440:36:47

for about a month,

0:36:470:36:48

and it's turned over just under £55,000 for the month of May.

0:36:480:36:52

-And profit?

-That's running at about 20% profit.

0:36:520:36:56

So you made £10,000 net profit?

0:36:560:36:58

-Correct.

-That £10,000, then,

0:36:580:37:00

what would that have generated for you last month as a franchise?

0:37:000:37:03

10%. Which is £1,000.

0:37:030:37:05

You are valuing a business that has so far made £1,000 at £1 million?

0:37:060:37:10

If I'm able to answer.

0:37:120:37:13

I'd love to find out what you're going to say.

0:37:130:37:15

I knew the question was going to come up,

0:37:150:37:17

and I expected it to come from you as well.

0:37:170:37:20

Yeah, I worked with a third party company.

0:37:200:37:23

Because everything is based on projection,

0:37:230:37:26

they said that the only way that the whole business could be valued would

0:37:260:37:29

be on discounted cash flow.

0:37:290:37:31

So they actually came back with a valuation of £5 million.

0:37:310:37:34

I turned around and said that...

0:37:360:37:38

Can I ask you, Damien, what is discounted cash flow?

0:37:380:37:40

It's my cash flow at the end of year three, obviously.

0:37:400:37:44

You know, it's three years of cash flow forecasted.

0:37:440:37:47

Do you know what discounted cash flow is?

0:37:470:37:49

Yeah. It's taking my cash in the bank at the end of year three,

0:37:490:37:52

applying a discounted rate,

0:37:520:37:53

-which in our case was 50%.

-No, it's not.

0:37:530:37:56

Again, it's not something that I can really answer,

0:37:560:37:59

I've handed that over to a third party.

0:37:590:38:01

The tension in the Den shows no signs of letting up,

0:38:040:38:07

as Peter Jones uncovers gaps in Damien's business knowledge,

0:38:070:38:12

and his justification for that

0:38:120:38:14

has provided Nick Jenkins with some cause for alarm.

0:38:140:38:18

I'm a bit concerned about your reliance on external consultants,

0:38:180:38:20

to be perfectly honest. What you've demonstrated to Peter is

0:38:200:38:23

you've no understanding of what they're talking about.

0:38:230:38:25

You don't understand discounted cash flow.

0:38:250:38:27

You say "other people", it was always other people.

0:38:270:38:29

"Other people told me to shut my business down.

0:38:290:38:31

"What did I know?"

0:38:310:38:33

I want to know what YOU think.

0:38:330:38:35

But you don't know that.

0:38:350:38:37

-No, I'm not deflecting. I actually...

-But you are.

0:38:370:38:39

-No, I'm not.

-You've been constantly deflecting.

0:38:390:38:42

Because you know what I want to know,

0:38:420:38:43

if I'm a potential franchisee?

0:38:430:38:45

I've just got my redundancy payment of £30,000 or £40,000, right?

0:38:450:38:48

I think, "OK, well, I'll go to this guy.

0:38:480:38:49

"This guy will show me how to run my business so I can have success.

0:38:490:38:52

Right. Well, so,

0:38:520:38:54

just exactly how successful have you been so far?

0:38:540:38:56

-Oh, well you didn't. It went bust.

-I've... Again,

0:38:560:38:59

I don't want to keep going back to consultants, but I am working

0:38:590:39:03

with a top franchise consultant,

0:39:030:39:04

and her advice has been that the first two to three franchisees

0:39:040:39:08

in my year one of trading

0:39:080:39:09

-will be development franchisees.

-You're avoiding the question.

0:39:090:39:12

-You, Damien...

-Yeah.

-..are supposed to be telling me

0:39:120:39:14

-how to run a business.

-Yes.

-How am I supposed to have faith in that?

0:39:140:39:18

Well, I know exactly how to make money

0:39:180:39:20

in terms of running that business.

0:39:200:39:21

-First and foremost.

-Have you ever done it?

0:39:210:39:23

If you'll allow me to answer, I can give you an answer to your question.

0:39:230:39:26

I'm very big on online marketing strategies and digital strategies.

0:39:260:39:30

-OK, have you ever done it?

-Yeah.

0:39:300:39:31

So my website currently receives 11,500 unique visitors per month.

0:39:310:39:35

11,500 visitors, 43% bounce rate,

0:39:370:39:41

plus to turnover £50,000 and make a profit of £10,000,

0:39:410:39:44

which is still my first month of trading,

0:39:440:39:47

I know exactly how I can go into one of these operations and make money,

0:39:470:39:51

and the reason is because

0:39:510:39:52

I understand the digital marketing aspect.

0:39:520:39:54

So in answer to your original question,

0:39:540:39:56

when I'm speaking to my franchisees,

0:39:560:39:58

the first thing I say to them is we are a stand-alone store in Clapham,

0:39:580:40:02

and if you enter into this agreement,

0:40:020:40:04

-you are a development franchisee.

-You've only been going a month.

0:40:040:40:07

So it's not proven, and they understand that.

0:40:070:40:10

Damien gets the last word in a verbal sparring match

0:40:100:40:14

over his ability to roll out franchises.

0:40:140:40:17

But his insistence he can make a string of salons a success

0:40:170:40:21

won't wash with Deborah Meaden.

0:40:210:40:24

My concern is that your original business,

0:40:240:40:28

which was turning over £750,000 a year,

0:40:280:40:31

you've now turned into a franchise.

0:40:310:40:33

-Yes.

-And it now turns over £600,000 a year.

0:40:330:40:37

-Yes.

-So that's the evidence. Now, forget the words.

0:40:370:40:40

-Yeah.

-You can stand and talk to me till you're blue in the face.

0:40:400:40:43

No, I'm not here to paint a pretty picture.

0:40:430:40:44

-I'm only interested in fact.

-Yeah.

0:40:440:40:46

Now, you give me the evidence I'm going to make more money through

0:40:460:40:49

your franchise than actually doing it on my own.

0:40:490:40:52

OK. First and foremost, in direct answer to your question,

0:40:520:40:56

you are correct that there is no evidence,

0:40:560:40:58

-because it's a new company and a start-up.

-So... Stop there.

0:40:580:41:01

-There is absolutely no evidence.

-There is no evidence.

0:41:010:41:03

So, now what you've done is you...

0:41:030:41:05

How much money have you spent with your franchise consultants?

0:41:050:41:07

Around 7,000 or 8,000.

0:41:070:41:09

So what you've actually done

0:41:090:41:11

is spent your time not building evidence,

0:41:110:41:13

you've spent your time building paperwork.

0:41:130:41:15

I've done both. I have done both.

0:41:150:41:17

All right, lovely. So let's go back to the evidence.

0:41:170:41:20

-Give me the evidence.

-Well, as I said, the first month of trading,

0:41:200:41:23

we've produced 55,000, but I can't...

0:41:230:41:25

No, but that's evidence that the income goes down

0:41:250:41:28

when I go into your franchise.

0:41:280:41:30

As I've said, my franchisees for the first year

0:41:300:41:33

are development franchisees. They are aware that there is no evidence.

0:41:330:41:36

No. No, Damien, I'm not hearing that

0:41:360:41:37

and I'm not going to let you get away with that.

0:41:370:41:39

So I'm just going to say those two words.

0:41:390:41:41

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

0:41:410:41:43

That unproven business model loses Damien his first investor.

0:41:460:41:51

But will the Dragon who franchised her way to the top of the global

0:41:510:41:54

restaurant business have a different perspective on things?

0:41:540:41:57

I've spent many, many years of my life franchising,

0:42:000:42:04

and I've spent a long time, I've done it very successfully,

0:42:040:42:06

and I spent a long time going around a lot of franchise fares as well,

0:42:060:42:09

so I know what's out there.

0:42:090:42:11

-Yes.

-Now, good franchisors, they prove the model, they go out there,

0:42:110:42:15

they make it work, and they go, "You know what?

0:42:150:42:17

"I've got a quick route to market here."

0:42:170:42:19

Look at Domino's. Did a fantastic job.

0:42:190:42:21

You should not sell a franchise without having proven the model,

0:42:210:42:24

and that is why I'm out.

0:42:240:42:27

-OK. Thank you.

-I'm going to make it very short, Damien,

0:42:290:42:31

you seem like a very nice guy.

0:42:310:42:33

You need to learn a lot. Stick to what you're doing.

0:42:330:42:36

-OK.

-Prove the concept.

0:42:360:42:37

-Thank you.

-Don't try and sell anything to anybody at the moment.

0:42:370:42:40

-No.

-Prove it for a whole year, then decide what you want to do with it.

0:42:400:42:44

I'm afraid I'm not going to invest, I'm out.

0:42:440:42:47

OK, thank you.

0:42:470:42:48

Damien, it's not gone well.

0:42:500:42:52

But I have to say, you've been dealt the right hand because you have come

0:42:520:42:55

in here without anything of substance.

0:42:550:42:58

I think you need to clearly go away

0:42:580:43:01

and rethink how you're going to do this.

0:43:010:43:04

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

0:43:040:43:06

Peter Jones isn't sharing Damien's vision either

0:43:090:43:13

and becomes the fourth Dragon to walk away.

0:43:130:43:17

It's left to e-commerce millionaire Nick Jenkins to have the final say.

0:43:170:43:23

I think... Hopefully... You say that you've...

0:43:230:43:25

You've consistently said throughout this

0:43:250:43:27

that you understand and you agree.

0:43:270:43:29

I hope you understand that you haven't got anything yet.

0:43:290:43:33

So if I was you, I'd...

0:43:330:43:34

Can I show you some agreements that I do have?

0:43:340:43:37

-Or is that not an option?

-No, no,

0:43:370:43:39

I'm not interested in you showing me any agreements because, honestly,

0:43:390:43:42

I think the advice you're getting from everybody is that you might

0:43:420:43:44

well be able to sell some franchises,

0:43:440:43:46

but this thing will fall flat on its face if those guys don't actually

0:43:460:43:49

sell anything through their salons and they go bust,

0:43:490:43:51

so it's not good for them and it's not go to be good for you.

0:43:510:43:54

Which is why I said I'll prove it.

0:43:540:43:55

So, if I was you, forget about the franchise business

0:43:550:43:58

and run a decent business in Clapham.

0:43:580:43:59

And then open another business and prove that you can do that.

0:43:590:44:02

When you've got a chain of four or five and you're confident

0:44:020:44:04

you can help others to do that,

0:44:040:44:05

then think about a franchise business.

0:44:050:44:07

That was kind of my strategy, but with your...help.

0:44:070:44:09

Oh, good, well, I'm glad it's your strategy, but I'm out.

0:44:090:44:12

Thank you for your time. I apologise if I've upset anyone.

0:44:140:44:17

-That wasn't my intention.

-Cheers, Damien.

-Thank you.

-Thanks.

0:44:170:44:20

Bye-bye.

0:44:200:44:22

Damien's hopes for a Dragon partner in his hair and beauty business are

0:44:220:44:26

cut and finished by Nick Jenkins,

0:44:260:44:29

after a pitch that certainly provoked some intense debate.

0:44:290:44:32

Do it on my own.

0:44:320:44:34

It went terrible.

0:44:340:44:35

But my head is held high and I'm going to go away,

0:44:350:44:38

I'm going to prove my model, I'm going to sign up my franchisees,

0:44:380:44:42

I'm going to make them hugely successful.

0:44:420:44:45

Watch this space.

0:44:450:44:46

When our next entrepreneurs to enter the Den moved to London from Italy,

0:44:560:45:01

they found navigating their way through the city traffic

0:45:010:45:04

a pretty hairy experience,

0:45:040:45:05

which gave them an idea for a product which they've since

0:45:050:45:09

brought to market.

0:45:090:45:11

We are a good team, he has business skills, I have technical skills.

0:45:230:45:28

We have everything we need to set the product in place,

0:45:280:45:31

so let's do it.

0:45:310:45:32

You're making me go dizzy, I don't know about you.

0:45:490:45:52

TOUKER LAUGHS

0:45:520:45:55

Hello, Dragons. My name is Agostino Stilli.

0:46:000:46:02

This is my business partner, Luca Amaduzzi.

0:46:020:46:05

We are here today looking for an investment of £45,000,

0:46:050:46:08

with a return of 5% equity in our company, CYCL.

0:46:080:46:12

We are here today to present you WingLights.

0:46:120:46:15

WingLights are a direction indicator for bicycle

0:46:150:46:17

that flash amber on the side of your handlebar.

0:46:170:46:20

They are designed to make sure that you are

0:46:200:46:22

noticed when it's most needed, when turning and changing lane.

0:46:220:46:25

With a single tap, they emit a bright LED light.

0:46:250:46:28

They are extremely easy to fit.

0:46:280:46:29

Once the mounter is in position,

0:46:290:46:31

the WingLights snap on in seconds, and when you secure your bike,

0:46:310:46:34

-they snap off.

-We entered the market in July 2015,

0:46:340:46:38

and nowadays we already sold more than 8,000 units.

0:46:380:46:41

In the past eight months, we distribute in 14 different

0:46:410:46:43

countries around the world. Together with the premium magnetic version,

0:46:430:46:47

we are already commercialising a fixed version,

0:46:470:46:50

and we are planning to launch a new version

0:46:500:46:52

in the upcoming months.

0:46:520:46:53

Thank you very much for your attention,

0:46:530:46:55

we welcome now any questions you may have and we are passing now some

0:46:550:46:57

samples around so you can get your hands on our product.

0:46:570:47:01

Looking to work in tandem with a Dragon are Agostino Stilli...

0:47:040:47:08

-Grazie.

-Prego.

0:47:080:47:10

..and his business partner Luca Amaduzzi.

0:47:100:47:13

Here we are. Two different colours.

0:47:130:47:15

They want to kick-start expansion of their business

0:47:150:47:18

with a £45,000 investment.

0:47:180:47:21

In return, they are offering 5% of their company.

0:47:210:47:25

Peter Jones wants them to shed more light on the product in question.

0:47:250:47:30

The two versions, can you just quickly describe,

0:47:310:47:33

so what are the two different versions again?

0:47:330:47:35

Yes, so basically you have the magnetic version

0:47:350:47:38

that is in your hands now.

0:47:380:47:39

It has a mounter that stays always on the bike,

0:47:390:47:43

then you have a keyring with the two lights assembled on it.

0:47:430:47:46

You can detach the two lights from the keyring like this. OK?

0:47:460:47:50

And is this something you're doing full-time now?

0:47:500:47:53

Yes, Agostino is also finishing a PhD in robotics part-time.

0:47:530:47:59

So that's my last year.

0:47:590:48:00

And give me an idea, you've sold them, what's the revenue?

0:48:000:48:04

What's the gross margin?

0:48:040:48:05

And what money have you got left over?

0:48:050:48:08

The revenue is £136,000

0:48:080:48:12

with a gross profit of £96,000.

0:48:120:48:16

On the net profit, at this stage, we broke even.

0:48:160:48:20

With a neatly designed product and a business that's in the black,

0:48:220:48:26

the entrepreneurs are off to a good start.

0:48:260:48:29

But Deborah Meaden wants to illuminate

0:48:290:48:32

a potential fly in the ointment.

0:48:320:48:34

Right at the beginning, you've got a lot about you, about your pitch.

0:48:350:48:39

You can see, this has got Italian design written all over it,

0:48:390:48:42

cos it's beautiful. You know, it feels nice, it looks good.

0:48:420:48:45

My objection to this would be

0:48:450:48:50

its visibility, because actually when you were riding in circles,

0:48:500:48:53

there was quite a lot of time when I couldn't see that light.

0:48:530:48:57

And at the moment, you know, good old-fashioned put your arm out -

0:48:570:49:00

actually, that's very clear.

0:49:000:49:03

If you start relying on something that has less visibility,

0:49:030:49:06

for me it feels like it might actually make it less safe

0:49:060:49:08

rather than more safe.

0:49:080:49:10

I would say - I'm a cyclist,

0:49:120:49:14

-Deborah is the person who will knock me off the bicycle.

-Yes.

0:49:140:49:16

She's looking at it from the perspective of the driver

0:49:160:49:19

looking at this, and I'm looking at it

0:49:190:49:20

from the perspective of me riding a bike.

0:49:200:49:22

Actually, the question of having it on the handlebars,

0:49:220:49:25

it's the widest part of the bike,

0:49:250:49:27

and if you have it on the back,

0:49:270:49:28

you have to have a stalk coming out...

0:49:280:49:30

That's lovely, thanks for answering the question,

0:49:300:49:32

but can I direct my questions to them?

0:49:320:49:34

-I thought they'd answered it, sorry.

-No,

0:49:340:49:36

they haven't even paused for breath, they haven't answered it.

0:49:360:49:39

-Sorry.

-So that's my objection.

0:49:390:49:42

I'm glad Nick interjected, cos that's my worry,

0:49:420:49:45

that people will think they are covered because their light is here,

0:49:450:49:49

but actually I, as a driver, I can't see you.

0:49:490:49:52

There are other indicators in the market.

0:49:540:49:56

Mostly they are placed just here.

0:49:570:50:01

-Yes.

-Ours even all-round visibility

0:50:010:50:05

and you are always sure that when you turn it on,

0:50:050:50:08

it turns on because you actually see it.

0:50:080:50:11

-PETER:

-Is there another thing here,

0:50:110:50:14

I mean the WingLight, is it also for...

0:50:140:50:16

the slimmer person.

0:50:160:50:18

The slimmer person?

0:50:180:50:19

I will show you what I mean. Can you see behind me?

0:50:190:50:22

-LUCA:

-This is kind of the smallest handlebar you can find.

0:50:240:50:28

But it's from behind

0:50:280:50:29

that's the problem, isn't it? It's not in front.

0:50:290:50:31

-DEBORAH:

-No, can't see you.

0:50:310:50:32

If your right indicator was on now, I couldn't see it.

0:50:320:50:34

-Can you not see?

-I can see the right, but I can't see the left.

0:50:340:50:38

-PETER:

-If you are bigger like me, it doesn't work.

0:50:380:50:40

-Touker, can you see me?

-I can see you.

0:50:400:50:42

-Can you see both lights?

-Yes, I can see both lights.

0:50:420:50:45

A Den divided over the visibility of the lights,

0:50:490:50:52

but for Sarah Willingham,

0:50:520:50:54

seeing them is only half of the problem.

0:50:540:50:57

I'm struggling with it a little bit.

0:50:580:51:01

Because I'm so used to things flashing on a bike,

0:51:010:51:04

I don't know that that's an indicator.

0:51:040:51:06

That could just be a light.

0:51:060:51:08

It is orange, just like all the other indicators,

0:51:110:51:14

so from that, you should already have a hint.

0:51:140:51:18

Can I say, I'm just a little bit more worried about cycling

0:51:190:51:22

anywhere near Sarah in a car.

0:51:220:51:25

Just on account of the fact that a flashing orange light to the side of

0:51:250:51:29

any scooter or motorbike generally indicates turning.

0:51:290:51:34

Bikes at night-time are covered in flashing lights.

0:51:340:51:36

Any good cyclist...

0:51:360:51:37

-Not orange ones.

-And not this kind of flashing.

0:51:370:51:40

According to UK law, anyhow, it is still mandatory to make a signal.

0:51:400:51:45

So you see it more as a safety,

0:51:450:51:47

cos there's no doubt that as a driver

0:51:470:51:49

I'm not expecting a flashing light,

0:51:490:51:51

I'm not expecting an indicator on a bike,

0:51:510:51:53

but I am expecting them to signal to me that they are going to turn left,

0:51:530:51:57

and it's that signal that is going to stop me running them over.

0:51:570:52:01

That signal is not very convenient if you think how you do the signal,

0:52:010:52:05

so when you are going to turn, it is normally the hand signal,

0:52:050:52:08

look behind you, reduce the control on your handlebar

0:52:080:52:12

in a moment when you probably need to brake

0:52:120:52:14

because you have to reduce your speed for turning.

0:52:140:52:16

-At that point...

-With these kind of things,

0:52:160:52:18

you can start to signal before

0:52:180:52:20

and you can announce the visibility of your signal system.

0:52:200:52:23

I think it is such a big education

0:52:250:52:29

for the drivers, actually,

0:52:290:52:31

cos we are just not there yet,

0:52:310:52:34

to know that this means a bike

0:52:340:52:37

is turning right or is turning left and is not just

0:52:370:52:40

another half of two flashing lights.

0:52:400:52:43

I can't get past that,

0:52:430:52:45

so I'm afraid it's not an investment for me, so I'm afraid I'm out, guys.

0:52:450:52:49

Sarah Willingham is out,

0:52:520:52:55

but which way is keen cyclist Nick Jenkins going to turn?

0:52:550:52:59

What I am really impressed with is that you started, you turned over

0:53:010:53:05

136,000, gross margin 96, and you have broken even,

0:53:050:53:09

and I think that is quite rare,

0:53:090:53:12

and that's a pretty good indication that you are pretty backable.

0:53:120:53:16

So I'm going to make you an offer.

0:53:180:53:20

So I'm going to make you an offer of all of the money but for 15%

0:53:230:53:28

of the business, but I think you've got a cracking business.

0:53:280:53:32

-Thank you.

-Thank you.

0:53:320:53:34

Nick Jenkins thinks the duo are going places,

0:53:350:53:38

and he wants to join them.

0:53:380:53:40

Now Peter Jones is next to have his say.

0:53:420:53:45

I think the product is exceptional.

0:53:470:53:50

The quality and the way you've put this together, I think,

0:53:500:53:53

is as good as I've ever seen a product.

0:53:530:53:56

-Thank you.

-You know, congratulations.

0:53:560:53:57

But I do think that you are going to struggle selling

0:53:590:54:03

and making money out of this product.

0:54:030:54:05

I think you do have to come up with some other products

0:54:070:54:11

as a wider range.

0:54:110:54:13

So I'm not going to invest in you today,

0:54:130:54:15

I'm going to say that I'm out,

0:54:150:54:17

but I think it is exceptional what you've done and I congratulate where

0:54:170:54:20

-you've got to.

-Thank you.

-Thank you very much.

0:54:200:54:23

I'll say a very strange thing.

0:54:280:54:29

I wish you had come in with a different product.

0:54:290:54:32

You are incredibly backable.

0:54:320:54:34

It's a market that I'm not...

0:54:340:54:36

I don't even cycle, so I can't convince myself.

0:54:360:54:40

However much I sit here and try,

0:54:400:54:41

I can't convince myself that this is one I'm going to love, so I won't be

0:54:410:54:44

investing. I'm out.

0:54:440:54:46

Deborah Meaden becomes the third Dragon to step away from a deal...

0:54:500:54:55

..which leaves only Touker Suleyman able to step things up a gear

0:54:560:55:00

and rival Nick Jenkins' 15% off.

0:55:000:55:04

Well, I am the one

0:55:040:55:07

who has a business connection to bicycles.

0:55:070:55:11

We have a website called Bike Soup.

0:55:110:55:14

-Bike Suit?

-Did you do your homework?

0:55:140:55:17

Er, Bike Suit?

0:55:170:55:19

-Soup.

-Soup!

0:55:190:55:21

-No, I don't know.

-Did you do any homework on which Dragon

0:55:210:55:24

you might want to invest?

0:55:240:55:26

-PETER:

-Well, obviously not.

-Obviously not, OK, so...

0:55:280:55:32

I have a lot of experience in the retail world.

0:55:320:55:36

I know a lot of retailers in this sector.

0:55:360:55:38

And I'm going to make you an offer.

0:55:400:55:42

But I'm going to want more than what Nick wants.

0:55:450:55:48

I'll give you £60,000,

0:55:490:55:53

but I want 25%.

0:55:530:55:54

OK.

0:55:570:55:58

-I think we...

-Go for a chat.

-Yes.

0:55:580:56:01

You want to go and have a chat at the back wall?

0:56:010:56:02

-Yes, thank you for your offer.

-Thank you for your offer.

0:56:020:56:05

Touker Suleyman's bid of more money than the £45,000

0:56:080:56:12

the entrepreneurs were looking for has got to be tempting.

0:56:120:56:15

THEY SPEAK IN ITALIAN

0:56:150:56:18

But at 25%, 20 more than the five they were offering,

0:56:200:56:25

he's significantly devaluing the business.

0:56:250:56:28

Will they go for the extra cash or Nick Jenkins' 15%?

0:56:280:56:33

-OK.

-OK?

0:56:330:56:34

We are considering...

0:56:430:56:45

And, Nick, would you go down to 12 and a half?

0:56:460:56:50

Yeah, I could do 12 and a half.

0:56:540:56:56

We've got a deal.

0:56:590:57:01

-Excellent.

-Thanks very much.

0:57:010:57:04

A tour de force of a pitch resulting in a £45,000 cash injection for the

0:57:040:57:10

entrepreneurs and a deal that mixes business with pleasure

0:57:100:57:14

for Nick Jenkins.

0:57:140:57:15

HE EXCLAIMS

0:57:150:57:18

Well done.

0:57:180:57:19

We really think Nick is on our wavelength,

0:57:190:57:21

so, yeah, I think we can really do great things together

0:57:210:57:24

and we are looking forward to working with him.

0:57:240:57:28

Yes, definitely.

0:57:280:57:29

So, as the Den doors close,

0:57:360:57:37

we have seen two pairs of entrepreneurs brave enough

0:57:370:57:40

to negotiate with the Dragons.

0:57:400:57:43

Now, in business, it's important to know when to stand firm and when to

0:57:430:57:46

compromise. Joe and Andy stuck to their guns and their equity,

0:57:460:57:50

but left without investment,

0:57:500:57:52

but the guys from CYCL did manage to settle on a deal.

0:57:520:57:56

Coming up next time...

0:57:590:58:00

What about a high-five?

0:58:000:58:02

You've done absolutely the wrong thing here.

0:58:020:58:04

Do you want to offer me something

0:58:040:58:06

that my ten-year-old would probably decline?

0:58:060:58:09

I can tell you one thing, you will look back and say, "Mistake."

0:58:090:58:14

There's not a chance.

0:58:140:58:16

I am definitely out.

0:58:160:58:19

No, I'm not going to put myself in your shoes because I don't have to.

0:58:190:58:24

That is absolutely bonkers.

0:58:240:58:26

I think you've blown it.

0:58:260:58:28

Do you know, I think I'm going to make you an offer.

0:58:280:58:30

If it helps, I'm already regretting going out.

0:58:300:58:33

Peter Jones, Deborah Meaden, Touker Suleyman, Sarah Willingham and Nick Jenkins take their seats as a fresh batch of entrepreneurs prepare to give them the elevator pitch of a lifetime.

In this episode, an American entrepreneur is hoping for investment in her range of dolls with historical tales to tell, a young Italian duo are hoping the Dragons will see the design flair and commercial possibilities in their bicycle indicator lights and a couple of bee keepers try to tempt the Dragons with their honey-infused drink. Will the Den be a hive of investment activity or will there be a sting in the tale?