0:00:02 > 0:00:04Tonight, on Dragons' Den...
0:00:08 > 0:00:12You've come in with the most ludicrous, ridiculous valuation.
0:00:12 > 0:00:14It's never going to happen.
0:00:15 > 0:00:18- That's a genius idea. You're hired. - Genius idea!- You are hired.
0:00:18 > 0:00:20- That IS a genius idea! - That's for free. That's Touker time.
0:00:20 > 0:00:23I don't think your branding's strong at all.
0:00:23 > 0:00:26You've had a lot of good things said to you
0:00:26 > 0:00:28but I'm going to tell you what I think.
0:00:28 > 0:00:30I hate it.
0:00:31 > 0:00:32Not terribly exciting, is it?
0:00:34 > 0:00:37I think you've done great. I'm going to make you an offer.
0:01:10 > 0:01:12Welcome to Dragons' Den,
0:01:12 > 0:01:15the place where entrepreneurs get just one chance
0:01:15 > 0:01:18to impress five industry big-hitters
0:01:18 > 0:01:22who have the money and the power to change their lives.
0:01:23 > 0:01:27Our first entrepreneur has spent the last couple of years
0:01:27 > 0:01:29leading a double life.
0:01:32 > 0:01:36Teacher by day, start-up businessman after 3.30.
0:01:37 > 0:01:39I'm passionate about the business
0:01:39 > 0:01:42and I'm also passionate about teaching as well.
0:01:42 > 0:01:44Obviously, the Dragons are a little bit better behaved
0:01:44 > 0:01:46than schoolchildren - just a little bit though.
0:01:46 > 0:01:48Though I may have to ask them
0:01:48 > 0:01:50to straighten up their ties and sit up straight.
0:01:50 > 0:01:54And there's one particular Dragon Kevin thinks is first-class.
0:01:54 > 0:01:57The Dragon that I'd really love to work with is Touker Suleyman.
0:01:57 > 0:02:01He's got a background in the menswear business
0:02:01 > 0:02:03and I think he would understand our audience
0:02:03 > 0:02:05and what we're trying to achieve.
0:02:06 > 0:02:08But can he convince the investors
0:02:08 > 0:02:11his business is worthy of their cash?
0:02:14 > 0:02:16Hello, Dragons.
0:02:16 > 0:02:20My name is Kevin Moore and I am the director of Comb and Blade.
0:02:20 > 0:02:23We are an online men's grooming retailer
0:02:23 > 0:02:26and we specialise in the sale of traditional grooming products,
0:02:26 > 0:02:29including hair pomades, wet shaving products
0:02:29 > 0:02:31and beard and moustache care products.
0:02:32 > 0:02:35I came up with the idea for the business, as I found it difficult
0:02:35 > 0:02:37to get hold of products that I liked from the USA
0:02:37 > 0:02:41and I'd often have to pay large shipping charges and taxes,
0:02:41 > 0:02:44which would make the product very, very expensive.
0:02:44 > 0:02:48I'm here today to ask for an investment of £45,000
0:02:48 > 0:02:52in return for a 15% equity stake.
0:02:52 > 0:02:56Our total turnover for the last two years was just over £50,000
0:02:56 > 0:02:59from around 4,000 sales
0:02:59 > 0:03:02and this was with a starting budget of just £1,500.
0:03:02 > 0:03:05I believe the business has tremendous potential
0:03:05 > 0:03:08in both retail and wholesale markets.
0:03:08 > 0:03:10The reason we're seeking extra investment
0:03:10 > 0:03:12is to allow us to target that wholesale market
0:03:12 > 0:03:15and bring in more stock. Thank you for your time, Dragons.
0:03:15 > 0:03:18- I'd be happy to answer any questions.- OK.
0:03:21 > 0:03:25Mail order preening products is the business on offer
0:03:25 > 0:03:27from moonlighting teacher Kevin Moore.
0:03:28 > 0:03:30Look at these. Seem lovely.
0:03:30 > 0:03:33The dapper entrepreneur needs £45,000
0:03:33 > 0:03:35to take his business wholesale.
0:03:35 > 0:03:38In return, he'll give away 15%.
0:03:38 > 0:03:40Kevin, can I compliment you on the way that you dress?
0:03:40 > 0:03:44Thank you very much. I like your socks, Peter. They're excellent too.
0:03:44 > 0:03:46- LAUGHTER AND GROANS - Oh, don't! Come on!
0:03:46 > 0:03:49- First impressions count. - Yeah, absolutely. Thank you.
0:03:49 > 0:03:51With the flattery out of the way,
0:03:51 > 0:03:56fashion giant Touker Suleyman wants to set the trend with the questions.
0:03:59 > 0:04:04Describe what each one of these products do. Cos they're very...
0:04:04 > 0:04:07- They're not familiar.- Yeah. - They're all American?
0:04:07 > 0:04:08Many of them are American.
0:04:08 > 0:04:10There are some Australian brands that we stock.
0:04:10 > 0:04:12Give us an idea of three or four of the products.
0:04:12 > 0:04:15The majority of what we sell are water-based pomades.
0:04:15 > 0:04:19A pomade, traditionally, was what people might have used in the '50s
0:04:19 > 0:04:21to get the slicked back look. As you can see,
0:04:21 > 0:04:23they come in lots of weird and wonderful brands
0:04:23 > 0:04:26and there's sort of quite a culture around them as well,
0:04:26 > 0:04:30- in terms of the customers that buy them.- And you want the investment...
0:04:30 > 0:04:34- Yeah.- ..so that you can wholesale this.- Absolutely, yeah.
0:04:34 > 0:04:38And you say the business at the moment is only online?
0:04:38 > 0:04:39It's just online, yes.
0:04:39 > 0:04:44- And you've turned over £45,000 over three years?- £50,000 over two years.
0:04:44 > 0:04:47£50,000, sorry. Break it down over the two years.
0:04:47 > 0:04:50- Year one, the turnover was £30,000. - Yeah.
0:04:50 > 0:04:54- Gross profit from that was just over £5,000.- Yeah.
0:04:54 > 0:04:58And the net was slightly under, so minus £100.
0:04:58 > 0:05:01The second year, the turnover was less, at 20K,
0:05:01 > 0:05:06but the profit was better at £7,000, with a net profit of around £1,500.
0:05:10 > 0:05:15Well, it's very apparent that it's a small business.
0:05:15 > 0:05:16Of course, I wouldn't deny that.
0:05:16 > 0:05:20But surely, with a turnover of £20,000...
0:05:20 > 0:05:22- I'm assuming you do something else at the same time.- Yes, I do.
0:05:24 > 0:05:26So, my background is in education.
0:05:29 > 0:05:31I've been a teacher for the last seven years
0:05:31 > 0:05:35and I've combined full-time teaching with establishing the business.
0:05:36 > 0:05:41- What do you teach, Kevin? - That was MY question. No!- Oh, sorry!
0:05:41 > 0:05:43Go on, what do you teach and how old?
0:05:43 > 0:05:46I teach IT and computing and it's secondary school.
0:05:46 > 0:05:48So, there's quite a lot of credibility
0:05:48 > 0:05:50- tied up in this whole pitch, isn't there?- Absolutely.
0:05:50 > 0:05:52If my students are watching, yeah,
0:05:52 > 0:05:54they won't let me off lightly if I make any big mistakes.
0:05:54 > 0:05:56- Exactly.- So, yeah...
0:05:56 > 0:05:57But Kevin...
0:05:59 > 0:06:00..with all due respect...
0:06:02 > 0:06:04..you can't expect me to invest in the business
0:06:04 > 0:06:07where you dip your toes in
0:06:07 > 0:06:10as and when you've got an hour here in your lunch break or the evening.
0:06:10 > 0:06:13I mean, it's really not a business.
0:06:14 > 0:06:16OK, I don't see it like that.
0:06:16 > 0:06:18I invested £8,000 of my own money
0:06:18 > 0:06:21which I borrowed from my wedding fund,
0:06:21 > 0:06:23so I'm not sure that my wife's too happy about that.
0:06:23 > 0:06:26So, I've made a commitment myself.
0:06:26 > 0:06:30Teaching's a tough job but I do work hard to make the business work.
0:06:30 > 0:06:32- Nobody's doubting you don't work hard.- Yeah.
0:06:32 > 0:06:36All I'm trying to say, you want to enter an arena of wholesale
0:06:36 > 0:06:40but it needs full-time people to run a business.
0:06:42 > 0:06:45A reality check for the entrepreneur,
0:06:45 > 0:06:47as his preferred Dragon doubts his ability
0:06:47 > 0:06:50to head up a company and hold down a day job.
0:06:52 > 0:06:55Now internet mogul Nick Jenkins wants to learn
0:06:55 > 0:07:00about Kevin's plans to upscale his business from website to warehouse.
0:07:01 > 0:07:04You're a classic example of how it's perfectly possible,
0:07:04 > 0:07:07using the internet, and a wonderful example to your pupils,
0:07:07 > 0:07:10of how it's possible to set up a website,
0:07:10 > 0:07:12access a load of fanatics of a particular thing
0:07:12 > 0:07:15and, using paid-for search and different forms of online marketing,
0:07:15 > 0:07:17- you can develop a business.- Yeah.
0:07:17 > 0:07:20While still holding down a full-time job, which is pretty amazing.
0:07:22 > 0:07:24The moment you go into wholesale,
0:07:24 > 0:07:27- that's the point you pretty much have to give up the day job.- Yeah.
0:07:27 > 0:07:30And the question you have to ask yourself is
0:07:30 > 0:07:32are you really sure you want to give up your day job?
0:07:35 > 0:07:37I hope you understand that,
0:07:37 > 0:07:39to be fair to my employer and to my students,
0:07:39 > 0:07:42I'm not sure I could sort of commit and say yes right now.
0:07:42 > 0:07:43I think, realistically,
0:07:43 > 0:07:46if the business was making a significant amount of money
0:07:46 > 0:07:49and I felt that it could grow, that is a decision I would have to make
0:07:49 > 0:07:51and I would have to think about very carefully.
0:07:53 > 0:07:56I actually think the scale of the opportunity
0:07:56 > 0:07:59is always going to be determined by the effort
0:07:59 > 0:08:01and focus of the individual that's founded the company,
0:08:01 > 0:08:03and that's you.
0:08:04 > 0:08:06But I don't think you can do both.
0:08:08 > 0:08:11Concerns that Kevin's teaching career may conflict
0:08:11 > 0:08:15with the running of his business, overshadow proceedings again.
0:08:16 > 0:08:20And Deborah Meaden's been doing the maths on Kevin's sales.
0:08:23 > 0:08:26I can't ignore the fact that, actually, we're going south here.
0:08:26 > 0:08:30- There's no demonstration of profit. In fact, it's gone down.- Yeah.
0:08:30 > 0:08:33With regards to the figures, I know the turnover did go down,
0:08:33 > 0:08:36as a result of us focussing more on the website,
0:08:36 > 0:08:39but the gross profit and the net profit went up
0:08:39 > 0:08:42- in the second year.- Yeah, not really.- I know it's a small margins.
0:08:42 > 0:08:45We're a small business and I think we've got a good concept.
0:08:45 > 0:08:49Um, I think, in this industry, people buy into stories and people
0:08:49 > 0:08:52and I think there is a big audience out there for what we sell.
0:08:52 > 0:08:54It's just bringing us in touch with them.
0:08:54 > 0:08:56There is a big audience.
0:08:56 > 0:08:58- You are bang-on what's going on, aren't you?- Yeah.
0:08:58 > 0:09:01Everyone's looking very smart, they're very well-groomed.
0:09:01 > 0:09:04And at some point in the future, everybody's going to change that.
0:09:04 > 0:09:06They're going to do exactly the opposite,
0:09:06 > 0:09:08cos that's what we do as human beings.
0:09:08 > 0:09:10So, how are you going to protect yourself into the future
0:09:10 > 0:09:13if the market, WHEN the market swings against you?
0:09:13 > 0:09:16I think the key thing is, with the name, Comb and Blade,
0:09:16 > 0:09:18we are still selling traditional shaving products.
0:09:18 > 0:09:22At the moment, beards and moustaches are very much in fashion.
0:09:22 > 0:09:24You would hope, if that fashion fades,
0:09:24 > 0:09:26that people are then turning to shaving.
0:09:26 > 0:09:29So, I would hope that we have enough of a product offering
0:09:29 > 0:09:32that we can adapt and move, without losing our core brand,
0:09:32 > 0:09:34that we can still attract new customers.
0:09:37 > 0:09:39Top marks for Kevin,
0:09:39 > 0:09:43as he demonstrates a business that can move with the times.
0:09:43 > 0:09:45But for Nick Jenkins, there are question marks
0:09:45 > 0:09:49over whether the brand's ethos will survive as the business scales.
0:09:53 > 0:09:57You say it's a great story that people want to buy into.
0:09:57 > 0:09:58The moment you go into wholesale,
0:09:58 > 0:10:01the person at the other end of that chain doesn't know who you are.
0:10:01 > 0:10:04- Yeah.- They're not connected with you at all, so that story gets lost.
0:10:04 > 0:10:07- At which point, you are just part of a supply chain.- Yeah.
0:10:07 > 0:10:09That's pretty dull.
0:10:11 > 0:10:13So, from that point of view,
0:10:13 > 0:10:15I would love to see you use this as a case study
0:10:15 > 0:10:17for years to come and inspiring people.
0:10:17 > 0:10:21So, for that reason, I wish you all the best of luck, but I'm out.
0:10:23 > 0:10:28Nick Jenkins' concerns over the entrepreneur's expansion plans
0:10:28 > 0:10:30lead to his exit from the deal.
0:10:31 > 0:10:34And now that troublesome subject of Kevin's teaching career
0:10:34 > 0:10:36is back on the agenda.
0:10:39 > 0:10:42I honestly think that you coming in here and getting investment
0:10:42 > 0:10:46is such a conflict and I think that's on both sides, actually.
0:10:46 > 0:10:49I think the conflict for me, if I was to invest in you,
0:10:49 > 0:10:52would be, but he loves his job.
0:10:52 > 0:10:54And I'm not going to be that person to say,
0:10:54 > 0:10:58"Leave your job because, actually, I've invested in this business
0:10:58 > 0:11:00"and I need you completely focussed on it,
0:11:00 > 0:11:03"cos you are the ambassador, you are the person who's going to drive it."
0:11:03 > 0:11:05And at the same time, in no circumstances
0:11:05 > 0:11:08is somebody going to invest in you on a part-time basis.
0:11:08 > 0:11:10It's just not going to happen.
0:11:11 > 0:11:14- I'm not going to invest, so I'm out. - OK, thank you.
0:11:18 > 0:11:21You're a teacher, you present well but, actually, I can't tell you
0:11:21 > 0:11:24how many of these barber shops are springing up all over the place
0:11:24 > 0:11:27and in a minute, the market's going to move against them.
0:11:27 > 0:11:31So, for no other reason, because you have presented very well...
0:11:31 > 0:11:36- Thank you.- And as an ambassador for your brand, spot-on, absolutely.
0:11:37 > 0:11:40I won't be investing, Kevin. I'm out.
0:11:40 > 0:11:42Appreciate your advice. Thank you.
0:11:47 > 0:11:49I don't know what more could be said.
0:11:49 > 0:11:52I think that the last thing you want is my money
0:11:52 > 0:11:56and me or one of my team calling you at half past two,
0:11:56 > 0:11:59saying, "We're hearing orders didn't go out yesterday.
0:11:59 > 0:12:02- "What on Earth is going on?" - Yeah.- And you're sitting there...
0:12:02 > 0:12:06- In assembly.- ..talking in a separate environment with your kids
0:12:06 > 0:12:09and doing what you have chosen to do as your career.
0:12:09 > 0:12:12That's my issue. But you've demonstrated
0:12:12 > 0:12:15that people can set up a business in their spare time
0:12:15 > 0:12:19and have quite a cool business too. So, I wish you the best of luck,
0:12:19 > 0:12:23but I can't invest for those reasons, and I'm out.
0:12:25 > 0:12:27With Peter Jones declining a deal,
0:12:27 > 0:12:32fashion powerhouse Touker Suleyman is the last Dragon standing.
0:12:33 > 0:12:37Will he decide that Kevin's grooming products are a good addition
0:12:37 > 0:12:40to his own designer menswear portfolio?
0:12:40 > 0:12:44Kevin, um, you've had a lot of good things said to you.
0:12:44 > 0:12:46- Yes.- Yes?- Yeah.
0:12:46 > 0:12:48- Well, I'm going to tell you what I think.- OK.
0:12:51 > 0:12:53I hate it.
0:12:56 > 0:12:57OK.
0:12:59 > 0:13:03And the reason why I hate it - we have some amazing English brands.
0:13:03 > 0:13:06- Mm-hmm. - There's Trumper's in Jermyn Street.
0:13:06 > 0:13:09The Americans, the French, they queue up outside
0:13:09 > 0:13:11- to buy English products.- Yeah.
0:13:11 > 0:13:13And I do know their exports are phenomenal
0:13:13 > 0:13:16and I'm surprised that you're trying to bring products,
0:13:16 > 0:13:21which doesn't look authentic, it just looks like shoe polish.
0:13:21 > 0:13:26And, to me, to me, it just looks eurgh.
0:13:26 > 0:13:29I use hair products from Jermyn Street.
0:13:29 > 0:13:32The fact is, when I go into that store,
0:13:32 > 0:13:34I get that English feeling of,
0:13:34 > 0:13:38there's your paste, there's your blade. Everything's all there.
0:13:38 > 0:13:40Yeah, but your blade's probably made in Germany.
0:13:41 > 0:13:45It probably is but the fact is they've it together in such a way...
0:13:45 > 0:13:49- Yeah.- You have a great looking website, don't get me wrong.
0:13:49 > 0:13:52But the product, no way.
0:13:52 > 0:13:53So...
0:13:54 > 0:13:56..I'm not going to invest in you and I'm out.
0:13:56 > 0:13:59- OK, thank you for your constructive criticism.- OK.
0:14:01 > 0:14:04And that's the final bell for Kevin's pitch,
0:14:04 > 0:14:07as Touker Suleyman proves to be the maverick Dragon,
0:14:07 > 0:14:12bucking the trend with a scathing analysis of his product line.
0:14:12 > 0:14:15- I think it's cool. - PETER:- It's beautiful.- It's lovely.
0:14:15 > 0:14:17- It smells so good. - DEBORAH:- Smells like my granddad.
0:14:17 > 0:14:19It's four to one, guys. I don't like it.
0:14:19 > 0:14:22I'm always saying to my students, "If you work hard at something,
0:14:22 > 0:14:24"you can achieve something."
0:14:24 > 0:14:27I still feel that you can run a successful business
0:14:27 > 0:14:30and combine it with a full-time job. Other people have proved that.
0:14:30 > 0:14:33I was honest with them and I think they were very fair with me,
0:14:33 > 0:14:36and I take away their advice, if not their money.
0:14:43 > 0:14:46Our next entrepreneur has already tasted
0:14:46 > 0:14:48the boom and bust of business,
0:14:48 > 0:14:52after his last venture led to financial failure.
0:14:55 > 0:14:59I was pressing the reset button, riding it out and, in the meantime,
0:14:59 > 0:15:02trying to learn from all those mistakes that I'd made in the past.
0:15:02 > 0:15:05I would rather not have gone through that in my life,
0:15:05 > 0:15:09but it's taught me a lot, as far as my business journey is concerned.
0:15:09 > 0:15:11Now he's back with a new product,
0:15:11 > 0:15:14which he thinks has the recipe for success in the den.
0:15:14 > 0:15:16The worst thing that could happen
0:15:16 > 0:15:18would be for the Dragons to buck the trend
0:15:18 > 0:15:20and dislike the taste of the product,
0:15:20 > 0:15:23followed by disliking the business in general,
0:15:23 > 0:15:26followed by disliking me. I don't think that's going to happen,
0:15:26 > 0:15:28but they might just not like it and that would be bad.
0:15:36 > 0:15:38Hello, Dragons.
0:15:38 > 0:15:41My name's David Hastie and today I'm pitching for £75,000 investment
0:15:41 > 0:15:45for a 10% equity stake in my company, Nutrifiz Ltd.
0:15:45 > 0:15:49Nutrifiz is the world's first effervescent wheatgrass tablet.
0:15:49 > 0:15:51Wheatgrass is a highly nutritious plant,
0:15:51 > 0:15:55packed with vitamins, minerals and plant-based nutrients.
0:15:55 > 0:15:57It forms part of a booming supplement market worldwide,
0:15:57 > 0:16:00worth over 15.5 billion.
0:16:00 > 0:16:03Just add water and Nutrifiz delivers organic wheatgrass
0:16:03 > 0:16:08in a delicious and refreshing drink for energy, immune support,
0:16:08 > 0:16:10sports recovery and general wellness,
0:16:10 > 0:16:12without the grit, the mess or the horrible bitter taste
0:16:12 > 0:16:14of other wheatgrass products on the market.
0:16:14 > 0:16:16We started trading just over a year ago
0:16:16 > 0:16:18and have sold over 12,000 units
0:16:18 > 0:16:21and listed in over 500 retailers nationwide,
0:16:21 > 0:16:25including Holland & Barrett and Asda, with Nutrifiz For Kids.
0:16:25 > 0:16:28The team consists of myself, with a background in health
0:16:28 > 0:16:31and a degree in finance, and investors with decades of experience
0:16:31 > 0:16:35in bringing innovative products to global markets.
0:16:35 > 0:16:37Last year, we turned over £46,000
0:16:37 > 0:16:42with a gross profit of £17,500 and, although we made a net loss,
0:16:42 > 0:16:44we have plenty of stock with a long shelf life,
0:16:44 > 0:16:46and I've also spent the last three months
0:16:46 > 0:16:49purely focussing on laying the groundwork
0:16:49 > 0:16:51and solid foundations for global growth.
0:16:51 > 0:16:54This year, our projected turnover is £367,000,
0:16:54 > 0:16:57with a gross profit of £150,000,
0:16:57 > 0:16:59and net of £15,000.
0:16:59 > 0:17:03Thank you so much for your time and I now welcome any questions.
0:17:03 > 0:17:06But before I do that, would anyone like to try some Nutrifiz?
0:17:06 > 0:17:07- DRAGONS:- Yes, please.
0:17:09 > 0:17:13A wholesome pitch from effervescent entrepreneur David Hastie.
0:17:13 > 0:17:18He wants to supplement his company's assets with a £75,000 investment.
0:17:18 > 0:17:21- Does it need stirring, that on top, or...?- No.
0:17:21 > 0:17:23That's quite normal, that's what it does?
0:17:23 > 0:17:25That's from the saponins in the wheatgrass.
0:17:25 > 0:17:26- From the saponins?- Saponins.
0:17:26 > 0:17:30In return, he'll give away a 10% equity stake.
0:17:30 > 0:17:32TOUKER COUGHS
0:17:32 > 0:17:34It doesn't look like the healthy drink
0:17:34 > 0:17:36is to Touker Suleyman's palate.
0:17:36 > 0:17:38Will David's business go down any better?
0:17:43 > 0:17:47- David.- Mm.- Good pitch.
0:17:47 > 0:17:49- Thank you. - You came across very well.
0:17:49 > 0:17:54It's a very competitive market, so just tell me about your competition.
0:17:54 > 0:17:58My competition exists both on the effervescent multivitamin tablets
0:17:58 > 0:18:01- on one side, and then wheatgrass on the other.- Right.
0:18:01 > 0:18:04This product is effectively bridging the two.
0:18:04 > 0:18:06You have wheatgrass powders, which are the most popular form,
0:18:06 > 0:18:09followed by wheatgrass shots that you might find at a juice bar.
0:18:09 > 0:18:12They can be very messy, they have the bitter taste,
0:18:12 > 0:18:13they have the grit on the teeth.
0:18:13 > 0:18:16One of the big things when we were creating the product was taste.
0:18:16 > 0:18:20We did loads of consumer surveys and feedback with over 2,000 people.
0:18:20 > 0:18:21We reformulated so many times
0:18:21 > 0:18:24to make sure that that taste was what the majority wanted.
0:18:26 > 0:18:30- How is it sweetened?- Sucralose. - And what is sucralose?
0:18:30 > 0:18:33It's an artificial sweetener derived from the natural sugar sucrose.
0:18:33 > 0:18:36I knew it was artificial sweetener because I could taste it.
0:18:36 > 0:18:39I've still got it, I can still taste it in my mouth and that, for me...
0:18:39 > 0:18:43I was quite excited when you first started but I'm sitting here,
0:18:43 > 0:18:46literally going, "I don't like that aftertaste",
0:18:46 > 0:18:47cos it feels artificial.
0:18:49 > 0:18:53I must be honest. I had exactly the same reaction as Deborah's just had.
0:18:53 > 0:18:56I'm standing here wondering if there was something...
0:18:56 > 0:19:00A detergent we used in the glass, because I don't get that reaction.
0:19:00 > 0:19:04- Well, I don't get that reaction from detergents either.- OK.
0:19:04 > 0:19:08- I just get that reaction from artificial sweeteners.- OK.
0:19:08 > 0:19:11And the problem is, that would deter me from drinking it
0:19:11 > 0:19:14but it would definitely deter me from giving it to my children.
0:19:17 > 0:19:21The reason I made Nutrifiz For Kids was because I won a chance
0:19:21 > 0:19:23to pitch in front of Andy Clarke, the CEO of Asda.
0:19:23 > 0:19:25He came to me and he looked at the adult version and he said,
0:19:25 > 0:19:28"I really like it, but can you do me one for kids?"
0:19:28 > 0:19:30You don't say no to the CEO of Asda,
0:19:30 > 0:19:33so I developed Nutrifiz For Kids at their request,
0:19:33 > 0:19:36- hence they're now stocking it. - So, this is what they put in Asda?
0:19:36 > 0:19:40- You'll find that in every Asda store.- And how is it selling?
0:19:40 > 0:19:43We're averaging two or three per week per store.
0:19:43 > 0:19:46And are they keeping it in the store?
0:19:46 > 0:19:47We got confirmation two weeks ago
0:19:47 > 0:19:49that they are going to retain the listing.
0:19:49 > 0:19:52Why, if it's not really selling?
0:19:52 > 0:19:55To be fair, Sarah, most supermarkets
0:19:55 > 0:19:58will keep a range at three a store a week.
0:19:58 > 0:20:01Well, I don't know about multivits, but certainly in food.
0:20:01 > 0:20:03And also, there are plenty of other companies
0:20:03 > 0:20:06trying to get that shelf space, so if it's not selling,
0:20:06 > 0:20:08they wouldn't retain the listing.
0:20:11 > 0:20:13David defends his supermarket sales
0:20:13 > 0:20:16with a little help from Deborah Meaden.
0:20:16 > 0:20:19But news of the entrepreneur's modest retail success
0:20:19 > 0:20:24has made Nick Jenkins step into the shoes of his competition.
0:20:27 > 0:20:31What's to stop anyone else just sprinkling a bit of wheatgrass
0:20:31 > 0:20:34- into their fizzy tablet?- OK.
0:20:34 > 0:20:36Is there anything to stop them doing that?
0:20:38 > 0:20:42Um, no, there isn't... is the simple answer.
0:20:42 > 0:20:45Cos it's a food recipe, it's not something we can get a patent on,
0:20:45 > 0:20:47so it really is about building the brand.
0:20:47 > 0:20:51One thing we do have is the ownership of the formula
0:20:51 > 0:20:54and also good relationships with the manufacturers,
0:20:54 > 0:20:59who will not, obviously, produce the same formula for someone else.
0:21:00 > 0:21:03The problem is that, even if you establish
0:21:03 > 0:21:05that people actually genuinely want these fizzy things
0:21:05 > 0:21:08they're buying already but a bit of wheatgrass added into them,
0:21:08 > 0:21:13is that in a month or two's time, other people could simply do that.
0:21:13 > 0:21:15You don't have enough of a brand at the moment
0:21:15 > 0:21:17to be able to defend your position
0:21:17 > 0:21:22so, I'm afraid for that reason, I can't invest and I'm out.
0:21:26 > 0:21:29Nick Jenkins takes the fizz out of things
0:21:29 > 0:21:32with an early exit over concerns about copycats.
0:21:34 > 0:21:36And now Touker Suleyman wants to know
0:21:36 > 0:21:39what's financially fuelling the business.
0:21:40 > 0:21:43So, how much has gone into this venture so far?
0:21:43 > 0:21:46- £115,000 so far. - How much of that is your money
0:21:46 > 0:21:49and how much of that is your investors' money?
0:21:49 > 0:21:51- None of it is my money... - None of it's your money?
0:21:51 > 0:21:53None of it's my money because I started off...
0:21:53 > 0:21:56I was bankrupt from my failed previous business.
0:21:59 > 0:22:01What happened?
0:22:01 > 0:22:04I took voluntary bankruptcy because I went to university twice,
0:22:04 > 0:22:09I built up a lot of student debt and then I started up another company
0:22:09 > 0:22:13as a cofounder and I think we all realised there were many things
0:22:13 > 0:22:15that we didn't know at the time
0:22:15 > 0:22:18and we just weren't watching what we were doing
0:22:18 > 0:22:20and I ended up having to leave
0:22:20 > 0:22:22because I couldn't afford to stay in,
0:22:22 > 0:22:25and went bankrupt as a result, cos I'd put all my money into that.
0:22:30 > 0:22:34Um...I think you've taken an easy way out.
0:22:35 > 0:22:39- OK.- If you're willing to walk away from debt,
0:22:39 > 0:22:42that kind of doesn't sit well with my moral compass.
0:22:42 > 0:22:45I've been and lost everything
0:22:45 > 0:22:48and I spent the next three years of my life
0:22:48 > 0:22:52paying back every single person from a prior business
0:22:52 > 0:22:54that I owed money to, including the bank.
0:22:54 > 0:22:57I don't like the fact that you walked away from it.
0:22:59 > 0:23:02I understand your fear there. Um...
0:23:02 > 0:23:04Two things that I can say to that.
0:23:04 > 0:23:07One is, it got to a point where the stress that it was causing me
0:23:07 > 0:23:11was affecting my health and it got to a point
0:23:11 > 0:23:14where it was just consuming me. And, yes, I understand the moral issue...
0:23:14 > 0:23:17I believe everybody deserves in life a second chance, so I get that.
0:23:19 > 0:23:22But if I was to give you £75,000 today,
0:23:22 > 0:23:25how would I know you're not going to treat my money in the same light?
0:23:27 > 0:23:31Knowing what I know now, I think I would be in a position to find ways
0:23:31 > 0:23:35to be able repay it, so I wouldn't have the moral dilemma of...
0:23:35 > 0:23:37I couldn't walk away from that.
0:23:39 > 0:23:40I just couldn't.
0:23:44 > 0:23:46David's insolvency revelation
0:23:46 > 0:23:49has certainly proved a hot spot for Peter Jones.
0:23:49 > 0:23:52But has his assurance it's a one-off
0:23:52 > 0:23:55convinced Touker Suleyman he's partnership material?
0:23:57 > 0:24:01Let me ask you one simple question. You've got other shareholders.
0:24:01 > 0:24:03Why haven't they offered to invest?
0:24:03 > 0:24:07The other shareholders simply don't have the money right now
0:24:07 > 0:24:09because they're working on other projects,
0:24:09 > 0:24:12so they simply don't have the spare capital.
0:24:12 > 0:24:13And they don't have the visibility
0:24:13 > 0:24:15that the likes of yourselves might have,
0:24:15 > 0:24:17in terms of being able to pick up that phone.
0:24:17 > 0:24:20But at the end of the day, they've got more knowledge
0:24:20 > 0:24:23in the background of what's going on than we've got.
0:24:23 > 0:24:25If the business was so good, as you say,
0:24:25 > 0:24:28they would have found the money to invest.
0:24:30 > 0:24:32For that reason, I'm out.
0:24:35 > 0:24:37Touker Suleyman becomes the second Dragon
0:24:37 > 0:24:40to turn down the chance to invest.
0:24:40 > 0:24:44Is the glass any fuller for Sarah Willingham?
0:24:46 > 0:24:48I must admit, I did get excited when you came in
0:24:48 > 0:24:51and after hearing your pitch, I thought,
0:24:51 > 0:24:55"Ooh, this...I love this space."
0:24:57 > 0:24:59But it is so competitive.
0:25:00 > 0:25:03The scariest thing, for me,
0:25:03 > 0:25:05is that you are actually in lots of these places
0:25:05 > 0:25:07but your sales are still so low.
0:25:07 > 0:25:12I know what Deborah's saying, two or three a week, but the problem is,
0:25:12 > 0:25:16how does two or three a week grow without significant marketing spend?
0:25:16 > 0:25:18And that's the problem.
0:25:18 > 0:25:21I wish you all the best.
0:25:21 > 0:25:24- Good luck, but I'm afraid I'm out. - OK, thank you.
0:25:26 > 0:25:30My biggest issue is that it presents itself
0:25:30 > 0:25:33as a healthy product when it has got the artificial sweetener.
0:25:33 > 0:25:36We're told things are good for us, then they're bad for us,
0:25:36 > 0:25:38then they're good for us, then they're bad for us.
0:25:38 > 0:25:43The best way to deal with it is to not have artificial sweeteners.
0:25:43 > 0:25:46So, it's not pure enough for me and I won't be investing.
0:25:46 > 0:25:48I'm sorry, David, but I'm out.
0:25:50 > 0:25:53A failure to convince Deborah Meaden to acquire
0:25:53 > 0:25:57a taste for his product has left David almost out of investors.
0:25:57 > 0:26:02But has Peter Jones seen anything in the second-time-around entrepreneur
0:26:02 > 0:26:04that's worthy of his cash?
0:26:07 > 0:26:10I think it was really good of you to outline the story
0:26:10 > 0:26:13because a lot of people try and shy away from bankruptcy
0:26:13 > 0:26:15and I don't think anybody should.
0:26:15 > 0:26:18I do admire the fact that you've got yourself back on your feet
0:26:18 > 0:26:21and you're starting to do well and you've got a business.
0:26:21 > 0:26:23I have a feeling, though, that you're going to need
0:26:23 > 0:26:26quite a bit of money to get this business really working for you
0:26:26 > 0:26:29and off the ground and I think you're completely undercapitalised.
0:26:29 > 0:26:32I don't think £75,000 is going to be sufficient.
0:26:32 > 0:26:34I think you're going to need
0:26:34 > 0:26:36more than just supplements and nutrients
0:26:36 > 0:26:38for this business to succeed, in my opinion.
0:26:41 > 0:26:44- So, for that reason, I'm out. - Thank you.
0:26:47 > 0:26:51Well, it was a brave fight for investment but, in the end,
0:26:51 > 0:26:53David just couldn't pull it off
0:26:53 > 0:26:56and he leaves the Den no richer than when he arrived.
0:26:59 > 0:27:01- Wow.- Tough market.
0:27:01 > 0:27:05Really, really, really tough, cos the own brands win.
0:27:05 > 0:27:09So, if you want to be a brand, you've got to spend so much money.
0:27:09 > 0:27:11Yes, I'm a bit disappointed by the way things went.
0:27:11 > 0:27:12It's difficult, sometimes,
0:27:12 > 0:27:16to covey the passion that has built up over 18 months.
0:27:16 > 0:27:19It's a shame that it went that way but, you know, nothing lost.
0:27:24 > 0:27:26- Right you got this?- Yeah.
0:27:28 > 0:27:31It can seem counterintuitive to launch a business
0:27:31 > 0:27:34that half of the population will never have a use for.
0:27:34 > 0:27:37I'd like to say, "Just what I've always wanted,"
0:27:37 > 0:27:40but I'd hate anybody to think that's what they can get me for Christmas.
0:27:40 > 0:27:45But Alec Mills and Celia Pool's mail order subscription service
0:27:45 > 0:27:48was born out of a very female frustration.
0:27:48 > 0:27:51Shopping for your period sucks
0:27:51 > 0:27:53but running out of tampons sucks even more.
0:27:53 > 0:27:56When I mentioned this to my friend Alec, he said, quite rightly,
0:27:56 > 0:27:59"Why do women run this gauntlet every month?"
0:27:59 > 0:28:03- So, we created Sanitary Owl. - A period subscription service,
0:28:03 > 0:28:06delivering tampons and pads to women around the UK.
0:28:06 > 0:28:08Alec delivered an unusual reason
0:28:08 > 0:28:11why he needed a Dragon's seal of approval.
0:28:11 > 0:28:14I really want you to invest in this because my mum realised
0:28:14 > 0:28:17that the only thing worse than her son being a tampon salesman
0:28:17 > 0:28:20is her son being a failed tampon salesman.
0:28:20 > 0:28:22LAUGHTER
0:28:22 > 0:28:24Peter Jones couldn't help but ask
0:28:24 > 0:28:27about some of the duo's more alternative products.
0:28:27 > 0:28:29I'm really worried about this next question.
0:28:29 > 0:28:32You mentioned in your pitch about the fact
0:28:32 > 0:28:36that you also sell reusables. What is a reusable?
0:28:36 > 0:28:39- So, this is a cloth pad...- Right. - ..which is reusable,
0:28:39 > 0:28:43so you just...and then put it in the washing machine.
0:28:43 > 0:28:45And this is a Mooncup.
0:28:45 > 0:28:47It's a little cup that catches all the blood
0:28:47 > 0:28:50and then you empty it out into a basin or a loo.
0:28:50 > 0:28:53While Peter Jones was left speechless,
0:28:53 > 0:28:55Touker Suleyman was full of ideas
0:28:55 > 0:28:58on how the entrepreneurs could cut their costs.
0:28:58 > 0:29:00So, what if you went to the manufacturer and said,
0:29:00 > 0:29:02"We'll take all your broken packets,
0:29:02 > 0:29:05"all the ones where the boxes have crushed,"
0:29:05 > 0:29:06and you buy them at a discount.
0:29:06 > 0:29:09- Have you had that conversation with them?- No, but that's a genius idea.
0:29:09 > 0:29:13- You're hired.- A genius idea!- You are hired!- That IS a genius idea!
0:29:13 > 0:29:16- It really is.- That's for free. That's Touker time.
0:29:16 > 0:29:18Also free were Deborah Meaden's thoughts
0:29:18 > 0:29:21on whether a subscription service was absolutely necessary
0:29:21 > 0:29:23for these products.
0:29:23 > 0:29:27You say, "Run the gauntlet." I can't ever remember running the gauntlet.
0:29:27 > 0:29:30It is SO available. It's available everywhere
0:29:30 > 0:29:33and, unless you're not going to eat for a fortnight,
0:29:33 > 0:29:35you've always got an opportunity,
0:29:35 > 0:29:38while you're in the supermarket, to pick something up.
0:29:38 > 0:29:40And once she had deemed it an expendable luxury,
0:29:40 > 0:29:45it paved the way for the other Dragons to also throw in the towel.
0:29:45 > 0:29:47- I'm afraid I'm out.- OK, thank you.
0:29:47 > 0:29:48I'm out.
0:29:48 > 0:29:52The subscription model for a low-value product
0:29:52 > 0:29:56- is what holds you back, and for that reason, I'm out.- OK.
0:29:56 > 0:29:59- You can keep your boxes. - LAUGHTER
0:29:59 > 0:30:02But there was no way the male Dragons would be taking them up
0:30:02 > 0:30:05on that offer of a souvenir any time soon.
0:30:05 > 0:30:07I think you handled that very well, boys.
0:30:07 > 0:30:09- PETER:- I found that pitch quite uncomfortable.
0:30:09 > 0:30:11- What on Earth is THAT? - TOUKER LAUGHS
0:30:16 > 0:30:19Still to come on tonight's show...
0:30:19 > 0:30:21- Oh! - LAUGHTER
0:30:21 > 0:30:24Don't help him out, don't help him out!
0:30:24 > 0:30:26Valuation...
0:30:26 > 0:30:29You have a business that made £22,000 last year
0:30:29 > 0:30:33that you believe is worth 1.5 million today.
0:30:33 > 0:30:36..valuation...
0:30:36 > 0:30:39You're looking at a valuation which is 1.6 million.
0:30:39 > 0:30:41That's hardly worth the risk is it?
0:30:41 > 0:30:43..valuation.
0:30:43 > 0:30:45I just happen to be in that little sector at the moment.
0:30:45 > 0:30:48I've just got to get my head round the valuation.
0:30:52 > 0:30:55Next to face the Dragons is Paul Jobin...
0:30:58 > 0:31:01..an entrepreneur with a sentimental streak.
0:31:01 > 0:31:05I used to watch the programme when it first started, with my father.
0:31:05 > 0:31:06We used to love it, sitting there,
0:31:06 > 0:31:09talking about which was the best business that we would invest in.
0:31:09 > 0:31:11And I imagine my father sitting there
0:31:11 > 0:31:13watching it with pride on his face.
0:31:22 > 0:31:24Hello, my name's Paul Jobin.
0:31:24 > 0:31:28I'm founder and managing director of Snugs.
0:31:28 > 0:31:32We're here to raise £80,000
0:31:32 > 0:31:34for 5% of the company.
0:31:34 > 0:31:38These, according to Jonathan Margolis, tech guru,
0:31:38 > 0:31:42are probably the best consumer earphones in the world.
0:31:43 > 0:31:47Snugs are like little Savile Row suits for your ears.
0:31:48 > 0:31:50They've been made just for you.
0:31:50 > 0:31:52They're made of soft silicone.
0:31:54 > 0:31:58They never fall out, no matter how active you are,
0:31:58 > 0:32:01because they're perfectly made to fit your ear,
0:32:01 > 0:32:06in the same way that a handmade suit or handmade shoes are a perfect fit.
0:32:06 > 0:32:07The beauty being,
0:32:07 > 0:32:12is that this perfect fit allows the sound quality to be vastly improved.
0:32:12 > 0:32:14Rock stars have been wearing
0:32:14 > 0:32:16custom-fitted ear monitors for years.
0:32:16 > 0:32:18To get that perfect fit,
0:32:18 > 0:32:20we do a 3D scan of your ear
0:32:20 > 0:32:23and produce a 3D image of your inner ear,
0:32:23 > 0:32:27which we then upload to our industrial grade printer,
0:32:27 > 0:32:31who produces a custom-made product just for you.
0:32:31 > 0:32:34We're here, looking to raise money from yourselves.
0:32:34 > 0:32:36Part of that investment would be used
0:32:36 > 0:32:38to purchase more of these scanners
0:32:38 > 0:32:42to allow us to roll out, from our current base in London, nationwide.
0:32:42 > 0:32:47Our award-winning earphones currently sell for £199.
0:32:47 > 0:32:49If you've got your own earphones,
0:32:49 > 0:32:53then you can just buy the tips from us, and that's £139.
0:32:55 > 0:32:57I'd like to invite you to come and join Snugs.
0:32:57 > 0:33:00Thank you very much indeed.
0:33:02 > 0:33:07Hoping to roll out his bespoke earphone range is Paul Jobin.
0:33:08 > 0:33:12Obviously, this product won't fit you but it gives you an example
0:33:12 > 0:33:14of how the product is presented.
0:33:14 > 0:33:19He thinks £80,000 should help his plans to expand nationwide
0:33:19 > 0:33:23and, in return, he's offering 5% of his company.
0:33:23 > 0:33:26E-commerce mogul Nick Jenkins is first
0:33:26 > 0:33:28to get the measure of the product.
0:33:28 > 0:33:30How long does the process take?
0:33:30 > 0:33:33The scanning process takes between 10 to 15 minutes,
0:33:33 > 0:33:35with these first-generation scanners.
0:33:35 > 0:33:38So, you would go into a shop... Where would you go for this?
0:33:38 > 0:33:41We have scanners located in London retail outlets.
0:33:41 > 0:33:43Currently we've only got two scanners
0:33:43 > 0:33:45and I'm looking to be able to put more scanners
0:33:45 > 0:33:47in London, so we can cover better areas.
0:33:47 > 0:33:50At the moment, it's difficult to cover the City
0:33:50 > 0:33:51and Mayfair and the West End.
0:33:51 > 0:33:55Sorry, can you just point, where's the scanner? That's the scanner.
0:33:55 > 0:33:58This is a state-of-the-art 3D scanner. This is first-generation...
0:33:58 > 0:33:59You actually put that in the ear?
0:33:59 > 0:34:04- Put that in the ear, creates a full 3D image of the ear.- OK.
0:34:04 > 0:34:06I can certainly see how people who want
0:34:06 > 0:34:09- a high-end product would go for this.- Yep.
0:34:09 > 0:34:11How much do they cost, those scanners?
0:34:11 > 0:34:15This is a first-generation... These are 10,000, these scanners.
0:34:18 > 0:34:21News of the scanners' price tag
0:34:21 > 0:34:24has stopped Touker Suleyman in his tracks.
0:34:24 > 0:34:27And Sarah Willingham wants to probe
0:34:27 > 0:34:30what effect that cost will have on Paul's profits.
0:34:34 > 0:34:40You're going to need to sell... 300, 400 of these
0:34:40 > 0:34:42before you're even getting to the point
0:34:42 > 0:34:45- where you will cover the cost of purchasing the scanner.- Yep.
0:34:45 > 0:34:48That many people are not going to walk through that door
0:34:48 > 0:34:52and buy this product, therefore there is no roll-out model.
0:34:55 > 0:34:57It has been expensive getting to this point
0:34:57 > 0:35:00and we actually get internet orders
0:35:00 > 0:35:02all over the world at the moment for our product.
0:35:02 > 0:35:04How are you getting internet orders for the products?
0:35:04 > 0:35:07People come onto us and buy the product from us
0:35:07 > 0:35:10and we then get their impression done for them.
0:35:10 > 0:35:13If they live in London, we send them to a scanner.
0:35:13 > 0:35:16If they don't live in London, they live somewhere else,
0:35:16 > 0:35:18we send them to a local audiologist
0:35:18 > 0:35:22who makes a physical impression for us and that's how we move forward.
0:35:25 > 0:35:28If I place an order with you online, and I get an email back, saying,
0:35:28 > 0:35:31"Can you please go and visit your local ear doctor at some point",
0:35:31 > 0:35:33and it's going to take me ages to get an appointment,
0:35:33 > 0:35:36I mean, it's never going to happen.
0:35:36 > 0:35:38But, forgive me, you go and click and collect,
0:35:38 > 0:35:41you go into the shop to go and buy your shoes.
0:35:41 > 0:35:43If it's something that you particularly want,
0:35:43 > 0:35:46then maybe you might make that commitment.
0:35:50 > 0:35:53Paul's convinced his product has enough appeal
0:35:53 > 0:35:55to make the service cost effective.
0:35:55 > 0:36:00And it's a business model Peter Jones thinks he's seen before.
0:36:02 > 0:36:06- It's a bit like the photo booth in the early days.- Yep.
0:36:06 > 0:36:08The photo booth, when it was first put into...
0:36:08 > 0:36:10- The Woolies photo booth...- Yep.
0:36:10 > 0:36:14- It was like five years' payback, cos it was thousands of pounds.- Yep.
0:36:14 > 0:36:16And sometimes, it was just left empty,
0:36:16 > 0:36:20and then it started to get adopted, adopted, and then, all of a sudden,
0:36:20 > 0:36:22- the cost of the photo booth reduced...- Absolutely.
0:36:22 > 0:36:24..and then we had a 99p passport photo,
0:36:24 > 0:36:27- cos that was what really made it happen.- Yep.
0:36:27 > 0:36:30So, I think that you have come up with something
0:36:30 > 0:36:32that you will see in the open market.
0:36:35 > 0:36:37So, I'm not going to criticise what you've done
0:36:37 > 0:36:39because...I like it a lot.
0:36:42 > 0:36:48Tech tycoon Peter Jones predicts a bright future for Snugs.
0:36:48 > 0:36:52But Nick Jenkins wants to know if Paul's got the figures to match.
0:36:52 > 0:36:54So, tell me, numberswise,
0:36:54 > 0:36:56what does it look like over the next three years?
0:36:56 > 0:36:58Personally, from our own company,
0:36:58 > 0:37:00we're looking at doing £300,000 this year,
0:37:00 > 0:37:04£800,000 next year and, in the third year,
0:37:04 > 0:37:07we are optimistically looking at just over £2 million.
0:37:07 > 0:37:10Tell me what that looks like in terms of the P&L.
0:37:12 > 0:37:17Probably, net, I think maybe we should go maybe 10%, if we're lucky.
0:37:20 > 0:37:22Not terribly exciting, is it?
0:37:24 > 0:37:25It's not terribly exciting.
0:37:25 > 0:37:28Forgive me, what we're trying to do is prove a market point,
0:37:28 > 0:37:32- here in London.- But you're looking at a valuation which is 1.6 million.
0:37:32 > 0:37:36- Yep.- And then you're saying, at the end of three years, whoopy-do,
0:37:36 > 0:37:39we're making £200,000, which would make the business worth...
0:37:40 > 0:37:41£2 million?
0:37:43 > 0:37:45I mean, that's hardly worth the risk, is it?
0:37:47 > 0:37:51Nick Jenkins' feelings about the earphones' financial projections
0:37:51 > 0:37:53come through loud and clear.
0:37:53 > 0:37:56And those numbers don't appear
0:37:56 > 0:37:58to have impressed Deborah Meaden either.
0:38:00 > 0:38:02I instinctively know you're good at business,
0:38:02 > 0:38:05but that's taken my gut instinct to believe that,
0:38:05 > 0:38:09because you haven't really been able to financially demonstrate
0:38:09 > 0:38:11this is what is what's it's going to cost us
0:38:11 > 0:38:14to get there and this is our most likely path.
0:38:15 > 0:38:17But I think the single biggest thing
0:38:17 > 0:38:21- is you're going to need an awful lot more money.- Yep.
0:38:21 > 0:38:25Oh, absolutely. I couldn't agree more.
0:38:25 > 0:38:29And that shape of the investment doesn't look right for me.
0:38:30 > 0:38:33So, I won't be investing. I'm out.
0:38:35 > 0:38:37A first out for Paul,
0:38:37 > 0:38:40as Deborah Meaden sees huge spending on the horizon.
0:38:42 > 0:38:45Will fashion magnate Touker Suleyman find a fit
0:38:45 > 0:38:47for Paul's business proposition?
0:38:50 > 0:38:55You haven't convinced me that, apart from you have a good idea,
0:38:55 > 0:38:58that you have a business that is sustainable.
0:38:58 > 0:39:02Cos, at any given point, unless the technology changes,
0:39:02 > 0:39:07that you can measure somebody's ear online and you can convert that
0:39:07 > 0:39:11into a sale instantly, you're not going to do it.
0:39:11 > 0:39:13And for that reason, I'm out.
0:39:17 > 0:39:19You do have a product that people will want.
0:39:19 > 0:39:22The question is, is can you get it to them?
0:39:22 > 0:39:25Will you lose a lot of people along the way cos it's not accessible?
0:39:25 > 0:39:29And can you make it for them at a price which makes it interesting
0:39:29 > 0:39:31to you and also interesting to them as a consumer?
0:39:33 > 0:39:36And I don't think that, yet, is proven.
0:39:37 > 0:39:42I just think you're too early for me to invest, so I'm afraid I'm out.
0:39:46 > 0:39:49It's a lovely product but, in the long term,
0:39:49 > 0:39:52I just worry about how defensible it is
0:39:52 > 0:39:56and that, unfortunately, is the reason that I can't invest.
0:39:58 > 0:40:00So, unfortunately, I'm out.
0:40:01 > 0:40:06It's down to the wire for Paul, as a fourth Dragon declares himself out.
0:40:07 > 0:40:11But Peter Jones was a big fan of the product earlier.
0:40:11 > 0:40:14Will his enthusiasm convert to investment?
0:40:14 > 0:40:17Firstly, I really like it.
0:40:19 > 0:40:21The quality of what you've put together
0:40:21 > 0:40:24and how you've done it is first-class.
0:40:24 > 0:40:27- Thank you.- It's as good as I've seen.- Thank you very much indeed.
0:40:29 > 0:40:33And I like what you've done and I like how you've put it together.
0:40:34 > 0:40:35But...
0:40:37 > 0:40:39I don't like the business model at the moment
0:40:39 > 0:40:42and I think you're almost ahead of yourself.
0:40:46 > 0:40:49The capital requirement for this business is substantial
0:40:49 > 0:40:51and that's the reason why I'm going to say
0:40:51 > 0:40:53I'm not going to invest and say I'm out.
0:40:53 > 0:40:56But I hope I see Snugs on the high street cos I'm a buyer.
0:40:56 > 0:40:58I hope you do too. Thank you very much indeed.
0:41:00 > 0:41:03So, that's the end of the line for Paul,
0:41:03 > 0:41:07as praise for his product fails to translate to cash.
0:41:07 > 0:41:10At the end of the day, they didn't want to invest in our business.
0:41:10 > 0:41:13That's not going to stop me for one second.
0:41:13 > 0:41:17Other people share my vision and can see the opportunity
0:41:17 > 0:41:21and like a little bit of risk in life, so it's not for everybody.
0:41:27 > 0:41:30Our final business into the Den is the brainchild
0:41:30 > 0:41:33of husband and wife team Sinead and Adam Murphy.
0:41:33 > 0:41:38They've ploughed their hearts and souls into setting up their company,
0:41:38 > 0:41:40but will it pay off with our investors?
0:41:45 > 0:41:48Hopefully, we will come across well to the Dragons.
0:41:48 > 0:41:52It's difficult to know if they're going to like us or loathe us.
0:41:55 > 0:41:59So, fingers crossed, yeah, they'll like us.
0:41:59 > 0:42:00(Good luck.)
0:42:00 > 0:42:02(Good luck.)
0:42:12 > 0:42:16Hello, Dragons. My name is Sinead, this is my husband, Adam.
0:42:16 > 0:42:18We are parents to three young children
0:42:18 > 0:42:21and cofounders of a company called Shnuggle.
0:42:21 > 0:42:24We design clever baby products for modern parents.
0:42:24 > 0:42:29We're here today to ask for your investment of £75,000
0:42:29 > 0:42:33in return for a 5% stake of our exciting and growing business.
0:42:34 > 0:42:37When our first little girl was born, she was quite a sick baby.
0:42:37 > 0:42:40As new parents, this really focussed our attention
0:42:40 > 0:42:42on the products that were available in the market
0:42:42 > 0:42:44and the gaps and room for improvement.
0:42:44 > 0:42:48Our first product idea was the modern Moses basket,
0:42:48 > 0:42:49a very popular product,
0:42:49 > 0:42:53but hadn't been given any attention for a long time.
0:42:53 > 0:42:56It's made from plastic, so it's wickerless.
0:42:56 > 0:42:57It's hypoallergenic,
0:42:57 > 0:43:01easy to clean and a lot stronger than traditional baskets.
0:43:01 > 0:43:05Our next product was the Shnuggle bath. The Shnuggle bath is clever.
0:43:05 > 0:43:08It's got a bum bump in the bottom that stops the baby sliding under,
0:43:08 > 0:43:11the large foam backrest and it really makes it much easier
0:43:11 > 0:43:12for parents to wash the baby.
0:43:12 > 0:43:15In just 12 months, the bath's sold over...
0:43:15 > 0:43:18Excuse me. ..45,000 units worldwide.
0:43:18 > 0:43:21Last year, our revenue was over £600,000,
0:43:21 > 0:43:23with a gross profit of 200,
0:43:23 > 0:43:26and our three-year forecast is 1.2 this year,
0:43:26 > 0:43:292 next year and 3.3 million the following year.
0:43:30 > 0:43:34At the moment, we sell across the UK and Ireland,
0:43:34 > 0:43:38with key accounts, such as Amazon, John Lewis and The White Company.
0:43:38 > 0:43:43We have just been signed up as suppliers to Mothercare and Tesco's.
0:43:43 > 0:43:46Thank you so much for your time and we welcome your questions.
0:43:49 > 0:43:54Sinead and Adam Murphy from County Down are here to raise £75,000.
0:43:54 > 0:43:57In return, they'll give away just 5% of their company.
0:43:57 > 0:44:01- Can we have a look at it?- Of course you can.- Please do, absolutely.
0:44:02 > 0:44:06So, one of the unique selling points is that...
0:44:06 > 0:44:09- LOUD CRACK - Oh, he's going to break it!- Ooh!
0:44:10 > 0:44:14- Sorry, guys.- We do test them for the weight of the baby but, yeah...
0:44:14 > 0:44:17- PETER:- Has it been tested for a Touker baby?
0:44:17 > 0:44:19Don't help him out, don't help him out! This is...
0:44:19 > 0:44:22- LAUGHTER - Wow!
0:44:23 > 0:44:25- He's done it, he's done it. - He's done it.
0:44:27 > 0:44:30Touker Suleyman's unconventional product road test
0:44:30 > 0:44:34has left the entrepreneurs with a patch-up job.
0:44:34 > 0:44:38But Peter Jones has a problem he's not sure is quite so rectifiable.
0:44:41 > 0:44:46- So, Adam, Sinead.- Yes.- Have you gone out on a limb with the valuation?
0:44:49 > 0:44:51- We don't think we have.- No.
0:44:53 > 0:44:56Because you've come in and you've clearly valued your business
0:44:56 > 0:44:58- at £1.5 million...- Yep.
0:44:59 > 0:45:02..the traffic light and the alarm's going off in my head
0:45:02 > 0:45:07and I'm pretty sure you said that you had only turned over £600,000
0:45:07 > 0:45:11last year, making a gross margin of 200.
0:45:11 > 0:45:13- That's correct, yes. - What was your net profit?
0:45:13 > 0:45:16Net profit was £22,000.
0:45:16 > 0:45:21So, you have a business that made £22,000 last year
0:45:21 > 0:45:24that you believe is worth 1.5 million today.
0:45:28 > 0:45:30And our forecast this year,
0:45:30 > 0:45:32that we're already starting to work towards
0:45:32 > 0:45:36is 1.2 million and we should have a net profit of £120,000 this year.
0:45:36 > 0:45:38What's your run rate in the last quarter?
0:45:38 > 0:45:41I would say it's in the region of 350, maybe,
0:45:41 > 0:45:43in the last three months.
0:45:43 > 0:45:46- And what profit has that brought into the business?- 3.5%.
0:45:48 > 0:45:50So, you've made £9,000 in the last quarter.
0:45:50 > 0:45:54- Correct, yeah.- So, you're not on the run rate of 120 yet then?
0:45:55 > 0:45:59No, the way that we've built that forecast is the new products
0:45:59 > 0:46:00which are coming in very soon.
0:46:03 > 0:46:07Right. I'm struggling to get past, in fact,
0:46:07 > 0:46:11getting to the point where I get annoyed about this valuation.
0:46:14 > 0:46:17Because your business is very clearly, at this stage,
0:46:17 > 0:46:21not worth the money that you're suggesting, and every time I think,
0:46:21 > 0:46:23"Well, actually, I can change that," but I can't really,
0:46:23 > 0:46:26cos you've come in with the most ludicrous,
0:46:26 > 0:46:28ridiculous, stupid valuation.
0:46:30 > 0:46:32Peter Jones is not impressed
0:46:32 > 0:46:37with the entrepreneurs' financial appraisal of their business.
0:46:37 > 0:46:40Now Nick Jenkins wants to know if Sinead and Adam
0:46:40 > 0:46:43have the credentials to back up that price tag.
0:46:45 > 0:46:49I wouldn't have a problem so much with that if one of you had said,
0:46:49 > 0:46:52for example, "I spent 20 years in Mothercare.
0:46:52 > 0:46:54"I was commercial director, I know what this market is."
0:46:54 > 0:46:57I'd think, "What are the elements that are going to make this work?"
0:46:57 > 0:46:59But it's your chance of getting there...
0:46:59 > 0:47:01Maybe we should tell you a little bit more
0:47:01 > 0:47:04about some of the other things that are giving us our confidence.
0:47:04 > 0:47:05Yeah, yeah.
0:47:05 > 0:47:07Um, in terms of the US market,
0:47:07 > 0:47:10we are just about to become suppliers
0:47:10 > 0:47:12with buybuy BABY and Babies R Us.
0:47:12 > 0:47:18We have also produced the bath in a white label for Dorel,
0:47:18 > 0:47:22which are one of the largest baby brands in the world,
0:47:22 > 0:47:23just for Brazil.
0:47:23 > 0:47:27The first big distributor that we've worked with is in China
0:47:27 > 0:47:29and now they're looking at taking
0:47:29 > 0:47:32a sort of 40-foot container from us every month.
0:47:32 > 0:47:34Not bad going.
0:47:34 > 0:47:36Really is not bad going at all.
0:47:38 > 0:47:41A timely revelation of some potentially lucrative
0:47:41 > 0:47:47international business deals silence a sceptical Nick Jenkins.
0:47:47 > 0:47:50Will global business giant Touker Suleyman
0:47:50 > 0:47:54give Shnuggles' export plans his seal of approval?
0:47:56 > 0:47:58I think you've done great
0:47:58 > 0:48:01because you've looked at the international market.
0:48:01 > 0:48:05- There are 800, 900,000 babies a year in the UK?- Yep.
0:48:05 > 0:48:08- Roughly. There are a lot more in China.- Yep.
0:48:08 > 0:48:10A lot more in the States.
0:48:10 > 0:48:12I've just come back from the States and it's a massive market
0:48:12 > 0:48:16- and the fact that you are thinking international...- Yeah.
0:48:16 > 0:48:19..makes the proposition a lot, I think, more viable.
0:48:22 > 0:48:25I just happen to be in that little sector at the moment.
0:48:28 > 0:48:30Er, I've just got to get my head round the valuation.
0:48:35 > 0:48:38Touker Suleyman hints at investment
0:48:38 > 0:48:42but isn't yet showing Sinead and Adam the colour of his money.
0:48:42 > 0:48:46As he continues to weigh up the investment proposition,
0:48:46 > 0:48:49millionaire mum of four, Sarah Willingham,
0:48:49 > 0:48:51is weighing up their USP.
0:48:53 > 0:48:57There are so many products out there, there really are.
0:48:57 > 0:49:00And, to be honest, they all do the same thing.
0:49:03 > 0:49:05The question is, is can you develop a brand?
0:49:05 > 0:49:09And that's very expensive and really hard work
0:49:09 > 0:49:13and I think that's going to take a lot more than 75 grand.
0:49:15 > 0:49:18What we're finding, which has helped,
0:49:18 > 0:49:22is people are kind of getting on board with the story of us
0:49:22 > 0:49:23and how we started the company
0:49:23 > 0:49:26and the fact that we have our own children
0:49:26 > 0:49:28and that's inspired the design of the products.
0:49:28 > 0:49:31- PETER:- Why is it such a unique story? Sorry, I'm missing this.
0:49:31 > 0:49:34- I'm missing that as well. - Why is this a unique story?
0:49:34 > 0:49:37Well, it's not necessarily a unique story,
0:49:37 > 0:49:40but we've found that a lot of the customers who are buying from us,
0:49:40 > 0:49:42they just love what Shnuggle is about.
0:49:42 > 0:49:44They love the fact that somebody
0:49:44 > 0:49:48- that's already had a child invented it?- Yes, and they...- But...
0:49:51 > 0:49:53That's the bit... I don't know. We're both struggling with that one.
0:49:53 > 0:49:55- Yeah.- You're not unique in that.
0:49:55 > 0:49:58Honestly, I was out there in the street the other day.
0:49:58 > 0:50:02There were LOADS of children out there. You are NOT the only people.
0:50:05 > 0:50:09It doesn't look like Peter Jones or Nick Jenkins
0:50:09 > 0:50:12are buying parenthood as a USP.
0:50:12 > 0:50:14And now Deborah Meaden thinks
0:50:14 > 0:50:17the fledgling entrepreneurs have made a schoolboy error.
0:50:18 > 0:50:21I don't think your branding's strong at all.
0:50:22 > 0:50:26If you look at that, I think you've got three brands on there.
0:50:26 > 0:50:29- You've got Dreami, you've got BumGo and you've got Pebbly.- Yeah.
0:50:29 > 0:50:33- What you haven't got is Shnuggle. - Yeah.
0:50:34 > 0:50:37- I'd think that was a Dreami. - SARAH:- That is so true.
0:50:37 > 0:50:40I would have no idea that was a Shnuggle.
0:50:41 > 0:50:44Um, do you know what my overriding thing is,
0:50:44 > 0:50:48and it's a personal thing? It's... I don't even have children.
0:50:48 > 0:50:51- I have to feel something, you know.- Sure.
0:50:51 > 0:50:54- And I just think, "Of course I could do it as a job".- Yeah.
0:50:54 > 0:50:57- But I don't feel it.- OK. - Because it's just not...
0:50:58 > 0:51:02So, you know, for totally personal reasons,
0:51:02 > 0:51:04I'm really sorry, but I won't be investing.
0:51:04 > 0:51:06- Thank you.- Thank you.
0:51:08 > 0:51:12Deborah Meaden struggles to bond with Shnuggle,
0:51:12 > 0:51:14becoming the first Dragon to go out.
0:51:14 > 0:51:18Could Sarah Willingham be feeling a little more positive?
0:51:22 > 0:51:25What you've produced is aesthetically really pleasing.
0:51:25 > 0:51:28It's a nice product and I like the idea of the Moses basket.
0:51:28 > 0:51:30I think it's good.
0:51:30 > 0:51:34But you can't patent a plastic Moses basket.
0:51:38 > 0:51:42And if you go out there and you effectively educate people
0:51:42 > 0:51:45that a plastic Moses basket is the way forward
0:51:45 > 0:51:50- cos wicker can be really difficult to clean...certain things...- Yes.
0:51:50 > 0:51:55Um, how easy is it going to be for somebody else to come out with that?
0:51:55 > 0:51:57So, you've got to be there with your brand,
0:51:57 > 0:52:00and that's where I think you're going to struggle.
0:52:00 > 0:52:02So, I'm going to say I'm not going to invest,
0:52:02 > 0:52:05- so I'm really sorry, but I'm out. - Thank you.- Thank you.
0:52:08 > 0:52:09I think you've done a cracking job
0:52:09 > 0:52:12of getting the business to where it is today.
0:52:12 > 0:52:14My concern is about the probability
0:52:14 > 0:52:17of getting to this position of selling 3,000,000 a year.
0:52:18 > 0:52:22You may well, but the probability of you getting to that 3,000,000
0:52:22 > 0:52:25isn't enough to take me over the line at this valuation.
0:52:25 > 0:52:28- But I really do hope you get there. - Thank you.- I'm afraid I'm out.
0:52:28 > 0:52:30Appreciate that, thank you.
0:52:30 > 0:52:35Nick Jenkins decides the investment isn't a safe enough bet for him.
0:52:36 > 0:52:39Has Peter Jones heard anything to persuade him
0:52:39 > 0:52:43the business is worthy of that seven-figure price tag?
0:52:44 > 0:52:46I'm still miffed. Um...
0:52:46 > 0:52:51I don't think that you will get an investment from anybody
0:52:51 > 0:52:54at £1.5 million for your business.
0:52:58 > 0:53:00But you have done a great job to launch a company
0:53:00 > 0:53:03and it's wonderful to see.
0:53:03 > 0:53:06But you leave me no room, because there's no question,
0:53:06 > 0:53:08even if I was really interested...
0:53:09 > 0:53:13I... You're not going to give the equity away. I know that already.
0:53:15 > 0:53:18On that basis, I can't invest, so I'm out.
0:53:20 > 0:53:21- OK, thank you.- Thank you, Peter.
0:53:24 > 0:53:30That valuation takes Peter Jones out of the investment equation.
0:53:30 > 0:53:33But will the Dragon that broke the product earlier
0:53:33 > 0:53:35be prepared to broker a deal now?
0:53:38 > 0:53:42Look, I think... I like the product, I like what you've done.
0:53:43 > 0:53:46And I like the fact that you're taking a traditional product
0:53:46 > 0:53:50- and you're modernising it. - Yeah.- Yeah.
0:53:52 > 0:53:54And I think I can add a lot of value to this.
0:54:01 > 0:54:03I'm going to make you an offer.
0:54:09 > 0:54:11Your valuation's out.
0:54:13 > 0:54:15You want £75,000 for 5%.
0:54:18 > 0:54:20Well, I'm going to give you £100,000.
0:54:22 > 0:54:23OK.
0:54:23 > 0:54:25But I want 30% of the business.
0:54:29 > 0:54:32Cos I believe that I can take you to a next level a lot quicker,
0:54:32 > 0:54:34- especially in America.- Mm-hmm.
0:54:34 > 0:54:37- So, I'll give you more than you're asking for...- Sure.
0:54:37 > 0:54:39..cos I think you're going to need it.
0:54:39 > 0:54:44And when I get my money back, I will give back 15%.
0:54:47 > 0:54:49- So...- Could we have a little chat?
0:54:53 > 0:54:55- Sure.- Thank you.
0:54:56 > 0:55:00Touker Suleyman is offering £25,000 more cash
0:55:00 > 0:55:03than the 75 the entrepreneurs were hoping for.
0:55:03 > 0:55:08But in exchange, he's asking for 30% of the equity -
0:55:08 > 0:55:11way above the 5% they were looking to give away -
0:55:11 > 0:55:14and slashing the valuation of their business
0:55:14 > 0:55:19from £1.5 million to £330,000.
0:55:24 > 0:55:28Firstly, thank you very much for the offer, but we can't go that high.
0:55:28 > 0:55:33We have a counter, which is we will give up 15%
0:55:33 > 0:55:37and then if we hit the targets in the coming year that we said,
0:55:37 > 0:55:40the £1.2 million, we'd like to buy back 5%,
0:55:40 > 0:55:43which would leave you with 10%. Is that something that would work?
0:55:49 > 0:55:52- Well...- We would love to have you on board, we really would.- Yeah.
0:55:56 > 0:55:58I'd reduce down to 25%
0:55:58 > 0:56:00and then, when I get my money back, down to 15%.
0:56:00 > 0:56:06- Because then it gives me enough to focus on to make it happen.- Mm-hmm.
0:56:06 > 0:56:08Um, and I think I'm giving you
0:56:08 > 0:56:11- more money than you're asking for. - Mm-hmm.
0:56:16 > 0:56:18I am... I'm happy.
0:56:21 > 0:56:25- Yeah, me too.- Mm-hmm. - We'd be happy to do that.- Great!
0:56:25 > 0:56:28- SARAH:- Fantastic, well done. Congratulations.- Thank you.
0:56:28 > 0:56:32- Well done.- Thank you.- I'm looking forward to it.- Thank you.
0:56:32 > 0:56:34- You're not allowed to get into any more Moses baskets.- No.
0:56:34 > 0:56:36- Please don't.- Don't break any more.
0:56:36 > 0:56:39- I think in the US, this will go down fantastically.- Yeah, great.- Yeah.
0:56:39 > 0:56:41Well, that's the way to do it.
0:56:41 > 0:56:45Sinead and Adam may well have given away more equity than they'd hoped,
0:56:45 > 0:56:50but they now have £25,000 more cash than they came in for
0:56:50 > 0:56:53and a successfully negotiated ratchet agreement
0:56:53 > 0:56:55with a global tycoon.
0:56:55 > 0:56:57Touker, you could end up now, after that demonstration,
0:56:57 > 0:57:01- with a new nickname. The Baby Dragon.- The Baby Dragon.
0:57:01 > 0:57:03- Well done.- Thank you.
0:57:03 > 0:57:05- SARAH:- That was really great, well done.
0:57:05 > 0:57:07- He broke our basket.- I know.
0:57:07 > 0:57:12I don't think that working with Touker is ever going to be dull.
0:57:12 > 0:57:14LOUD CRACK
0:57:14 > 0:57:17- Ooh! - LAUGHTER
0:57:17 > 0:57:20I have no idea what to expect
0:57:20 > 0:57:23from our future meetings with him, but I can't wait.
0:57:35 > 0:57:38Over the years, the Dragons have physically broken
0:57:38 > 0:57:40quite a few products in the Den,
0:57:40 > 0:57:42usually in the course of appraising their robustness,
0:57:42 > 0:57:46rather than applying a Touker-style stress test.
0:57:46 > 0:57:50But, as the old china shop adage goes, if you break it, you buy it,
0:57:50 > 0:57:54and Touker Suleyman certainly took that to heart tonight.
0:57:54 > 0:57:56Coming up next time...
0:57:58 > 0:58:00- Whoa!- It's quite good, isn't it?
0:58:00 > 0:58:03You haven't got a very unique product,
0:58:03 > 0:58:05so I think you're vulnerable.
0:58:05 > 0:58:08This is like a fundamental part of the business.
0:58:08 > 0:58:10What does the product cost to make?
0:58:10 > 0:58:13You are probably one of the most appealing individuals
0:58:13 > 0:58:16to invest in that I've seen in the Den for a long time.
0:58:16 > 0:58:20- I'll make you an offer. - I'd like to make you an offer.
0:58:20 > 0:58:22I'd also like to invest.
0:58:22 > 0:58:25So, I'm going to make you an offer and I'm going to match these guys.
0:58:25 > 0:58:27I'm going to make it really hard for you.
0:58:27 > 0:58:30I'm not even going to waste my breath or my time. I'm out.