0:00:02 > 0:00:04Tonight on Dragons' Den...
0:00:09 > 0:00:11- Whoa!- Quite good, isn't it?
0:00:12 > 0:00:15You haven't got a very unique product.
0:00:15 > 0:00:18So I think you're vulnerable.
0:00:18 > 0:00:19I'd like to make you an offer.
0:00:19 > 0:00:24I'd also like to work with you and I'd also like to invest.
0:00:24 > 0:00:26This is like a fundamental part of the business.
0:00:26 > 0:00:28What does the product cost to make?
0:00:29 > 0:00:31I'll make you an offer.
0:00:31 > 0:00:35So I'm going to make you an offer. And I'm going to match these guys.
0:00:35 > 0:00:37I'm going to make it really hard for you.
0:00:37 > 0:00:39I'm not even going to waste my breath or my time.
0:00:39 > 0:00:41I'm out.
0:01:13 > 0:01:15Welcome to Dragons' Den,
0:01:15 > 0:01:18a place of aspiration and perspiration,
0:01:18 > 0:01:21where entrepreneurs with big business dreams
0:01:21 > 0:01:25meet our wealthy investors, who have big cash to invest.
0:01:29 > 0:01:32Our first entrepreneur into the Den is the self-assured
0:01:32 > 0:01:34Steven Reynolds.
0:01:35 > 0:01:37I'm excited. I'm quite happy
0:01:37 > 0:01:41with the information that I have and the position that the business is in.
0:01:41 > 0:01:44So I'm feeling quite confident.
0:01:44 > 0:01:46And there's one Dragon he's got his eye on.
0:01:48 > 0:01:52Of course, I do quite like Peter because he's been the longest-serving Dragon and
0:01:52 > 0:01:55he's made some good investments in the past.
0:01:55 > 0:01:57But he's also missed a few opportunities, as well.
0:01:57 > 0:01:59Hopefully, this won't be one he passes up on.
0:02:09 > 0:02:14My name is Steven Reynolds and I'm the managing director of Micro Fitness.
0:02:14 > 0:02:18Today, I'm looking for £100,000 for 15% equity.
0:02:18 > 0:02:24It can be argued that the best businesses are those that benefit society.
0:02:24 > 0:02:28Perhaps when they can tackle a £15.8 billion problem in the UK,
0:02:28 > 0:02:32or one that costs the NHS 4.2 billion each year.
0:02:32 > 0:02:34The problem is obesity.
0:02:34 > 0:02:36Particularly childhood obesity.
0:02:36 > 0:02:40Yet we have no single market leader in this industry.
0:02:40 > 0:02:46Micro Fitness is a multi-award-winning fitness company for children.
0:02:46 > 0:02:51We deliver 21 different fitness experiences designed for ages three plus.
0:02:51 > 0:02:55And offer our services to over 400 schools, organisations,
0:02:55 > 0:02:58special needs groups and councils across Scotland.
0:02:58 > 0:03:01Ultimately seeking to become the world's leading fitness company for
0:03:01 > 0:03:05children. Some of these experiences include the mobile gym,
0:03:05 > 0:03:09scooter fitness and zorbing, as well as more traditional ones like yoga,
0:03:09 > 0:03:11Zumba and martial arts.
0:03:11 > 0:03:15This year, we have enjoyed exceptional growth across a number of markets.
0:03:15 > 0:03:19Just now, we're on track for over 200,000 of sales, and one market in
0:03:19 > 0:03:23particular that's rapidly growing are our council contracts,
0:03:23 > 0:03:27where they bring us into their sports centres to organise events on
0:03:27 > 0:03:29a regular basis. In this market alone,
0:03:29 > 0:03:33we anticipate sales growing exponentially in the next 12 months and we
0:03:33 > 0:03:36need your investment today in order to manage this.
0:03:36 > 0:03:39Your investment will go towards four key areas.
0:03:39 > 0:03:42The first is for a second office based in Manchester,
0:03:42 > 0:03:44to establish a foothold in England.
0:03:44 > 0:03:46The second is more vans and equipment.
0:03:46 > 0:03:49The third, the staff, and the fourth is advertising and marketing.
0:03:49 > 0:03:53So, if you're looking for a low-risk investment that tackles one of the
0:03:53 > 0:03:56most major health epidemics of our time,
0:03:56 > 0:03:58then I would love to welcome you onboard.
0:03:58 > 0:04:01Thanks for listening, I would like to invite anyone up to either try
0:04:01 > 0:04:03our zorbing or archery.
0:04:03 > 0:04:06- Absolutely.- Can we get Touker in the zorb?- No, I want to get in the zorb.
0:04:06 > 0:04:10Hoping to persuade the Dragons to exercise their financial muscle...
0:04:10 > 0:04:12Deborah, Sarah, some archery perhaps?
0:04:12 > 0:04:14Oh, yeah, actually. I've never done archery.
0:04:14 > 0:04:17..is Steven Reynolds from Sterling.
0:04:17 > 0:04:20This is your chance to shoot Peter without any explanation.
0:04:20 > 0:04:25He's asking for £100,000 in return for a 15% stake...
0:04:28 > 0:04:31..in his kid-friendly mobile-fitness company.
0:04:32 > 0:04:33Boys, don't break Nick.
0:04:33 > 0:04:35Do not break Nick.
0:04:37 > 0:04:38What's happened here?
0:04:40 > 0:04:43You all right there, Nick? That's like an anti-birthing chamber.
0:04:43 > 0:04:46- I've been reborn! - DEBORAH LAUGHS
0:04:46 > 0:04:48Sarah Willingham's on target.
0:04:48 > 0:04:51- Oh, nailed it. - It's quite good, isn't it?
0:04:51 > 0:04:55But will Steven score a bull's-eye with his investment opportunity?
0:04:55 > 0:04:56A lot of fun.
0:04:56 > 0:04:59Deborah Meaden gets the ball rolling.
0:05:02 > 0:05:06So, Steven. You've got 400 schools and organisations.
0:05:06 > 0:05:07Yeah.
0:05:07 > 0:05:09Are you making any money?
0:05:09 > 0:05:11Yeah, it's been profitable since the first year.
0:05:11 > 0:05:15Three years ago, our turnover was at 81,000.
0:05:15 > 0:05:16And we had a net of 39.
0:05:16 > 0:05:19The year after that, it went up to 112,000.
0:05:19 > 0:05:21And a 21 net.
0:05:21 > 0:05:25The year after that, I had to make some structural changes in the company
0:05:25 > 0:05:27and we took a little hit on that.
0:05:27 > 0:05:30But thanks to those changes, we're now reaping the rewards.
0:05:30 > 0:05:32We're over 200,000 this year, as I say.
0:05:32 > 0:05:35With 125 growth and a 45 net.
0:05:35 > 0:05:39So let's talk... Let's look into the future, then. What does that look like going forward?
0:05:39 > 0:05:44Going forward, next year, we're anticipating 720,000 with a gross of 330
0:05:44 > 0:05:46and a net of 125.
0:05:47 > 0:05:52The year after that, we are looking at 1.2 million, with a 550 gross.
0:05:52 > 0:05:54And a 260 net.
0:05:56 > 0:06:00The fitness entrepreneur is forecasting healthy profits,
0:06:00 > 0:06:05but Steven's prediction of a leap in turnover of £500,000 next year
0:06:05 > 0:06:08is going to take some justifying to Peter Jones.
0:06:10 > 0:06:13Steven, you've got a huge jump, haven't you?
0:06:13 > 0:06:16Which is... Which is always typical when somebody comes in and pitches.
0:06:16 > 0:06:19They're never going to be realistic and give a realistic figure,
0:06:19 > 0:06:22- they're going to give a figure that's...- I would stop you there, actually, Peter.
0:06:22 > 0:06:25These figures are realistic and I'll happily go on to explain that.
0:06:25 > 0:06:28We don't just operate in schools or local authorities,
0:06:28 > 0:06:30we operate in multiple markets successfully.
0:06:30 > 0:06:33But what are you going to go from? 200,000 of sales to what?
0:06:33 > 0:06:35- To 720.- Amazing.
0:06:35 > 0:06:37Yeah, I would be disappointed if that's all we hit,
0:06:37 > 0:06:40- if I'm being honest with you. - And do you believe pigs fly?
0:06:40 > 0:06:42Sorry?
0:06:42 > 0:06:44- They do in my world.- Yeah.
0:06:44 > 0:06:47No, I have no doubt.
0:06:47 > 0:06:51Simply because of... I've spent five years
0:06:51 > 0:06:53learning and making wrong moves.
0:06:53 > 0:06:56And now I have what I believe is the perfect business model moving
0:06:56 > 0:07:01forward. What we need today is investment to buy
0:07:01 > 0:07:04more equipment and vans and an office space. But most importantly...
0:07:04 > 0:07:07But, Steven, it's got to be a lot better than that.
0:07:07 > 0:07:11Because you are currently turning over...
0:07:11 > 0:07:14There's a technical term, I'm going to call it diddly squat.
0:07:14 > 0:07:17- Yeah.- And you don't have the run rate to support £800,000 worth of
0:07:17 > 0:07:19forecasted sales.
0:07:19 > 0:07:20How so?
0:07:22 > 0:07:24You are forecasted to do 200,000.
0:07:24 > 0:07:26- Yeah.- Where's your 800,000 run rate?
0:07:26 > 0:07:30Erm, I might have missed it out. It's the pending contracts that I'm talking about with the
0:07:30 > 0:07:33- local authorities.- What contracts have you won that's going to change?
0:07:33 > 0:07:35Yeah, I'll show...
0:07:42 > 0:07:45- So what have I got here?- The first two contracts you see there are the signed
0:07:45 > 0:07:47ones from South Lanarkshire and North Ayrshire.
0:07:47 > 0:07:50The ones behind it are the ones that are pending.
0:07:50 > 0:07:52If we land Glasgow successfully,
0:07:52 > 0:07:56we're looking at £500,000 a year with that single customer in a
0:07:56 > 0:07:59single market, bearing in mind we operate in multiple markets.
0:08:01 > 0:08:02Right.
0:08:06 > 0:08:08Steven, you have no proven business model whatsoever.
0:08:08 > 0:08:11You've just got an agreement which you've agreed to trial.
0:08:11 > 0:08:14If it doesn't work, you'll have a cooling off period and nothing will
0:08:14 > 0:08:16happen going after it. You have no proof.
0:08:16 > 0:08:20This actually doesn't give you any validation of your business.
0:08:20 > 0:08:24- We've got the sales for it. I mean...- You haven't, because you haven't done anything with it.
0:08:24 > 0:08:26You're not looking at the sales, you're looking at a contract.
0:08:26 > 0:08:30The sales started in February with a pilot programme at Broadwood Stadium and North Lanarkshire Council.
0:08:30 > 0:08:32Yeah, but not these two contracts.
0:08:32 > 0:08:35Yeah. I'll go through the story if you want to know the answers.
0:08:35 > 0:08:39No, it would be really important. Because at the moment, I'm seeing a contract that's only just signed.
0:08:39 > 0:08:41- Yeah.- When you went to the back,
0:08:41 > 0:08:44you were showing me and proving to me why your business has delivered,
0:08:44 > 0:08:46and going to deliver, 800,000.
0:08:46 > 0:08:49- Yeah.- I need to know why this will prove that to me.
0:08:49 > 0:08:51Because we have just formalised our set-up.
0:08:51 > 0:08:55So we went back to the councils and said, "We need this agreement signed,"
0:08:55 > 0:08:57and that's why they've just been signed.
0:08:57 > 0:09:00So, how much business have you done with South Lanarkshire Leisure?
0:09:00 > 0:09:03With South Lanarkshire Leisure, they have just started.
0:09:03 > 0:09:05They're starting at the end of June, the start of July.
0:09:05 > 0:09:09- Their first events are.- So you haven't done anything with that one? - The tickets are on sale just now.
0:09:09 > 0:09:11Have you done anything with that one? There's a yes or no answer.
0:09:11 > 0:09:14- Yes.- So what business have you done with this?
0:09:14 > 0:09:17Around £4,000 of ticket sales pending for events that are about to come.
0:09:17 > 0:09:20Contract two with North Ayrshire.
0:09:20 > 0:09:22- What have you done with them? - We're 2.5 with them.
0:09:22 > 0:09:262.5 with them. Falkirk Community Trust, how much business have you done with them?
0:09:26 > 0:09:27And how much money have you taken?
0:09:27 > 0:09:29We're sitting at around 6.5 with them.
0:09:29 > 0:09:34OK. So everything I have in this file which you gave me to demonstrate and
0:09:34 > 0:09:37to prove that you have a business that's going to go from 165,000 to
0:09:37 > 0:09:41800,000. You've shown me the contracts that you've signed are
0:09:41 > 0:09:44giving you £13,000.
0:09:44 > 0:09:47In total, it's 35,000 with North Lanarkshire.
0:09:47 > 0:09:50Where's the £500,000 contract you alluded to?
0:09:50 > 0:09:54That... That's based on solely the Glasgow one that we're about to sign.
0:09:54 > 0:09:57- And that's the one at the back? - Yeah, the pending contracts.
0:09:57 > 0:10:01OK. So, it's the one at the back that actually doesn't say anything, but it's just got a photocopy of...
0:10:01 > 0:10:04- To represent what's about to be signed, yeah.- It's just like that?- Yes.
0:10:06 > 0:10:08Steven, do you know what? I'm not going to be very long.
0:10:08 > 0:10:10I don't like it.
0:10:10 > 0:10:12OK. Sorry to hear it.
0:10:12 > 0:10:16I think you've just demonstrated to me that you're not going to go from 200 to 800,000.
0:10:16 > 0:10:19Anybody can do this. I don't think you have something particularly unique.
0:10:19 > 0:10:21You've only just signed the contracts.
0:10:21 > 0:10:25So I'm not even going to waste my breath or my time, I'm out.
0:10:25 > 0:10:26OK. Thanks for your input, Peter.
0:10:29 > 0:10:34He was the Dragon Steven saw as his ideal investor.
0:10:34 > 0:10:39But an irritated Peter Jones swiftly exits the negotiations.
0:10:40 > 0:10:45Does the business proposition make financial sense to e-commerce mogul
0:10:45 > 0:10:46Nick Jenkins?
0:10:47 > 0:10:49Can I talk to you about cash flow?
0:10:49 > 0:10:51Because, inherently, the cash flow in is quite good.
0:10:53 > 0:10:56You're getting paid in advance effectively for these things, aren't you?
0:10:56 > 0:10:58We don't. It's ten days after the event.
0:10:58 > 0:11:01OK, ten days after, but you're paying about 30 days after to the council.
0:11:01 > 0:11:04- Correct.- And then your staff, you're probably not paying on the day.
0:11:04 > 0:11:07- Yeah. End of the month.- So, you talked about a second office in Manchester.
0:11:07 > 0:11:11Scratch that, you don't need it. Talked about buying vans, scratch that. This year, rent them.
0:11:11 > 0:11:12You talked about staff.
0:11:12 > 0:11:15Well, you hire those and pay those on a daily basis.
0:11:15 > 0:11:16That's no cash-flow issue.
0:11:16 > 0:11:20Deliver on these, get your £750,000 worth of turnover,
0:11:20 > 0:11:22and then you won't need to raise any money.
0:11:22 > 0:11:25And for that reason, I'm out.
0:11:25 > 0:11:27OK. Thanks for your input.
0:11:28 > 0:11:33Another blow for Steven as Nick Jenkins offers advice,
0:11:33 > 0:11:34but declines to invest.
0:11:35 > 0:11:40Will Touker Suleyman or Sarah Willingham be more prepared to part
0:11:40 > 0:11:41with their cash?
0:11:43 > 0:11:45Steven.
0:11:45 > 0:11:48I believe this is not an investment for me.
0:11:48 > 0:11:50Because I think it's too small.
0:11:50 > 0:11:53I think a lot of it is based on crystal ball.
0:11:55 > 0:11:57I think it's a good little business you're running,
0:11:57 > 0:11:59but I'm not going to invest.
0:11:59 > 0:12:01- OK. I appreciate your time. Thank you.- I'm out.
0:12:03 > 0:12:06Steven, you've got a lot of pending stuff there.
0:12:06 > 0:12:09If you can prove that, you've proven the business model,
0:12:09 > 0:12:11it's been going for six to 12 months.
0:12:11 > 0:12:16You know, you can be asking me for money for a lot higher valuation once
0:12:16 > 0:12:18that's proven and you've got that revenue model set.
0:12:18 > 0:12:20So, I'm not going to invest,
0:12:20 > 0:12:23but I hope you get there because I think it's a great thing for kids,
0:12:23 > 0:12:26I really do. So, good luck, but I'm afraid I'm out.
0:12:29 > 0:12:34Four Dragons down, and after a pitch with some tetchy exchanges,
0:12:34 > 0:12:38it's time for a bit of straight talking from Deborah Meaden.
0:12:41 > 0:12:46You probably don't know, but you do come across as a little bit spiky
0:12:46 > 0:12:48when you're talking to investors.
0:12:48 > 0:12:49You know, engage with them.
0:12:49 > 0:12:51Don't push against them.
0:12:51 > 0:12:54You know, because you've got five people here looking to put money
0:12:54 > 0:12:56into businesses. Anyway,
0:12:56 > 0:13:01expansion for you right now outside of Scotland is the wrong thing to do.
0:13:01 > 0:13:03Consolidate.
0:13:03 > 0:13:05Get these landed.
0:13:05 > 0:13:09- OK.- Do that first before you do any more, please.
0:13:09 > 0:13:11OK, Deborah, thanks again for that.
0:13:11 > 0:13:14For me, your whole expansion plan, it's just too early.
0:13:14 > 0:13:17So, for that reason, I'm afraid, I'm out.
0:13:20 > 0:13:21I appreciate it, guys. Thank you.
0:13:23 > 0:13:29So, Deborah Meaden blows the final whistle on Steven's investment hopes.
0:13:29 > 0:13:32He leaves the Den bruised, but ready to fight another day.
0:13:33 > 0:13:36Didn't go as I expected.
0:13:36 > 0:13:39It was pretty rough. Pretty rough.
0:13:39 > 0:13:42I always think it's an interesting strategy to try and pit
0:13:42 > 0:13:45yourself against the Dragons, as opposed to engaging.
0:13:45 > 0:13:50I think Peter took a rather aggressive approach to analysing the business.
0:13:50 > 0:13:53And unfortunately, the other Dragons ended up picking up on the
0:13:53 > 0:13:57negativity that I think I was ultimately emitting by the end of it.
0:14:07 > 0:14:10Next into the Den is Matthew Statham,
0:14:10 > 0:14:12an engineer turned entrepreneur.
0:14:13 > 0:14:15Every engineer likes to solve a problem.
0:14:15 > 0:14:19I just needed a problem to solve that was unique, and this is what I think
0:14:19 > 0:14:21I've stumbled across.
0:14:21 > 0:14:26And Matthew has engineered a plan to secure Dragon investment.
0:14:26 > 0:14:29My strategy, I think, is really to get them to catch a vision.
0:14:29 > 0:14:32This business is not a small business.
0:14:32 > 0:14:34And if it grows the way I think it's going to grow,
0:14:34 > 0:14:36it'll be a really good investment for them.
0:14:49 > 0:14:50Hi.
0:14:50 > 0:14:53Excuse me, while I just light my wood-burning stove.
0:14:54 > 0:14:57My name's Matthew and I've come to talk to you about the
0:14:57 > 0:15:04AutoBlaze Stove Ignition System. I'm seeking £150,000 investment for a 15% equity
0:15:04 > 0:15:08stake in the company. Owning a wood-burning stove is becoming more and more popular these days
0:15:08 > 0:15:12and considered an attractive additional feature to the modern-day home.
0:15:12 > 0:15:14But the hassle of lighting a wood-burning stove can be
0:15:14 > 0:15:18off-putting to some people more used to an automatic or instantaneous
0:15:18 > 0:15:19central heating system.
0:15:19 > 0:15:24AutoBlaze is a fire lighting system which is built into the stove and
0:15:24 > 0:15:27can fully establish the fire in just five minutes.
0:15:27 > 0:15:29You simply close the stove door,
0:15:29 > 0:15:33press the remote control and it will light wood just on its own.
0:15:33 > 0:15:37AutoBlaze uses superheated hot air which is blown onto the fuel and can
0:15:37 > 0:15:40light wood very quickly.
0:15:40 > 0:15:43There's nothing actually new about using hot air to light fuel,
0:15:43 > 0:15:47but nobody's integrated a fan-based hot air ignition system into a
0:15:47 > 0:15:50wood-burning stove before.
0:15:50 > 0:15:53So, AutoBlaze is quick and convenient to use.
0:15:53 > 0:15:56It's cheap to run and it's eco-friendly.
0:15:56 > 0:15:58Thank you for listening. Any questions?
0:16:00 > 0:16:05An innovative stove ignition system is the offer from Matthew Statham,
0:16:05 > 0:16:11who wants £150,000 in exchange for a 15% stake.
0:16:11 > 0:16:16But has his fire-based business ignited Deborah Meaden's interest?
0:16:20 > 0:16:23I think you need to probably describe to me better how it works.
0:16:23 > 0:16:25So, the thing that we're looking at
0:16:25 > 0:16:27is the thing that's at the back of those logs?
0:16:27 > 0:16:30That's right. If I can just turn this round for you.
0:16:30 > 0:16:34You can see there's a fan unit with a servo operated vent at the back of
0:16:34 > 0:16:39- the stove.- Right.- And the fan pushes air into the back of the stove at
0:16:39 > 0:16:42- 500 degrees C. - So this isn't a retro...
0:16:42 > 0:16:44This isn't something I could buy for my stoves at home?
0:16:44 > 0:16:46This isn't a retrofit.
0:16:46 > 0:16:50This is something you'd install into a stove and you would sell auto
0:16:50 > 0:16:52igniting wood-burning stoves.
0:16:52 > 0:16:54We're selling to the stove manufacturers.
0:16:54 > 0:16:56- OK.- So, it's an optional extra that they can fit.
0:16:56 > 0:16:59It would retail for approximately £500.
0:16:59 > 0:17:03- OK.- Although technically you could actually put one of these units
0:17:03 > 0:17:06retrofitted to a stove, in practice, it's too much work.
0:17:06 > 0:17:08I'm really struggling. I'm struggling to get excited about it.
0:17:10 > 0:17:12Why?
0:17:12 > 0:17:14Well, it's just... It's a bit boring.
0:17:15 > 0:17:18It's just a... It's like an automatic lighter for a...
0:17:19 > 0:17:21stove, isn't it?
0:17:21 > 0:17:23Yes.
0:17:23 > 0:17:27Isn't a stove about the fact that actually you put wood in the stove
0:17:27 > 0:17:31- and light it?- I think some people like the whole Man Friday thing of lighting
0:17:31 > 0:17:35the fire, and actually that's part of the attraction of a stove for some people.
0:17:35 > 0:17:37There are some other advantages to it.
0:17:37 > 0:17:41European requirements are now coming into place where you have to make your stoves more efficient.
0:17:41 > 0:17:43Is it going to make it more interesting?
0:17:43 > 0:17:47Yes, it is, because at the moment, with new European legislation coming out,
0:17:47 > 0:17:50we're getting to the point where stoves are having to be so efficient
0:17:50 > 0:17:52that this becomes more and more necessary.
0:17:52 > 0:17:56- You've just made it more boring... - Because if you've got a coal flue on your stove,
0:17:56 > 0:17:59you open the stove, you try and light it and instead of the smoke going up
0:17:59 > 0:18:01the flue, it comes out into the room.
0:18:01 > 0:18:07You've come up with a fan that with a remote control turns on a fire.
0:18:07 > 0:18:10Well, it turns on the fire, but after five minutes, it goes to sleep.
0:18:10 > 0:18:12You've just described your pitch to me.
0:18:14 > 0:18:20Peter Jones is clearly not a fan of the fan-based fire ignition system.
0:18:20 > 0:18:24Will Nick Jenkins give the idea a warmer reception?
0:18:24 > 0:18:28I can see where you're coming from with this because
0:18:28 > 0:18:29I actually like lighting a fire.
0:18:29 > 0:18:33I take a great deal of satisfaction in lighting my...
0:18:33 > 0:18:35Setting it and lighting it.
0:18:35 > 0:18:38But I can also... I also hate having a smoky room.
0:18:38 > 0:18:42I really do. I hadn't appreciated the thing about the increased regulation
0:18:42 > 0:18:44in the baffling.
0:18:44 > 0:18:48- What's baffling?- The fact that you've got to make the smoke do that before
0:18:48 > 0:18:51- it goes up through the flue. - Are we really getting that deep?
0:18:51 > 0:18:54- Yeah, we are.- Honestly, I feel like I'm in the middle of a dream.
0:18:55 > 0:18:57Matthew, what are you selling?
0:18:57 > 0:19:01Are you selling something that lights the fire for you,
0:19:01 > 0:19:04or are you selling something that avoids smoke coming into the room?
0:19:04 > 0:19:05I'm selling both.
0:19:05 > 0:19:10I'm selling an optional extra to wood-burning stove manufacturers so they
0:19:10 > 0:19:11can help grow their market.
0:19:11 > 0:19:13Right. So now I'm a consumer.
0:19:13 > 0:19:18The stove seller is not going to say to me,
0:19:18 > 0:19:23"Oh, if you buy that stove, though, loads of smoke will come into the room."
0:19:23 > 0:19:26- No, that's right.- But I've got a £500 thing that you can put on the
0:19:26 > 0:19:29back... That conversation is never going to happen.
0:19:29 > 0:19:31The only conversation they can have with you is,
0:19:31 > 0:19:33"We've got this nifty little thing,
0:19:33 > 0:19:35"500 quid, it will light the fire for you."
0:19:35 > 0:19:39And I honestly, honestly think that's a tough sell.
0:19:43 > 0:19:48Sarah Willingham is struggling to see the stove ignition device
0:19:48 > 0:19:50selling like hot cakes.
0:19:50 > 0:19:55But Touker Suleyman wants to know more about Matthew's order book.
0:19:55 > 0:19:58How many have you sold or got orders for?
0:19:58 > 0:20:02I've sold 200 stove lighting systems.
0:20:02 > 0:20:04200. And who have you sold them to?
0:20:04 > 0:20:07- ESSE, stove manufacturer. - So, one stove manufacturer.
0:20:07 > 0:20:10- Yeah.- How many have you got forward orders on?
0:20:10 > 0:20:12- I haven't at the moment. - You haven't.
0:20:12 > 0:20:15So my commitment at the moment is a ten-week lead time.
0:20:15 > 0:20:18What I'd like to be able to be in a position is to hold stock.
0:20:18 > 0:20:22- Fine, but you've just valued your business at...- One million quid.
0:20:22 > 0:20:24- ..approaching £1 million.- Yeah.
0:20:24 > 0:20:25On what basis?
0:20:27 > 0:20:28On the basis of the potential.
0:20:28 > 0:20:32I believe there is a sales forecast that I have which will bring us to a
0:20:32 > 0:20:34position where...
0:20:35 > 0:20:40..in year four, it's making a net profit of £200,000 a year.
0:20:40 > 0:20:43- In year four?!- Yeah.- But we're in year one.
0:20:43 > 0:20:45At £1 million,
0:20:45 > 0:20:47I think it's overvalued.
0:20:48 > 0:20:53Touker Suleyman pours cold water on the price tag the fire-starting
0:20:53 > 0:20:57entrepreneur has put on his business.
0:20:57 > 0:21:01Can he convince Deborah Meaden that his product has potential?
0:21:04 > 0:21:07So, how much does that cost to make?
0:21:07 > 0:21:12Well, I'm not in a position to reveal the net cost to sales because
0:21:12 > 0:21:13this is in a public forum.
0:21:15 > 0:21:16I can reveal that to you afterwards.
0:21:16 > 0:21:19- But what I can say is... - Hold on. You can tell me afterwards.
0:21:19 > 0:21:23What? Afterwards... After I've invested?
0:21:23 > 0:21:24No.
0:21:24 > 0:21:27Well, I suppose... I suppose if you're in the situation where you want to
0:21:27 > 0:21:29make a decision now, what I can assure you...
0:21:29 > 0:21:33What I can assure you is the profit margin is sufficient to recover
0:21:33 > 0:21:37investment and a healthy profit margin.
0:21:37 > 0:21:40- Oh, Matthew.- I can tell you what my sales are.
0:21:40 > 0:21:41I can tell you...
0:21:41 > 0:21:44No, but... No. No, this is a...
0:21:44 > 0:21:46This is like a fundamental part of the business.
0:21:46 > 0:21:48What does the product cost to make?
0:21:48 > 0:21:49Yeah.
0:21:55 > 0:21:57What is your cost of sales?
0:22:07 > 0:22:10- I'm stumped.- OK.- I'm staggered. - I'll...
0:22:10 > 0:22:13- I'll tell you how much it costs. - There we were going along quite nicely,
0:22:13 > 0:22:19- having a lovely conversation about wood-burning stoves.- It costs me £120 to make the system.- Thank you!
0:22:19 > 0:22:22And what do you sell them to the stove manufacturers for?
0:22:22 > 0:22:24- £250.- £250.
0:22:24 > 0:22:28So if I was buying a wood-burning stove and I wanted one of these,
0:22:28 > 0:22:31- it would cost me an extra £500. - I think so, yes.- Right.
0:22:31 > 0:22:33Thank you. I now understand the mechanics of the business.
0:22:33 > 0:22:35Yeah.
0:22:35 > 0:22:41Withholding key company information from five fiery Dragons is always a
0:22:41 > 0:22:44high-risk strategy in the Den.
0:22:44 > 0:22:47Has Matthew burnt his bridges with Nick Jenkins?
0:22:51 > 0:22:52I think...
0:22:52 > 0:22:56I think you've got something that, for all the reasons that you've said,
0:22:56 > 0:23:00will be useful for solving the problem of smoky rooms.
0:23:00 > 0:23:03I don't see a huge benefit in lighting fires,
0:23:03 > 0:23:06that is because the inner pyromaniac in me just says you're sucking the
0:23:06 > 0:23:08fun out of it.
0:23:09 > 0:23:11But I also think you're going to have to reduce the cost of production
0:23:11 > 0:23:15down dramatically if you're going to get these stove manufacturers
0:23:15 > 0:23:21thinking, "You know, I'd rather buy from him than try to circumvent his system."
0:23:21 > 0:23:24And that's going to take quite some time.
0:23:24 > 0:23:28And I'm afraid this is too much of a slow burner for me, so I'm out.
0:23:31 > 0:23:33Out-punning Peter Jones as he exits,
0:23:33 > 0:23:38Nick Jenkins rules out an investment in the fire-ignition system.
0:23:39 > 0:23:41And Touker Suleyman has made up his mind.
0:23:43 > 0:23:46Personally, I...
0:23:46 > 0:23:49I think you've got a very good idea.
0:23:49 > 0:23:54I honestly believe the stove manufacturers will solve the problem.
0:23:54 > 0:23:56You're not going to be the one that's going to save everybody.
0:23:56 > 0:23:59I think you're overvalued.
0:23:59 > 0:24:01For that reason, I'm out.
0:24:03 > 0:24:07I'm going to say where I am. I think I'd rather eat salad every day for
0:24:07 > 0:24:09the next year
0:24:09 > 0:24:13than invest in something like this. I just... I don't get it.
0:24:13 > 0:24:17You're pimping up something that I just don't think needs pimping.
0:24:17 > 0:24:19And it's odd.
0:24:19 > 0:24:22And for that reason, I'm out.
0:24:24 > 0:24:26No surprises there,
0:24:26 > 0:24:31as Peter Jones fails to find a spark in a potential business partnership
0:24:31 > 0:24:33and walks away from the deal.
0:24:33 > 0:24:37Has Sarah Willingham overcome her earlier concerns?
0:24:41 > 0:24:45Matthew, I have a fundamental issue with the fact that you are trying
0:24:45 > 0:24:51to sell it to stove manufacturers that are then going to try and flog
0:24:51 > 0:24:55this to the consumer because they may,
0:24:55 > 0:24:57on the off-chance, have a problem before
0:24:57 > 0:24:59they know they've got a problem.
0:24:59 > 0:25:01I'm not going to invest in it, so I'm out.
0:25:04 > 0:25:07Four Dragons down.
0:25:07 > 0:25:10Only Deborah Meaden remains.
0:25:10 > 0:25:13She's shown the most enthusiasm for the product so far.
0:25:13 > 0:25:16Is she primed to offer or exit?
0:25:18 > 0:25:21You're actually in a great position.
0:25:21 > 0:25:24You don't have that many manufacturers to talk to...
0:25:25 > 0:25:28..you're the only person with the solution,
0:25:28 > 0:25:30and what would be even more clever
0:25:30 > 0:25:32is if you can find a way of making it a retrofit.
0:25:32 > 0:25:35- Yeah, that's the key. - Because that is the absolute key.
0:25:35 > 0:25:37That would revolutionise your business.
0:25:37 > 0:25:38Yeah.
0:25:38 > 0:25:39Keep going.
0:25:39 > 0:25:41You'll sell some. Absolutely.
0:25:41 > 0:25:44And I hope that you find a way of producing it in a cheaper way.
0:25:45 > 0:25:47But, I'm afraid I... I...
0:25:47 > 0:25:50As it is, as it stands, I'm out.
0:25:50 > 0:25:52Thank you for your feedback. Thank you very much.
0:25:52 > 0:25:55- All right. Thank you. - Good luck, Matthew.
0:25:55 > 0:25:58Matthew's trial by fire is over.
0:25:58 > 0:26:01He leaves the Den without the cash he came in for
0:26:01 > 0:26:04and without a convert in Peter Jones.
0:26:07 > 0:26:09Yeah, Peter, I think
0:26:09 > 0:26:10was obviously bored.
0:26:11 > 0:26:13What kind of a man are you, Peter?
0:26:13 > 0:26:15- It's fire.- Well...
0:26:15 > 0:26:18- I found that incredibly boring. - Did you? I didn't.
0:26:18 > 0:26:21- I don't know whether you picked that up, but... - DEBORAH LAUGHS
0:26:21 > 0:26:22It didn't excite him.
0:26:22 > 0:26:25Clearly, he didn't catch the vision, and I understand that.
0:26:34 > 0:26:37Hoping for more luck in perking up Peter Jones
0:26:37 > 0:26:39with his eureka business idea
0:26:39 > 0:26:42was Cambridgeshire-based salesman Adam Stevenson.
0:26:43 > 0:26:48He was looking to bag £60,000 in exchange for a 20% stake
0:26:48 > 0:26:51in his six-pack inspired luggage range.
0:26:51 > 0:26:55The inspiration came from statues, photographs,
0:26:55 > 0:26:57as well as the iconic perfume bottle
0:26:57 > 0:27:00that was sitting on my wife's dressing table at home.
0:27:00 > 0:27:04E-commerce innovator Nick Jenkins felt an instant affinity.
0:27:04 > 0:27:06I look at this, it's like looking in the mirror.
0:27:06 > 0:27:09SARAH LAUGHS
0:27:09 > 0:27:11Definitely stands out.
0:27:11 > 0:27:13How many of these have you sold so far?
0:27:13 > 0:27:15Just about 100 so far.
0:27:15 > 0:27:17The stock only arrived a few weeks ago.
0:27:17 > 0:27:20But a trickle of early sales wasn't the thing
0:27:20 > 0:27:23weighing on Peter Jones's mind.
0:27:23 > 0:27:25Do you have the one with boobs, as well, then?
0:27:25 > 0:27:27Well, we looked at the female shape.
0:27:27 > 0:27:29It's tricky. Because obviously, for obvious reasons,
0:27:29 > 0:27:31you can't quite make the mould in shape.
0:27:31 > 0:27:33I'm sorry. Your hand movements there were lovely.
0:27:33 > 0:27:36- Well...- "There were obvious reasons..."
0:27:36 > 0:27:38To be fair, you've got two natural seats.
0:27:38 > 0:27:42Why don't you put, like, a normal shape on there, a bit like mine.
0:27:42 > 0:27:43Which is a bit of a...
0:27:43 > 0:27:46A bit of a man boob and a bit of a tummy on it.
0:27:46 > 0:27:48I've trademarked body-shaped luggage,
0:27:48 > 0:27:51so I could do the lady one, which would be tricky.
0:27:51 > 0:27:53I could do the beer belly one, we could do anything we want.
0:27:53 > 0:27:56But this is the one that struck the chord.
0:27:56 > 0:28:01But with the torso travel case costing just shy of £100,
0:28:01 > 0:28:04Sarah Willingham felt the price could be leaner.
0:28:04 > 0:28:08I actually think the 19 to 24-year-old really is your market.
0:28:08 > 0:28:10The people who are older,
0:28:10 > 0:28:12who have perhaps got slightly more disposable income
0:28:12 > 0:28:15and who might want to spend nearly £100 on a suitcase,
0:28:15 > 0:28:18I think will be put off by the six-pack...
0:28:19 > 0:28:21..because they haven't got one.
0:28:21 > 0:28:25And Nick Jenkins was also failing to see the mass market appeal.
0:28:25 > 0:28:28Some will be bought as a novelty,
0:28:28 > 0:28:32some will be bought by people who love themselves a lot
0:28:32 > 0:28:34and possibly look like that.
0:28:34 > 0:28:38You'll dominate the niche of slightly narcissistic people
0:28:38 > 0:28:40and hen parties.
0:28:40 > 0:28:42And with Nick Jenkins unconvinced,
0:28:42 > 0:28:47it was an open-and-shut case for the remaining Dragon investors.
0:28:47 > 0:28:49I won't be investing. I'm really sorry, but I'm out.
0:28:49 > 0:28:52- I'm afraid I'm out.- I'm out.
0:28:52 > 0:28:54I just feel that there isn't a business there.
0:28:54 > 0:28:56For that reason, I'm out.
0:28:56 > 0:28:58Thank you.
0:28:58 > 0:29:00So, Adam failed to inspire the Dragons
0:29:00 > 0:29:02to buy into his creative vision,
0:29:02 > 0:29:06but he's at least inspired Peter Jones to watch his waistline.
0:29:06 > 0:29:09One thing it's made me do is change my lunch order.
0:29:09 > 0:29:11I was going to have pizza, I'm now going to have salad.
0:29:11 > 0:29:13- SARAH LAUGHS - I just want some lettuce.
0:29:19 > 0:29:22Still to come on tonight's show -
0:29:22 > 0:29:24an ambiguous order...
0:29:24 > 0:29:26Can I...? Can I talk to you about this agreement?
0:29:26 > 0:29:28Yes.
0:29:28 > 0:29:29It's nothing.
0:29:29 > 0:29:32..and a very candid entrepreneur.
0:29:32 > 0:29:34These contracts that you've just signed...
0:29:34 > 0:29:36- Yes.- Who was it?
0:29:36 > 0:29:38I can't say the name.
0:29:39 > 0:29:41Right. So like Global?
0:29:41 > 0:29:43That could be them, yes.
0:29:43 > 0:29:44Yeah. Is it them?
0:29:45 > 0:29:47Yes.
0:29:52 > 0:29:55Next into the Den is Falu Sha,
0:29:55 > 0:29:56a Cheshire-based entrepreneur
0:29:56 > 0:30:00who believes she has a winning new range for the food market.
0:30:05 > 0:30:07I think the business and the products are amazing.
0:30:09 > 0:30:13I don't believe the Dragons will have any issues with that.
0:30:16 > 0:30:21I'm looking forward to excite them and excite their palates.
0:30:22 > 0:30:26But will the Dragons be excited by the business opportunity?
0:30:35 > 0:30:38My name is Falu and I'm here to talk about
0:30:38 > 0:30:42an exciting new opportunity called Howdah Snacks.
0:30:42 > 0:30:46I'm looking for £100,000 of investment monies
0:30:46 > 0:30:51in return for 17.5% equity stake in my business.
0:30:51 > 0:30:55I was born and brought up in India, in a small town near Mumbai.
0:30:55 > 0:30:59I moved to UK in 1988,
0:30:59 > 0:31:03and one thing which I missed most about India was the Indian snacks.
0:31:03 > 0:31:07This is where the idea for Howdah originated.
0:31:07 > 0:31:11Howdah Snacks are made using authentic and traditional recipes.
0:31:11 > 0:31:15Ingredients are free from any artificial colours and flavours.
0:31:15 > 0:31:18The journey began with launch in Harrods,
0:31:18 > 0:31:20and then over the last two years
0:31:20 > 0:31:24we've expanded into 150 plus fine food and farm shops.
0:31:24 > 0:31:26Last 12 months,
0:31:26 > 0:31:30I have focused solely on getting Howdah Snacks into a number
0:31:30 > 0:31:32of new distribution channels.
0:31:32 > 0:31:35At this moment, we've got an enquiry from airline industry,
0:31:35 > 0:31:39a letter of interest in the region of one million packs per month
0:31:39 > 0:31:41with a contract of 12 months.
0:31:41 > 0:31:44And I have also secured a letter of intent
0:31:44 > 0:31:47which is in its final stages of negotiation
0:31:47 > 0:31:49with a distributor in Europe
0:31:49 > 0:31:55to supply into European supermarkets across 600 stores,
0:31:55 > 0:31:58and the launch order is in the region of £2 million.
0:31:58 > 0:32:01And with that, I would like to thank you for your time,
0:32:01 > 0:32:03and would like you to try some of the snacks
0:32:03 > 0:32:05I've brought with me today.
0:32:07 > 0:32:09Bringing a taste of Mumbai to the Den...
0:32:09 > 0:32:11- Thank you.- ..is Falu Shah.
0:32:12 > 0:32:14She's seeking £100,000...
0:32:16 > 0:32:20..in return for a 17.5% equity stake.
0:32:21 > 0:32:23Nick Jenkins has previously bankrolled
0:32:23 > 0:32:26some lucrative snack investments.
0:32:26 > 0:32:30He wastes no time in getting to the bottom of those big money orders.
0:32:32 > 0:32:34This all sounds very, very impressive.
0:32:34 > 0:32:37And particularly the orders that you've got lined up.
0:32:37 > 0:32:39How much did you turn over in the last 12 months?
0:32:39 > 0:32:42Last 12 months, we will finish at £90,000.
0:32:42 > 0:32:44- 90,000?- Yes.- OK.
0:32:44 > 0:32:45And the gross margin?
0:32:45 > 0:32:47Gross margin is 58.8%.
0:32:47 > 0:32:49Yeah, OK. And where do you see sales going?
0:32:49 > 0:32:51Cos it sounds as though,
0:32:51 > 0:32:54from the talk about a million packets a month here
0:32:54 > 0:32:57and then there's a couple of million there,
0:32:57 > 0:32:58it all sounds fantastic.
0:32:58 > 0:33:01What do you think is going to...? What are your projections for the next three years?
0:33:01 > 0:33:04For the next 12 months, I'm looking at 2.1 million.
0:33:04 > 0:33:05This is simply from...
0:33:05 > 0:33:09The order from European distributor is in the region of 2 million.
0:33:09 > 0:33:12The question is how confident can you be
0:33:12 > 0:33:16about this business that you've got, that you've got coming up?
0:33:16 > 0:33:18Lots of things can go wrong with supplying,
0:33:18 > 0:33:19and that can all go horribly wrong.
0:33:19 > 0:33:23It could, but the product has been now tested for two years,
0:33:23 > 0:33:24packaging has been tested,
0:33:24 > 0:33:27the supply channel is a well-established channel.
0:33:27 > 0:33:28Yeah, OK.
0:33:28 > 0:33:30And this deal is going to happen?
0:33:30 > 0:33:32I've got a letter of intent.
0:33:32 > 0:33:34- Can we see it?- Yeah.
0:33:42 > 0:33:45OK, that's the... That's the letter of intent.
0:33:45 > 0:33:46- And that's an airline enquiry.- Yeah.
0:33:46 > 0:33:48OK. Thanks.
0:33:50 > 0:33:53As Nick Jenkins pours over the fine detail,
0:33:53 > 0:33:56global restaurant entrepreneur Sarah Willingham
0:33:56 > 0:34:00is pondering where this snacks sits in a saturated market.
0:34:02 > 0:34:04By the way, I think they're really nice.
0:34:04 > 0:34:05- Thank you.- I just want to say that.
0:34:05 > 0:34:07Who are you trying to aim at?
0:34:07 > 0:34:08Who do you want to buy these?
0:34:08 > 0:34:11Who do you want to take them off the shelves?
0:34:11 > 0:34:14It's mainly people who are looking at alternate snacks.
0:34:14 > 0:34:18Those who are going down the world-food aisle looking for something different,
0:34:18 > 0:34:19those who have travelled.
0:34:19 > 0:34:20Actually, I'm just going to stop you there,
0:34:20 > 0:34:23because you've just said exactly what I thought,
0:34:23 > 0:34:25which is the world-food aisle.
0:34:25 > 0:34:27Not every supermarket has that world-food aisle.
0:34:29 > 0:34:33Now, if you are trying to get your Indian snacks
0:34:33 > 0:34:35into that part of the supermarket,
0:34:35 > 0:34:38that's a really small sector of the market.
0:34:38 > 0:34:41World-food aisle, it's a beginning.
0:34:41 > 0:34:44They will then venture into the mainstream aisle.
0:34:44 > 0:34:47I mean, I've seen people trying to do this with Indian sweets
0:34:47 > 0:34:49and Indian desserts,
0:34:49 > 0:34:53and they've failed in the big supermarkets.
0:34:53 > 0:34:56They've failed to get into the mass market
0:34:56 > 0:34:58because it's such an alien taste to us.
0:34:58 > 0:35:00We're just not ready.
0:35:02 > 0:35:06Sarah Willingham's finding the investment proposition
0:35:06 > 0:35:07hard to swallow.
0:35:07 > 0:35:10And now king of outsourcing Touker Suleyman
0:35:10 > 0:35:14predicts another problem for her bite-sized business.
0:35:18 > 0:35:22What concerns me is how many other small entrepreneurs
0:35:22 > 0:35:25are there like you, who are doing a very similar product,
0:35:25 > 0:35:26who are out there,
0:35:26 > 0:35:28who will be your competition.
0:35:28 > 0:35:30If you went into Asian supermarkets,
0:35:30 > 0:35:33there are similar-sounding products available.
0:35:33 > 0:35:37So I would not say that people can't make it, they can make it.
0:35:37 > 0:35:41But it's still... In England, to make similar, authentic snack
0:35:41 > 0:35:43is not as easy.
0:35:43 > 0:35:48I promise you one thing - the moment you get this into a supermarket,
0:35:48 > 0:35:50and it works,
0:35:50 > 0:35:53they'll be going to India directly and having their own label.
0:35:53 > 0:35:57Because you haven't got a very unique product
0:35:57 > 0:35:59that somebody can't copy.
0:35:59 > 0:36:00So I think you're vulnerable.
0:36:01 > 0:36:05If I was to put out four, five Indian snacks here,
0:36:05 > 0:36:06you would see a point of difference
0:36:06 > 0:36:08in the product and the quality of the product.
0:36:08 > 0:36:10I'd probably see a difference, yes.
0:36:10 > 0:36:13But what I'm saying is that, to the consumer,
0:36:13 > 0:36:16who doesn't really know what to expect,
0:36:16 > 0:36:18I don't think it'll make a lot of difference.
0:36:21 > 0:36:22Stiff competition ahead
0:36:22 > 0:36:26is the view of global manufacturing tycoon Touker Suleyman.
0:36:28 > 0:36:32Now, Nick Jenkins wants to take Falu to task
0:36:32 > 0:36:33over her paperwork,
0:36:33 > 0:36:35and that £2 million order.
0:36:37 > 0:36:40Can I...? Can I talk to you about this agreement?
0:36:40 > 0:36:42- Yes.- Or this letter of intent.
0:36:44 > 0:36:45It's nothing.
0:36:48 > 0:36:50It's basically a letter from a supplier
0:36:50 > 0:36:52who wants to have the exclusive rights
0:36:52 > 0:36:55to deal with a particular European supermarket.
0:36:55 > 0:36:57It doesn't say that they're going to buy anything.
0:36:58 > 0:37:01It's a five-year agreement and it has no minimums in it.
0:37:01 > 0:37:04That's what we are negotiating with them.
0:37:04 > 0:37:05The buyers have...
0:37:05 > 0:37:06Well, but there's nothing.
0:37:06 > 0:37:08This document, to me,
0:37:08 > 0:37:11it doesn't have a lot of the things that I would expect there to be in there.
0:37:13 > 0:37:14What it says is,
0:37:14 > 0:37:16"Yeah, we would like to have the right to sell your product
0:37:16 > 0:37:18"to a supermarket in Europe."
0:37:18 > 0:37:20And also, by the way,
0:37:20 > 0:37:22there's a clause in here that says that either party
0:37:22 > 0:37:27can just break it off with a payment of £0 at any point in the future.
0:37:27 > 0:37:28So, what is it?
0:37:30 > 0:37:33We've been talking and working with this distributor
0:37:33 > 0:37:36and we've developed a separate range of product
0:37:36 > 0:37:37which the buyer wants.
0:37:37 > 0:37:41Fine, but what do you think this letter of intent would give you?
0:37:41 > 0:37:43The letter of intent...
0:37:43 > 0:37:46We have reached a point where they are putting together
0:37:46 > 0:37:49a contract for purchasing.
0:37:49 > 0:37:51The letter of intent is simply to make sure
0:37:51 > 0:37:54that that is going to happen.
0:37:54 > 0:37:56But it doesn't make sure of anything.
0:37:59 > 0:38:01If you're selling us on the likelihood of there being a deal...
0:38:01 > 0:38:04I'm not selling on the likelihood alone of that deal.
0:38:04 > 0:38:06I believe the product has a place in the British market.
0:38:06 > 0:38:10OK, without those deals, what you have is a perfectly nice product,
0:38:10 > 0:38:14I quite like it, but plenty of those things are around on the market at the moment.
0:38:14 > 0:38:16There are.
0:38:16 > 0:38:18So, what we're looking at is a business
0:38:18 > 0:38:21that currently turns over £90,000 a year,
0:38:21 > 0:38:24and you've projected in the next year 2.1 million sales,
0:38:24 > 0:38:28but largely on the back of these documents, which are at best flimsy.
0:38:30 > 0:38:31I'm afraid I'm out.
0:38:34 > 0:38:38Nick Jenkins swiftly rules himself out.
0:38:38 > 0:38:39Can the Dragon with form
0:38:39 > 0:38:42in transforming a source brand into a major player
0:38:42 > 0:38:46in the multinationals also make the magic happen
0:38:46 > 0:38:48for Falu's range of Indian snacks?
0:38:51 > 0:38:56What I feel is that Howdah is not going to become a big brand
0:38:56 > 0:38:59without something really special.
0:39:02 > 0:39:04So I think you're really going to struggle,
0:39:04 > 0:39:06and £100,000 I don't think is going to touch the sides,
0:39:06 > 0:39:08although I would suggest your business isn't worth
0:39:08 > 0:39:12£600,000 or £700,000 today, so it's a big ask.
0:39:14 > 0:39:16I couldn't make a return on this
0:39:16 > 0:39:18because you've got nothing of any real substance
0:39:18 > 0:39:20to hold the brand together.
0:39:21 > 0:39:24I'm not going to invest, and say I'm out.
0:39:26 > 0:39:28I'll tell you where I stand.
0:39:28 > 0:39:30It is a very, very niche market.
0:39:31 > 0:39:36You quite openly said you're looking for a Dragon that's got expertise
0:39:36 > 0:39:37in this area.
0:39:37 > 0:39:40Although I've got expertise in lots of areas,
0:39:40 > 0:39:43this is one area where I haven't got that much expertise.
0:39:43 > 0:39:46Today I'm not going to be investing with you, I'm afraid, and I'm out.
0:39:49 > 0:39:53Touker Suleyman also declines to offer the £100,000
0:39:53 > 0:39:56the entrepreneur is seeking.
0:39:56 > 0:40:00Will Sarah Willingham be prepared to take a chance?
0:40:04 > 0:40:06In order to really break through
0:40:06 > 0:40:08and give you the kind of volume
0:40:08 > 0:40:12that would actually give me a return on investment,
0:40:12 > 0:40:14you've got to get in there to the mainstream aisles,
0:40:14 > 0:40:16and I just can't see it.
0:40:17 > 0:40:19It's not going to happen.
0:40:20 > 0:40:22- I'm out.- Thank you.
0:40:25 > 0:40:30Sarah Willingham's rejection leaves the snack food entrepreneur
0:40:30 > 0:40:33pinning her hopes for investment on Deborah Meaden.
0:40:34 > 0:40:37Will she do a deal or walk away?
0:40:41 > 0:40:44Funnily enough, I do think there's a place for a recognised brand.
0:40:46 > 0:40:48But I don't think it's going to be
0:40:48 > 0:40:51down the supermarket mainstream aisle
0:40:51 > 0:40:52for a very long time.
0:40:54 > 0:40:57And when it hits, cos sooner or later I'm sure it will,
0:40:57 > 0:41:00you haven't got the resource to get there.
0:41:00 > 0:41:01Deborah, that is why I'm here,
0:41:01 > 0:41:05because your knowledge and expertise can fast forward the brand
0:41:05 > 0:41:09and that is why I have chosen to come in front of you.
0:41:11 > 0:41:13You're really good.
0:41:13 > 0:41:19You've got a very quiet confidence and knowledge about you.
0:41:21 > 0:41:24You could give this as good a chance as this needs.
0:41:26 > 0:41:27But for an investment,
0:41:27 > 0:41:31I don't see the same route and I don't think it's got
0:41:31 > 0:41:33the size of opportunity that I think you probably do at the moment,
0:41:33 > 0:41:36so I'm really sorry, but I won't be investing.
0:41:36 > 0:41:38- I'm out.- Thank you very much.
0:41:38 > 0:41:40- Good luck.- Good luck.
0:41:42 > 0:41:45Her product may have got the Dragons' seal of approval,
0:41:45 > 0:41:49but, ultimately, the business deal Falu was offering
0:41:49 > 0:41:52failed to curry favour with the Dragons.
0:41:53 > 0:41:56Probably it's a question of taking that risk.
0:41:58 > 0:42:01And maybe that's not what they were looking to do today.
0:42:16 > 0:42:22Our final entrepreneur into the Den is Manchester-based John Kershaw.
0:42:22 > 0:42:23I think I'm excited.
0:42:23 > 0:42:26I might just be bricking it.
0:42:27 > 0:42:32My biggest challenge in the Den is going to be getting across the idea
0:42:32 > 0:42:33that my business has value,
0:42:33 > 0:42:37even though it doesn't yet have very much revenue.
0:42:38 > 0:42:42That's going to be the big thing that's probably going to trip me up.
0:42:48 > 0:42:50Hello. I'm John.
0:42:50 > 0:42:53I'm from M14 Industries
0:42:53 > 0:42:56and we are a dating company.
0:42:56 > 0:43:02This £3 billion-a-year industry gives you, effectively, two choices.
0:43:02 > 0:43:06You can sign up to a service like Match.com or OK Cupid,
0:43:06 > 0:43:09answer hundreds or thousands of questions
0:43:09 > 0:43:12all about you and what you like to do on a Friday night,
0:43:12 > 0:43:14and they use information to match you
0:43:14 > 0:43:16with people who are sort of like you.
0:43:16 > 0:43:21Or you can sign up to one of the apps like Tinder or Happn.
0:43:21 > 0:43:24And these do away with all those questions and instead give you,
0:43:24 > 0:43:28effectively, a list of people for you to swipe your way through.
0:43:28 > 0:43:31These apps are very fashionable,
0:43:31 > 0:43:35they're very cool, they're very mobile-friendly,
0:43:35 > 0:43:37but they're very bad at actually matching you with people
0:43:37 > 0:43:41that you have anything in common with except proximity.
0:43:41 > 0:43:47We think the solution is with simple, niche dating apps.
0:43:47 > 0:43:51By targeting a specific niche you can get the specificity of a service
0:43:51 > 0:43:58like Match.com and blend it with the simplicity of a service like Tinder.
0:43:58 > 0:44:01Bristlr is our first product.
0:44:01 > 0:44:04Bristlr matches those with beards
0:44:04 > 0:44:06to those who want to stroke beards.
0:44:06 > 0:44:09THEY LAUGH
0:44:11 > 0:44:13Don't worry, it gets better. It's fine.
0:44:15 > 0:44:17So, Bristlr has been a huge success.
0:44:17 > 0:44:19Since we launched a little over a year ago,
0:44:19 > 0:44:23we've welcomed more than 150,000 people to the platform.
0:44:23 > 0:44:26We've made more than half a million matches between them,
0:44:26 > 0:44:29and I've personally had a bunch of wedding invites,
0:44:29 > 0:44:30which is just really lovely.
0:44:32 > 0:44:36We've received national and international press coverage.
0:44:36 > 0:44:40The Evening Standard put us alongside apps like Uber
0:44:40 > 0:44:43as one of the top 30 apps for Londoners,
0:44:43 > 0:44:45and Time Out New York listed us
0:44:45 > 0:44:48as one of the top ten apps for New Yorkers.
0:44:48 > 0:44:50Now we're looking to expand.
0:44:50 > 0:44:54I'm here to ask for £80,000
0:44:54 > 0:44:58for 15% of M14 industries
0:44:58 > 0:45:01to allow us to grow beyond beards.
0:45:01 > 0:45:04We are opening up our technology
0:45:04 > 0:45:08to allow anyone or any company to have their own
0:45:08 > 0:45:13fully managed dating or social app, and...
0:45:13 > 0:45:14it's just very exciting.
0:45:14 > 0:45:17So, thank you very much for your time.
0:45:17 > 0:45:19I look forward to your questions.
0:45:21 > 0:45:26A pitch with passion from hirsute hopeful John Kershaw.
0:45:26 > 0:45:30He wants £80,000 in return for a 15% share
0:45:30 > 0:45:34of his tech business providing bespoke dating and social apps.
0:45:36 > 0:45:39Deborah Meaden already seems smitten.
0:45:42 > 0:45:44Can I just tell you, I love that as a pitch?
0:45:44 > 0:45:46I always say to people,
0:45:46 > 0:45:48"Just speak what you know about and do it with passion."
0:45:48 > 0:45:51And to end up with saying, "Well, it's just so exciting,"
0:45:51 > 0:45:54that's just... I love it. You've got me already.
0:45:54 > 0:45:56Right. So, at the moment, you're trading.
0:45:56 > 0:45:57Are you making money?
0:45:57 > 0:46:01Describe what the business is doing at the moment.
0:46:01 > 0:46:03As far as Bristlr is concerned, it's turning over, give or take,
0:46:03 > 0:46:05£1,000 a month.
0:46:07 > 0:46:09But it's our proof of concept.
0:46:09 > 0:46:12We set it up, we pushed it and it's just rolling
0:46:12 > 0:46:13and bringing in this much money.
0:46:13 > 0:46:16As far as M14 is concerned, we have one of the largest
0:46:16 > 0:46:19radio networks in the UK on board fully signed up.
0:46:19 > 0:46:22We've signed with one of the largest publishers in the world
0:46:22 > 0:46:24to start developing for them.
0:46:26 > 0:46:28These contracts that you've just signed,
0:46:28 > 0:46:29you mentioned you signed one with...
0:46:29 > 0:46:31Who was it?
0:46:31 > 0:46:33I can't say the name.
0:46:33 > 0:46:35Right. So like Global?
0:46:35 > 0:46:38That could be them, yes.
0:46:38 > 0:46:39Is it them?
0:46:40 > 0:46:41Yes.
0:46:44 > 0:46:47If you've just broken my NDA, I'm going to be so mad.
0:46:50 > 0:46:53- OK.- I'd like it known that he said that, I didn't.
0:46:54 > 0:46:56I am bad at secrets, I'm sorry.
0:46:56 > 0:46:57It didn't take long, did it?
0:46:58 > 0:46:59You guys are good.
0:47:00 > 0:47:02- So...- To be fair, you're rubbish.
0:47:02 > 0:47:05- It's not that we're good, you're rubbish.- Oh, come on now!
0:47:05 > 0:47:07You crack too easily. You crack too easily.
0:47:07 > 0:47:09I quite like the fact that we're good.
0:47:12 > 0:47:15OK, so you've signed with a radio business.
0:47:15 > 0:47:17By the way, I think that's quite good.
0:47:17 > 0:47:20What will that give you in terms of income?
0:47:20 > 0:47:22We're anticipating it to be
0:47:22 > 0:47:26- in the region of tens of thousands per year in recurring revenue.- OK.
0:47:30 > 0:47:33The entrepreneur's disclosure of a potentially profitable
0:47:33 > 0:47:38media partnership appears to be wooing Peter Jones.
0:47:38 > 0:47:40But is retail tycoon Touker Suleyman
0:47:40 > 0:47:41playing hard to get?
0:47:44 > 0:47:46- Why dating apps?- Um...
0:47:46 > 0:47:47I'm in the retail world.
0:47:47 > 0:47:51There's a platform called Shopify.
0:47:51 > 0:47:55- Yes.- And if you're a small business, you can go on Shopify,
0:47:55 > 0:47:59they have their own website and they've made a fortune...
0:47:59 > 0:48:02- Yes.- ..because the market is growing.- Yeah.
0:48:02 > 0:48:07The fact you're focusing on dating apps, I mean, surely,
0:48:07 > 0:48:09once most of them go out of business
0:48:09 > 0:48:13and the top 20 or 50 apps are there,
0:48:13 > 0:48:15you're going to run out of business.
0:48:15 > 0:48:19So, in the same way we went from Bristlr to dating,
0:48:19 > 0:48:24we see it as progressing from dating into social apps.
0:48:24 > 0:48:27- Right.- So, for example, we have a client called Bump
0:48:27 > 0:48:30and they are for single mums and new mums
0:48:30 > 0:48:32to find other single mums and new mums.
0:48:32 > 0:48:34So that's not a dating site,
0:48:34 > 0:48:36but the way you matchmake people with similar interests,
0:48:36 > 0:48:39that's kind of where we see that growing.
0:48:41 > 0:48:42John's forward-thinking
0:48:42 > 0:48:45has certainly clicked with Touker Suleyman.
0:48:45 > 0:48:48But can he convince Sarah Willingham
0:48:48 > 0:48:53that his app design company can scale up to a serious size?
0:48:54 > 0:48:59How many people realistically do you think you can reach
0:48:59 > 0:49:02and what does that mean in terms of revenue?
0:49:02 > 0:49:04- Paint me a picture. - So, in terms of dating,
0:49:04 > 0:49:07we think the market cap that we can reach
0:49:07 > 0:49:08in the next several years
0:49:08 > 0:49:11is about 10,000 individual partners,
0:49:11 > 0:49:14which would turn over around about 100 million.
0:49:18 > 0:49:20Based on what?
0:49:20 > 0:49:21Based on the size of the industry
0:49:21 > 0:49:25and the number of niche websites that have sprung up
0:49:25 > 0:49:28and the amount of demand already out there.
0:49:28 > 0:49:33- But, John, you're talking about finding 10,000 Bristlrs.- Yeah.
0:49:33 > 0:49:35- Is that really possible?- Yes.
0:49:36 > 0:49:38Some will be Bristlr's size,
0:49:38 > 0:49:39some will be ten times the size
0:49:39 > 0:49:42and some will be ten times less. We're not talking about...
0:49:42 > 0:49:45No, I understand that. But the ones that are ten times the size are not going to use you.
0:49:47 > 0:49:50- They would start with us because... - They would leave you.
0:49:52 > 0:49:54There's no real need to leave M14
0:49:54 > 0:49:56because for them to run their own technology,
0:49:56 > 0:49:58for them to have their own developers
0:49:58 > 0:50:00and for them do their own customer support
0:50:00 > 0:50:04would cost more than we are actually effectively billing them
0:50:04 > 0:50:06because we have the economies of scale.
0:50:08 > 0:50:11The self-assured app entrepreneur
0:50:11 > 0:50:14appears to have an answer for everything.
0:50:14 > 0:50:18And it's prompted Touker Suleyman to make up his mind.
0:50:19 > 0:50:21You're very credible.
0:50:21 > 0:50:24- Thank you.- I want to get my toe in the water with you.
0:50:25 > 0:50:27OK.
0:50:27 > 0:50:28I'll make you an offer.
0:50:29 > 0:50:34I am willing to put up half the money for 12.5%.
0:50:34 > 0:50:37If one of the other Dragons wants to join me in this journey,
0:50:37 > 0:50:39that is my offer.
0:50:39 > 0:50:40OK, thank you.
0:50:43 > 0:50:45A proposition from Touker Suleyman,
0:50:45 > 0:50:47not just to the entrepreneur,
0:50:47 > 0:50:50but to the rest of the Den.
0:50:50 > 0:50:52So far, online innovator Nick Jenkins
0:50:52 > 0:50:54has kept his counsel.
0:50:54 > 0:50:57Is he about to declare his hand?
0:50:59 > 0:51:01I see the beauty of what you're trying to achieve
0:51:01 > 0:51:04and I know it makes a lot of sense for me.
0:51:06 > 0:51:08I'd like to make you an offer.
0:51:10 > 0:51:14I'd like to make you an offer for £80,000 for 20% of the equity.
0:51:15 > 0:51:17- That will be my offer.- OK.
0:51:20 > 0:51:24A second bid for the entrepreneur's business as Nick Jenkins offers
0:51:24 > 0:51:26the full cash,
0:51:26 > 0:51:30but bypasses Touker Suleyman's suggestion to split the investment.
0:51:32 > 0:51:34Which way will Sarah Willingham go?
0:51:37 > 0:51:41I'd also like to work with you and I'd also like to invest.
0:51:44 > 0:51:47I will offer you all the money
0:51:47 > 0:51:49for 20% of the business.
0:51:49 > 0:51:52Or I will offer you, actually,
0:51:52 > 0:51:54on the same proportion,
0:51:54 > 0:51:59any proportion with any number of Dragons,
0:51:59 > 0:52:03but I would just like to go on this journey with you.
0:52:03 > 0:52:04OK, thank you.
0:52:08 > 0:52:10Three potential matches.
0:52:10 > 0:52:15Touker Suleyman has offered half the 80,000 for 12.5%,
0:52:15 > 0:52:19Nick Jenkins the full amount for 20%,
0:52:19 > 0:52:22and Sarah Willingham is so keen to do a deal
0:52:22 > 0:52:26she tables an open-ended offer to split with any of the Dragons
0:52:26 > 0:52:28on any of their terms.
0:52:28 > 0:52:31What's up Peter Jones's sleeve?
0:52:31 > 0:52:34John, I'm going to tell you where I am,
0:52:34 > 0:52:37because I own a company called BrandPath and BrandPath Commerce.
0:52:37 > 0:52:39And we are now...
0:52:39 > 0:52:43I don't know... We're a top ten global player in e-commerce.
0:52:44 > 0:52:48And I was sitting here thinking, "Have I got a conflict of interest?"
0:52:50 > 0:52:53But I've come to the conclusion that, regardless of whether I have
0:52:53 > 0:52:55a conflict of interest,
0:52:55 > 0:52:57I'd like to invest in you.
0:52:59 > 0:53:03You are probably one of the most appealing individuals
0:53:03 > 0:53:06to invest in that I've seen in the Den for a long time.
0:53:06 > 0:53:08- I think I'm blushing.- Genuinely.
0:53:08 > 0:53:09Thank you very much.
0:53:11 > 0:53:16With your level of knowledge of where to take this business
0:53:16 > 0:53:18and the support that I could give,
0:53:18 > 0:53:20I think we'd be a really good team.
0:53:22 > 0:53:24So I'm going to make you an offer.
0:53:27 > 0:53:30- I'm going to offer you all of the money for 20%...- OK.
0:53:31 > 0:53:33..but, likewise, if Nick would want to share it,
0:53:33 > 0:53:37I'd be very happy to share the investment with Nick, as well.
0:53:43 > 0:53:44I'd be very happy with that.
0:53:44 > 0:53:46I think that you'd have a much greater chance of success
0:53:46 > 0:53:48with the pair of us working on that.
0:53:48 > 0:53:50Thank you.
0:53:52 > 0:53:56Peter Jones and Nick Jenkins join forces in a strategic bid
0:53:56 > 0:53:58to seal a deal.
0:53:58 > 0:54:02But their equity demand is 5% more than John wanted to give away.
0:54:04 > 0:54:06Is Deborah Meaden about to up the ante?
0:54:09 > 0:54:10So I'm going to make you an offer.
0:54:13 > 0:54:15And I'm going to match these guys.
0:54:15 > 0:54:17I'm going to make it really hard for you.
0:54:18 > 0:54:20I'm going to say exactly the same thing,
0:54:20 > 0:54:23which is that I'm going to offer you all of the money, which is 80,000.
0:54:23 > 0:54:25I want either 20% of the business
0:54:25 > 0:54:28or I'm happy to share with any of the other Dragons.
0:54:28 > 0:54:30That's my offer.
0:54:33 > 0:54:35A major coup for John,
0:54:35 > 0:54:40as all five Dragons are feeling the love and showing the money.
0:54:40 > 0:54:43But as Nick Jenkins and Peter Jones join forces
0:54:43 > 0:54:45to try to clinch the deal,
0:54:45 > 0:54:49it's time for a tenacious Touker Suleyman to get tactical.
0:54:51 > 0:54:54I'm going to offer you all the money...
0:54:54 > 0:54:56- I thought you've already made an offer?- No...- You did.
0:54:56 > 0:54:59I did, and I can change my offer, can't I?
0:54:59 > 0:55:02- Don't look at me.- I can change my offer.- Yeah, yeah.
0:55:02 > 0:55:03- PETER:- You want to change your offer now?
0:55:03 > 0:55:05I want to change my offer.
0:55:05 > 0:55:08I want to give you all the money for 15%.
0:55:09 > 0:55:11That's shaken it up a bit, hasn't it?
0:55:14 > 0:55:15Wow.
0:55:15 > 0:55:17I need to put this in a spreadsheet.
0:55:17 > 0:55:23Realistically, to summarise, I think you've got the pair of us for 20%,
0:55:23 > 0:55:26and then the other combinations would be either Deborah on her own,
0:55:26 > 0:55:28Sarah on her own...
0:55:28 > 0:55:30- Sarah and myself.- Yep.
0:55:30 > 0:55:32Or you've got all of it with Touker.
0:55:32 > 0:55:34Or I would share with somebody
0:55:34 > 0:55:37if somebody felt they wanted 7.5%.
0:55:37 > 0:55:38I won't do that.
0:55:38 > 0:55:41- So it's either me as an individual or me and Sarah.- OK.
0:55:42 > 0:55:45OK. I'm going to pace around anxiously for a bit.
0:55:45 > 0:55:47Do that.
0:55:47 > 0:55:51It's the entrepreneur who is firmly in the driving seat,
0:55:51 > 0:55:54and the Dragons who must sweat it out.
0:55:55 > 0:56:00Will he go for a deal that means giving away 5% more equity than he intended,
0:56:00 > 0:56:02or opt for Touker Suleyman,
0:56:02 > 0:56:06whose revised bid for a 15% stake undercuts them all?
0:56:12 > 0:56:14I've finished computing.
0:56:14 > 0:56:17Thank you all so much for the offers.
0:56:18 > 0:56:21It's a really nice sort of vote of confidence.
0:56:25 > 0:56:28But I think just by, sort of, experience...
0:56:31 > 0:56:32..I'll have to go with you two.
0:56:34 > 0:56:35So I'd like to accept your offer.
0:56:35 > 0:56:38- Great.- Well done. Congratulations.
0:56:38 > 0:56:39- Thank you very much.- Well done.
0:56:39 > 0:56:41That was unexpected.
0:56:41 > 0:56:43Well done. You're very credible.
0:56:43 > 0:56:45- SARAH:- Yeah, well done. - Thank you very much.
0:56:45 > 0:56:48Well, I best get back to work. All right.
0:56:48 > 0:56:49Thank you very much.
0:56:50 > 0:56:52He was great.
0:56:53 > 0:56:56A thrilling finish for the app entrepreneur
0:56:56 > 0:56:59as he picks his perfect investment partners.
0:57:01 > 0:57:03It definitely hasn't sunk in yet.
0:57:04 > 0:57:08I think what happened in there was amazing and wonderful
0:57:08 > 0:57:09and I'm very lucky.
0:57:09 > 0:57:11Congratulations, guys. I'm very jealous.
0:57:11 > 0:57:13You know when you have to smile and say congratulations
0:57:13 > 0:57:15and you're like that?
0:57:15 > 0:57:17- SHE GROANS - I'm so happy for you.
0:57:17 > 0:57:19No, I get why. I get why.
0:57:19 > 0:57:20Brilliant.
0:57:29 > 0:57:31Business is not an exact science.
0:57:31 > 0:57:33Investing is a matter of judgment,
0:57:33 > 0:57:35and it's no surprise that we normally see
0:57:35 > 0:57:38the Dragons disagreeing with each other.
0:57:38 > 0:57:40Not tonight.
0:57:40 > 0:57:44We've seen four unanimous rejections and then, finally,
0:57:44 > 0:57:47unanimous enthusiasm for John and his dating app.
0:57:47 > 0:57:50It's the outcome that all entrepreneurs dream of
0:57:50 > 0:57:52when they enter the Den.
0:57:54 > 0:57:56Nobody buys a snack that does that.
0:57:56 > 0:57:58Coming up next time...
0:57:58 > 0:58:02Physical orders written down, confirmed, what have you got?
0:58:02 > 0:58:05If anyone of my MDs was ordering a Michelin star meal,
0:58:05 > 0:58:08I'd throw him out the nearest window.
0:58:08 > 0:58:11No. No. Good try, but that doesn't answer my question either.
0:58:11 > 0:58:13If you develop a gorilla brand,
0:58:13 > 0:58:16if you crack that, then you make a fortune.
0:58:16 > 0:58:17We didn't start off on the right foot.
0:58:17 > 0:58:20I think, in the excitement, you got a bit carried away with it.
0:58:20 > 0:58:22Don't blow it. Go and talk to the wall...
0:58:22 > 0:58:24- Go and climb the wall.- ..sensibly.