Episode 15 Dragons' Den

Tonight on Dragons' Den...

-Whoa!

-Quite good, isn't it?

You haven't got a very unique product.

So I think you're vulnerable.

I'd like to make you an offer.

I'd also like to work with you and I'd also like to invest.

This is like a fundamental part of the business.

What does the product cost to make?

I'll make you an offer.

So I'm going to make you an offer. And I'm going to match these guys.

I'm going to make it really hard for you.

I'm not even going to waste my breath or my time.

I'm out.

Welcome to Dragons' Den,

a place of aspiration and perspiration,

where entrepreneurs with big business dreams

meet our wealthy investors, who have big cash to invest.

Our first entrepreneur into the Den is the self-assured

Steven Reynolds.

I'm excited. I'm quite happy

with the information that I have and the position that the business is in.

So I'm feeling quite confident.

And there's one Dragon he's got his eye on.

Of course, I do quite like Peter because he's been the longest-serving Dragon and

he's made some good investments in the past.

But he's also missed a few opportunities, as well.

Hopefully, this won't be one he passes up on.

My name is Steven Reynolds and I'm the managing director of Micro Fitness.

Today, I'm looking for £100,000 for 15% equity.

It can be argued that the best businesses are those that benefit society.

Perhaps when they can tackle a £15.8 billion problem in the UK,

or one that costs the NHS 4.2 billion each year.

The problem is obesity.

Particularly childhood obesity.

Yet we have no single market leader in this industry.

Micro Fitness is a multi-award-winning fitness company for children.

We deliver 21 different fitness experiences designed for ages three plus.

And offer our services to over 400 schools, organisations,

special needs groups and councils across Scotland.

Ultimately seeking to become the world's leading fitness company for

children. Some of these experiences include the mobile gym,

scooter fitness and zorbing, as well as more traditional ones like yoga,

Zumba and martial arts.

This year, we have enjoyed exceptional growth across a number of markets.

Just now, we're on track for over 200,000 of sales, and one market in

particular that's rapidly growing are our council contracts,

where they bring us into their sports centres to organise events on

a regular basis. In this market alone,

we anticipate sales growing exponentially in the next 12 months and we

need your investment today in order to manage this.

Your investment will go towards four key areas.

The first is for a second office based in Manchester,

to establish a foothold in England.

The second is more vans and equipment.

The third, the staff, and the fourth is advertising and marketing.

So, if you're looking for a low-risk investment that tackles one of the

most major health epidemics of our time,

then I would love to welcome you onboard.

Thanks for listening, I would like to invite anyone up to either try

our zorbing or archery.

-Absolutely.

-Can we get Touker in the zorb?

-No, I want to get in the zorb.

Hoping to persuade the Dragons to exercise their financial muscle...

Deborah, Sarah, some archery perhaps?

Oh, yeah, actually. I've never done archery.

..is Steven Reynolds from Sterling.

This is your chance to shoot Peter without any explanation.

He's asking for £100,000 in return for a 15% stake...

..in his kid-friendly mobile-fitness company.

Boys, don't break Nick.

Do not break Nick.

What's happened here?

You all right there, Nick? That's like an anti-birthing chamber.

-I've been reborn!

-DEBORAH LAUGHS

Sarah Willingham's on target.

-Oh, nailed it.

-It's quite good, isn't it?

But will Steven score a bull's-eye with his investment opportunity?

A lot of fun.

Deborah Meaden gets the ball rolling.

So, Steven. You've got 400 schools and organisations.

Yeah.

Are you making any money?

Yeah, it's been profitable since the first year.

Three years ago, our turnover was at 81,000.

And we had a net of 39.

The year after that, it went up to 112,000.

And a 21 net.

The year after that, I had to make some structural changes in the company

and we took a little hit on that.

But thanks to those changes, we're now reaping the rewards.

We're over 200,000 this year, as I say.

With 125 growth and a 45 net.

So let's talk... Let's look into the future, then. What does that look like going forward?

Going forward, next year, we're anticipating 720,000 with a gross of 330

and a net of 125.

The year after that, we are looking at 1.2 million, with a 550 gross.

And a 260 net.

The fitness entrepreneur is forecasting healthy profits,

but Steven's prediction of a leap in turnover of £500,000 next year

is going to take some justifying to Peter Jones.

Steven, you've got a huge jump, haven't you?

Which is... Which is always typical when somebody comes in and pitches.

They're never going to be realistic and give a realistic figure,

-they're going to give a figure that's...

-I would stop you there, actually, Peter.

These figures are realistic and I'll happily go on to explain that.

We don't just operate in schools or local authorities,

we operate in multiple markets successfully.

But what are you going to go from? 200,000 of sales to what?

-To 720.

-Amazing.

Yeah, I would be disappointed if that's all we hit,

-if I'm being honest with you.

-And do you believe pigs fly?

Sorry?

-They do in my world.

-Yeah.

No, I have no doubt.

Simply because of... I've spent five years

learning and making wrong moves.

And now I have what I believe is the perfect business model moving

forward. What we need today is investment to buy

more equipment and vans and an office space. But most importantly...

But, Steven, it's got to be a lot better than that.

Because you are currently turning over...

There's a technical term, I'm going to call it diddly squat.

-Yeah.

-And you don't have the run rate to support £800,000 worth of

forecasted sales.

How so?

You are forecasted to do 200,000.

-Yeah.

-Where's your 800,000 run rate?

Erm, I might have missed it out. It's the pending contracts that I'm talking about with the

-local authorities.

-What contracts have you won that's going to change?

Yeah, I'll show...

-So what have I got here?

-The first two contracts you see there are the signed

ones from South Lanarkshire and North Ayrshire.

The ones behind it are the ones that are pending.

If we land Glasgow successfully,

we're looking at £500,000 a year with that single customer in a

single market, bearing in mind we operate in multiple markets.

Right.

Steven, you have no proven business model whatsoever.

You've just got an agreement which you've agreed to trial.

If it doesn't work, you'll have a cooling off period and nothing will

happen going after it. You have no proof.

This actually doesn't give you any validation of your business.

-We've got the sales for it. I mean...

-You haven't, because you haven't done anything with it.

You're not looking at the sales, you're looking at a contract.

The sales started in February with a pilot programme at Broadwood Stadium and North Lanarkshire Council.

Yeah, but not these two contracts.

Yeah. I'll go through the story if you want to know the answers.

No, it would be really important. Because at the moment, I'm seeing a contract that's only just signed.

-Yeah.

-When you went to the back,

you were showing me and proving to me why your business has delivered,

and going to deliver, 800,000.

-Yeah.

-I need to know why this will prove that to me.

Because we have just formalised our set-up.

So we went back to the councils and said, "We need this agreement signed,"

and that's why they've just been signed.

So, how much business have you done with South Lanarkshire Leisure?

With South Lanarkshire Leisure, they have just started.

They're starting at the end of June, the start of July.

-Their first events are.

-So you haven't done anything with that one?

-The tickets are on sale just now.

Have you done anything with that one? There's a yes or no answer.

-Yes.

-So what business have you done with this?

Around £4,000 of ticket sales pending for events that are about to come.

Contract two with North Ayrshire.

-What have you done with them?

-We're 2.5 with them.

2.5 with them. Falkirk Community Trust, how much business have you done with them?

And how much money have you taken?

We're sitting at around 6.5 with them.

OK. So everything I have in this file which you gave me to demonstrate and

to prove that you have a business that's going to go from 165,000 to

800,000. You've shown me the contracts that you've signed are

giving you £13,000.

In total, it's 35,000 with North Lanarkshire.

Where's the £500,000 contract you alluded to?

That... That's based on solely the Glasgow one that we're about to sign.

-And that's the one at the back?

-Yeah, the pending contracts.

OK. So, it's the one at the back that actually doesn't say anything, but it's just got a photocopy of...

-To represent what's about to be signed, yeah.

-It's just like that?

-Yes.

Steven, do you know what? I'm not going to be very long.

I don't like it.

OK. Sorry to hear it.

I think you've just demonstrated to me that you're not going to go from 200 to 800,000.

Anybody can do this. I don't think you have something particularly unique.

You've only just signed the contracts.

So I'm not even going to waste my breath or my time, I'm out.

OK. Thanks for your input, Peter.

He was the Dragon Steven saw as his ideal investor.

But an irritated Peter Jones swiftly exits the negotiations.

Does the business proposition make financial sense to e-commerce mogul

Nick Jenkins?

Can I talk to you about cash flow?

Because, inherently, the cash flow in is quite good.

You're getting paid in advance effectively for these things, aren't you?

We don't. It's ten days after the event.

OK, ten days after, but you're paying about 30 days after to the council.

-Correct.

-And then your staff, you're probably not paying on the day.

-Yeah. End of the month.

-So, you talked about a second office in Manchester.

Scratch that, you don't need it. Talked about buying vans, scratch that. This year, rent them.

You talked about staff.

Well, you hire those and pay those on a daily basis.

That's no cash-flow issue.

Deliver on these, get your £750,000 worth of turnover,

and then you won't need to raise any money.

And for that reason, I'm out.

OK. Thanks for your input.

Another blow for Steven as Nick Jenkins offers advice,

but declines to invest.

Will Touker Suleyman or Sarah Willingham be more prepared to part

with their cash?

Steven.

I believe this is not an investment for me.

Because I think it's too small.

I think a lot of it is based on crystal ball.

I think it's a good little business you're running,

but I'm not going to invest.

-OK. I appreciate your time. Thank you.

-I'm out.

Steven, you've got a lot of pending stuff there.

If you can prove that, you've proven the business model,

it's been going for six to 12 months.

You know, you can be asking me for money for a lot higher valuation once

that's proven and you've got that revenue model set.

So, I'm not going to invest,

but I hope you get there because I think it's a great thing for kids,

I really do. So, good luck, but I'm afraid I'm out.

Four Dragons down, and after a pitch with some tetchy exchanges,

it's time for a bit of straight talking from Deborah Meaden.

You probably don't know, but you do come across as a little bit spiky

when you're talking to investors.

You know, engage with them.

Don't push against them.

You know, because you've got five people here looking to put money

into businesses. Anyway,

expansion for you right now outside of Scotland is the wrong thing to do.

Consolidate.

Get these landed.

-OK.

-Do that first before you do any more, please.

OK, Deborah, thanks again for that.

For me, your whole expansion plan, it's just too early.

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

I appreciate it, guys. Thank you.

So, Deborah Meaden blows the final whistle on Steven's investment hopes.

He leaves the Den bruised, but ready to fight another day.

Didn't go as I expected.

It was pretty rough. Pretty rough.

I always think it's an interesting strategy to try and pit

yourself against the Dragons, as opposed to engaging.

I think Peter took a rather aggressive approach to analysing the business.

And unfortunately, the other Dragons ended up picking up on the

negativity that I think I was ultimately emitting by the end of it.

Next into the Den is Matthew Statham,

an engineer turned entrepreneur.

Every engineer likes to solve a problem.

I just needed a problem to solve that was unique, and this is what I think

I've stumbled across.

And Matthew has engineered a plan to secure Dragon investment.

My strategy, I think, is really to get them to catch a vision.

This business is not a small business.

And if it grows the way I think it's going to grow,

it'll be a really good investment for them.

Hi.

Excuse me, while I just light my wood-burning stove.

My name's Matthew and I've come to talk to you about the

AutoBlaze Stove Ignition System. I'm seeking £150,000 investment for a 15% equity

stake in the company. Owning a wood-burning stove is becoming more and more popular these days

and considered an attractive additional feature to the modern-day home.

But the hassle of lighting a wood-burning stove can be

off-putting to some people more used to an automatic or instantaneous

central heating system.

AutoBlaze is a fire lighting system which is built into the stove and

can fully establish the fire in just five minutes.

You simply close the stove door,

press the remote control and it will light wood just on its own.

AutoBlaze uses superheated hot air which is blown onto the fuel and can

light wood very quickly.

There's nothing actually new about using hot air to light fuel,

but nobody's integrated a fan-based hot air ignition system into a

wood-burning stove before.

So, AutoBlaze is quick and convenient to use.

It's cheap to run and it's eco-friendly.

Thank you for listening. Any questions?

An innovative stove ignition system is the offer from Matthew Statham,

who wants £150,000 in exchange for a 15% stake.

But has his fire-based business ignited Deborah Meaden's interest?

I think you need to probably describe to me better how it works.

So, the thing that we're looking at

is the thing that's at the back of those logs?

That's right. If I can just turn this round for you.

You can see there's a fan unit with a servo operated vent at the back of

-the stove.

-Right.

-And the fan pushes air into the back of the stove at

-500 degrees C.

-So this isn't a retro...

This isn't something I could buy for my stoves at home?

This isn't a retrofit.

This is something you'd install into a stove and you would sell auto

igniting wood-burning stoves.

We're selling to the stove manufacturers.

-OK.

-So, it's an optional extra that they can fit.

It would retail for approximately £500.

-OK.

-Although technically you could actually put one of these units

retrofitted to a stove, in practice, it's too much work.

I'm really struggling. I'm struggling to get excited about it.

Why?

Well, it's just... It's a bit boring.

It's just a... It's like an automatic lighter for a...

stove, isn't it?

Yes.

Isn't a stove about the fact that actually you put wood in the stove

-and light it?

-I think some people like the whole Man Friday thing of lighting

the fire, and actually that's part of the attraction of a stove for some people.

There are some other advantages to it.

European requirements are now coming into place where you have to make your stoves more efficient.

Is it going to make it more interesting?

Yes, it is, because at the moment, with new European legislation coming out,

we're getting to the point where stoves are having to be so efficient

that this becomes more and more necessary.

-You've just made it more boring...

-Because if you've got a coal flue on your stove,

you open the stove, you try and light it and instead of the smoke going up

the flue, it comes out into the room.

You've come up with a fan that with a remote control turns on a fire.

Well, it turns on the fire, but after five minutes, it goes to sleep.

You've just described your pitch to me.

Peter Jones is clearly not a fan of the fan-based fire ignition system.

Will Nick Jenkins give the idea a warmer reception?

I can see where you're coming from with this because

I actually like lighting a fire.

I take a great deal of satisfaction in lighting my...

Setting it and lighting it.

But I can also... I also hate having a smoky room.

I really do. I hadn't appreciated the thing about the increased regulation

in the baffling.

-What's baffling?

-The fact that you've got to make the smoke do that before

-it goes up through the flue.

-Are we really getting that deep?

-Yeah, we are.

-Honestly, I feel like I'm in the middle of a dream.

Matthew, what are you selling?

Are you selling something that lights the fire for you,

or are you selling something that avoids smoke coming into the room?

I'm selling both.

I'm selling an optional extra to wood-burning stove manufacturers so they

can help grow their market.

Right. So now I'm a consumer.

The stove seller is not going to say to me,

"Oh, if you buy that stove, though, loads of smoke will come into the room."

-No, that's right.

-But I've got a £500 thing that you can put on the

back... That conversation is never going to happen.

The only conversation they can have with you is,

"We've got this nifty little thing,

"500 quid, it will light the fire for you."

And I honestly, honestly think that's a tough sell.

Sarah Willingham is struggling to see the stove ignition device

selling like hot cakes.

But Touker Suleyman wants to know more about Matthew's order book.

How many have you sold or got orders for?

I've sold 200 stove lighting systems.

200. And who have you sold them to?

-ESSE, stove manufacturer.

-So, one stove manufacturer.

-Yeah.

-How many have you got forward orders on?

-I haven't at the moment.

-You haven't.

So my commitment at the moment is a ten-week lead time.

What I'd like to be able to be in a position is to hold stock.

-Fine, but you've just valued your business at...

-One million quid.

-..approaching £1 million.

-Yeah.

On what basis?

On the basis of the potential.

I believe there is a sales forecast that I have which will bring us to a

position where...

..in year four, it's making a net profit of £200,000 a year.

-In year four?!

-Yeah.

-But we're in year one.

At £1 million,

I think it's overvalued.

Touker Suleyman pours cold water on the price tag the fire-starting

entrepreneur has put on his business.

Can he convince Deborah Meaden that his product has potential?

So, how much does that cost to make?

Well, I'm not in a position to reveal the net cost to sales because

this is in a public forum.

I can reveal that to you afterwards.

-But what I can say is...

-Hold on. You can tell me afterwards.

What? Afterwards... After I've invested?

No.

Well, I suppose... I suppose if you're in the situation where you want to

make a decision now, what I can assure you...

What I can assure you is the profit margin is sufficient to recover

investment and a healthy profit margin.

-Oh, Matthew.

-I can tell you what my sales are.

I can tell you...

No, but... No. No, this is a...

This is like a fundamental part of the business.

What does the product cost to make?

Yeah.

What is your cost of sales?

-I'm stumped.

-OK.

-I'm staggered.

-I'll...

-I'll tell you how much it costs.

-There we were going along quite nicely,

-having a lovely conversation about wood-burning stoves.

-It costs me £120 to make the system.

-Thank you!

And what do you sell them to the stove manufacturers for?

-£250.

-£250.

So if I was buying a wood-burning stove and I wanted one of these,

-it would cost me an extra £500.

-I think so, yes.

-Right.

Thank you. I now understand the mechanics of the business.

Yeah.

Withholding key company information from five fiery Dragons is always a

high-risk strategy in the Den.

Has Matthew burnt his bridges with Nick Jenkins?

I think...

I think you've got something that, for all the reasons that you've said,

will be useful for solving the problem of smoky rooms.

I don't see a huge benefit in lighting fires,

that is because the inner pyromaniac in me just says you're sucking the

fun out of it.

But I also think you're going to have to reduce the cost of production

down dramatically if you're going to get these stove manufacturers

thinking, "You know, I'd rather buy from him than try to circumvent his system."

And that's going to take quite some time.

And I'm afraid this is too much of a slow burner for me, so I'm out.

Out-punning Peter Jones as he exits,

Nick Jenkins rules out an investment in the fire-ignition system.

And Touker Suleyman has made up his mind.

Personally, I...

I think you've got a very good idea.

I honestly believe the stove manufacturers will solve the problem.

You're not going to be the one that's going to save everybody.

I think you're overvalued.

For that reason, I'm out.

I'm going to say where I am. I think I'd rather eat salad every day for

the next year

than invest in something like this. I just... I don't get it.

You're pimping up something that I just don't think needs pimping.

And it's odd.

And for that reason, I'm out.

No surprises there,

as Peter Jones fails to find a spark in a potential business partnership

and walks away from the deal.

Has Sarah Willingham overcome her earlier concerns?

Matthew, I have a fundamental issue with the fact that you are trying

to sell it to stove manufacturers that are then going to try and flog

this to the consumer because they may,

on the off-chance, have a problem before

they know they've got a problem.

I'm not going to invest in it, so I'm out.

Four Dragons down.

Only Deborah Meaden remains.

She's shown the most enthusiasm for the product so far.

Is she primed to offer or exit?

You're actually in a great position.

You don't have that many manufacturers to talk to...

..you're the only person with the solution,

and what would be even more clever

is if you can find a way of making it a retrofit.

-Yeah, that's the key.

-Because that is the absolute key.

That would revolutionise your business.

Yeah.

Keep going.

You'll sell some. Absolutely.

And I hope that you find a way of producing it in a cheaper way.

But, I'm afraid I... I...

As it is, as it stands, I'm out.

Thank you for your feedback. Thank you very much.

-All right. Thank you.

-Good luck, Matthew.

Matthew's trial by fire is over.

He leaves the Den without the cash he came in for

and without a convert in Peter Jones.

Yeah, Peter, I think

was obviously bored.

What kind of a man are you, Peter?

-It's fire.

-Well...

-I found that incredibly boring.

-Did you? I didn't.

-I don't know whether you picked that up, but...

-DEBORAH LAUGHS

It didn't excite him.

Clearly, he didn't catch the vision, and I understand that.

Hoping for more luck in perking up Peter Jones

with his eureka business idea

was Cambridgeshire-based salesman Adam Stevenson.

He was looking to bag £60,000 in exchange for a 20% stake

in his six-pack inspired luggage range.

The inspiration came from statues, photographs,

as well as the iconic perfume bottle

that was sitting on my wife's dressing table at home.

E-commerce innovator Nick Jenkins felt an instant affinity.

I look at this, it's like looking in the mirror.

SARAH LAUGHS

Definitely stands out.

How many of these have you sold so far?

Just about 100 so far.

The stock only arrived a few weeks ago.

But a trickle of early sales wasn't the thing

weighing on Peter Jones's mind.

Do you have the one with boobs, as well, then?

Well, we looked at the female shape.

It's tricky. Because obviously, for obvious reasons,

you can't quite make the mould in shape.

I'm sorry. Your hand movements there were lovely.

-Well...

-"There were obvious reasons..."

To be fair, you've got two natural seats.

Why don't you put, like, a normal shape on there, a bit like mine.

Which is a bit of a...

A bit of a man boob and a bit of a tummy on it.

I've trademarked body-shaped luggage,

so I could do the lady one, which would be tricky.

I could do the beer belly one, we could do anything we want.

But this is the one that struck the chord.

But with the torso travel case costing just shy of £100,

Sarah Willingham felt the price could be leaner.

I actually think the 19 to 24-year-old really is your market.

The people who are older,

who have perhaps got slightly more disposable income

and who might want to spend nearly £100 on a suitcase,

I think will be put off by the six-pack...

..because they haven't got one.

And Nick Jenkins was also failing to see the mass market appeal.

Some will be bought as a novelty,

some will be bought by people who love themselves a lot

and possibly look like that.

You'll dominate the niche of slightly narcissistic people

and hen parties.

And with Nick Jenkins unconvinced,

it was an open-and-shut case for the remaining Dragon investors.

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

-I'm afraid I'm out.

-I'm out.

I just feel that there isn't a business there.

For that reason, I'm out.

Thank you.

So, Adam failed to inspire the Dragons

to buy into his creative vision,

but he's at least inspired Peter Jones to watch his waistline.

One thing it's made me do is change my lunch order.

I was going to have pizza, I'm now going to have salad.

-SARAH LAUGHS

-I just want some lettuce.

Still to come on tonight's show -

an ambiguous order...

Can I...? Can I talk to you about this agreement?

Yes.

It's nothing.

..and a very candid entrepreneur.

These contracts that you've just signed...

-Yes.

-Who was it?

I can't say the name.

Right. So like Global?

That could be them, yes.

Yeah. Is it them?

Yes.

Next into the Den is Falu Sha,

a Cheshire-based entrepreneur

who believes she has a winning new range for the food market.

I think the business and the products are amazing.

I don't believe the Dragons will have any issues with that.

I'm looking forward to excite them and excite their palates.

But will the Dragons be excited by the business opportunity?

My name is Falu and I'm here to talk about

an exciting new opportunity called Howdah Snacks.

I'm looking for £100,000 of investment monies

in return for 17.5% equity stake in my business.

I was born and brought up in India, in a small town near Mumbai.

I moved to UK in 1988,

and one thing which I missed most about India was the Indian snacks.

This is where the idea for Howdah originated.

Howdah Snacks are made using authentic and traditional recipes.

Ingredients are free from any artificial colours and flavours.

The journey began with launch in Harrods,

and then over the last two years

we've expanded into 150 plus fine food and farm shops.

Last 12 months,

I have focused solely on getting Howdah Snacks into a number

of new distribution channels.

At this moment, we've got an enquiry from airline industry,

a letter of interest in the region of one million packs per month

with a contract of 12 months.

And I have also secured a letter of intent

which is in its final stages of negotiation

with a distributor in Europe

to supply into European supermarkets across 600 stores,

and the launch order is in the region of £2 million.

And with that, I would like to thank you for your time,

and would like you to try some of the snacks

I've brought with me today.

Bringing a taste of Mumbai to the Den...

-Thank you.

-..is Falu Shah.

She's seeking £100,000...

..in return for a 17.5% equity stake.

Nick Jenkins has previously bankrolled

some lucrative snack investments.

He wastes no time in getting to the bottom of those big money orders.

This all sounds very, very impressive.

And particularly the orders that you've got lined up.

How much did you turn over in the last 12 months?

Last 12 months, we will finish at £90,000.

-90,000?

-Yes.

-OK.

And the gross margin?

Gross margin is 58.8%.

Yeah, OK. And where do you see sales going?

Cos it sounds as though,

from the talk about a million packets a month here

and then there's a couple of million there,

it all sounds fantastic.

What do you think is going to...? What are your projections for the next three years?

For the next 12 months, I'm looking at 2.1 million.

This is simply from...

The order from European distributor is in the region of 2 million.

The question is how confident can you be

about this business that you've got, that you've got coming up?

Lots of things can go wrong with supplying,

and that can all go horribly wrong.

It could, but the product has been now tested for two years,

packaging has been tested,

the supply channel is a well-established channel.

Yeah, OK.

And this deal is going to happen?

I've got a letter of intent.

-Can we see it?

-Yeah.

OK, that's the... That's the letter of intent.

-And that's an airline enquiry.

-Yeah.

OK. Thanks.

As Nick Jenkins pours over the fine detail,

global restaurant entrepreneur Sarah Willingham

is pondering where this snacks sits in a saturated market.

By the way, I think they're really nice.

-Thank you.

-I just want to say that.

Who are you trying to aim at?

Who do you want to buy these?

Who do you want to take them off the shelves?

It's mainly people who are looking at alternate snacks.

Those who are going down the world-food aisle looking for something different,

those who have travelled.

Actually, I'm just going to stop you there,

because you've just said exactly what I thought,

which is the world-food aisle.

Not every supermarket has that world-food aisle.

Now, if you are trying to get your Indian snacks

into that part of the supermarket,

that's a really small sector of the market.

World-food aisle, it's a beginning.

They will then venture into the mainstream aisle.

I mean, I've seen people trying to do this with Indian sweets

and Indian desserts,

and they've failed in the big supermarkets.

They've failed to get into the mass market

because it's such an alien taste to us.

We're just not ready.

Sarah Willingham's finding the investment proposition

hard to swallow.

And now king of outsourcing Touker Suleyman

predicts another problem for her bite-sized business.

What concerns me is how many other small entrepreneurs

are there like you, who are doing a very similar product,

who are out there,

who will be your competition.

If you went into Asian supermarkets,

there are similar-sounding products available.

So I would not say that people can't make it, they can make it.

But it's still... In England, to make similar, authentic snack

is not as easy.

I promise you one thing - the moment you get this into a supermarket,

and it works,

they'll be going to India directly and having their own label.

Because you haven't got a very unique product

that somebody can't copy.

So I think you're vulnerable.

If I was to put out four, five Indian snacks here,

you would see a point of difference

in the product and the quality of the product.

I'd probably see a difference, yes.

But what I'm saying is that, to the consumer,

who doesn't really know what to expect,

I don't think it'll make a lot of difference.

Stiff competition ahead

is the view of global manufacturing tycoon Touker Suleyman.

Now, Nick Jenkins wants to take Falu to task

over her paperwork,

and that £2 million order.

Can I...? Can I talk to you about this agreement?

-Yes.

-Or this letter of intent.

It's nothing.

It's basically a letter from a supplier

who wants to have the exclusive rights

to deal with a particular European supermarket.

It doesn't say that they're going to buy anything.

It's a five-year agreement and it has no minimums in it.

That's what we are negotiating with them.

The buyers have...

Well, but there's nothing.

This document, to me,

it doesn't have a lot of the things that I would expect there to be in there.

What it says is,

"Yeah, we would like to have the right to sell your product

"to a supermarket in Europe."

And also, by the way,

there's a clause in here that says that either party

can just break it off with a payment of £0 at any point in the future.

So, what is it?

We've been talking and working with this distributor

and we've developed a separate range of product

which the buyer wants.

Fine, but what do you think this letter of intent would give you?

The letter of intent...

We have reached a point where they are putting together

a contract for purchasing.

The letter of intent is simply to make sure

that that is going to happen.

But it doesn't make sure of anything.

If you're selling us on the likelihood of there being a deal...

I'm not selling on the likelihood alone of that deal.

I believe the product has a place in the British market.

OK, without those deals, what you have is a perfectly nice product,

I quite like it, but plenty of those things are around on the market at the moment.

There are.

So, what we're looking at is a business

that currently turns over £90,000 a year,

and you've projected in the next year 2.1 million sales,

but largely on the back of these documents, which are at best flimsy.

I'm afraid I'm out.

Nick Jenkins swiftly rules himself out.

Can the Dragon with form

in transforming a source brand into a major player

in the multinationals also make the magic happen

for Falu's range of Indian snacks?

What I feel is that Howdah is not going to become a big brand

without something really special.

So I think you're really going to struggle,

and £100,000 I don't think is going to touch the sides,

although I would suggest your business isn't worth

£600,000 or £700,000 today, so it's a big ask.

I couldn't make a return on this

because you've got nothing of any real substance

to hold the brand together.

I'm not going to invest, and say I'm out.

I'll tell you where I stand.

It is a very, very niche market.

You quite openly said you're looking for a Dragon that's got expertise

in this area.

Although I've got expertise in lots of areas,

this is one area where I haven't got that much expertise.

Today I'm not going to be investing with you, I'm afraid, and I'm out.

Touker Suleyman also declines to offer the £100,000

the entrepreneur is seeking.

Will Sarah Willingham be prepared to take a chance?

In order to really break through

and give you the kind of volume

that would actually give me a return on investment,

you've got to get in there to the mainstream aisles,

and I just can't see it.

It's not going to happen.

-I'm out.

-Thank you.

Sarah Willingham's rejection leaves the snack food entrepreneur

pinning her hopes for investment on Deborah Meaden.

Will she do a deal or walk away?

Funnily enough, I do think there's a place for a recognised brand.

But I don't think it's going to be

down the supermarket mainstream aisle

for a very long time.

And when it hits, cos sooner or later I'm sure it will,

you haven't got the resource to get there.

Deborah, that is why I'm here,

because your knowledge and expertise can fast forward the brand

and that is why I have chosen to come in front of you.

You're really good.

You've got a very quiet confidence and knowledge about you.

You could give this as good a chance as this needs.

But for an investment,

I don't see the same route and I don't think it's got

the size of opportunity that I think you probably do at the moment,

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

-I'm out.

-Thank you very much.

-Good luck.

-Good luck.

Her product may have got the Dragons' seal of approval,

but, ultimately, the business deal Falu was offering

failed to curry favour with the Dragons.

Probably it's a question of taking that risk.

And maybe that's not what they were looking to do today.

Our final entrepreneur into the Den is Manchester-based John Kershaw.

I think I'm excited.

I might just be bricking it.

My biggest challenge in the Den is going to be getting across the idea

that my business has value,

even though it doesn't yet have very much revenue.

That's going to be the big thing that's probably going to trip me up.

Hello. I'm John.

I'm from M14 Industries

and we are a dating company.

This £3 billion-a-year industry gives you, effectively, two choices.

You can sign up to a service like Match.com or OK Cupid,

answer hundreds or thousands of questions

all about you and what you like to do on a Friday night,

and they use information to match you

with people who are sort of like you.

Or you can sign up to one of the apps like Tinder or Happn.

And these do away with all those questions and instead give you,

effectively, a list of people for you to swipe your way through.

These apps are very fashionable,

they're very cool, they're very mobile-friendly,

but they're very bad at actually matching you with people

that you have anything in common with except proximity.

We think the solution is with simple, niche dating apps.

By targeting a specific niche you can get the specificity of a service

like Match.com and blend it with the simplicity of a service like Tinder.

Bristlr is our first product.

Bristlr matches those with beards

to those who want to stroke beards.

THEY LAUGH

Don't worry, it gets better. It's fine.

So, Bristlr has been a huge success.

Since we launched a little over a year ago,

we've welcomed more than 150,000 people to the platform.

We've made more than half a million matches between them,

and I've personally had a bunch of wedding invites,

which is just really lovely.

We've received national and international press coverage.

The Evening Standard put us alongside apps like Uber

as one of the top 30 apps for Londoners,

and Time Out New York listed us

as one of the top ten apps for New Yorkers.

Now we're looking to expand.

I'm here to ask for £80,000

for 15% of M14 industries

to allow us to grow beyond beards.

We are opening up our technology

to allow anyone or any company to have their own

fully managed dating or social app, and...

it's just very exciting.

So, thank you very much for your time.

I look forward to your questions.

A pitch with passion from hirsute hopeful John Kershaw.

He wants £80,000 in return for a 15% share

of his tech business providing bespoke dating and social apps.

Deborah Meaden already seems smitten.

Can I just tell you, I love that as a pitch?

I always say to people,

"Just speak what you know about and do it with passion."

And to end up with saying, "Well, it's just so exciting,"

that's just... I love it. You've got me already.

Right. So, at the moment, you're trading.

Are you making money?

Describe what the business is doing at the moment.

As far as Bristlr is concerned, it's turning over, give or take,

£1,000 a month.

But it's our proof of concept.

We set it up, we pushed it and it's just rolling

and bringing in this much money.

As far as M14 is concerned, we have one of the largest

radio networks in the UK on board fully signed up.

We've signed with one of the largest publishers in the world

to start developing for them.

These contracts that you've just signed,

you mentioned you signed one with...

Who was it?

I can't say the name.

Right. So like Global?

That could be them, yes.

Is it them?

Yes.

If you've just broken my NDA, I'm going to be so mad.

-OK.

-I'd like it known that he said that, I didn't.

I am bad at secrets, I'm sorry.

It didn't take long, did it?

You guys are good.

-So...

-To be fair, you're rubbish.

-It's not that we're good, you're rubbish.

-Oh, come on now!

You crack too easily. You crack too easily.

I quite like the fact that we're good.

OK, so you've signed with a radio business.

By the way, I think that's quite good.

What will that give you in terms of income?

We're anticipating it to be

-in the region of tens of thousands per year in recurring revenue.

-OK.

The entrepreneur's disclosure of a potentially profitable

media partnership appears to be wooing Peter Jones.

But is retail tycoon Touker Suleyman

playing hard to get?

-Why dating apps?

-Um...

I'm in the retail world.

There's a platform called Shopify.

-Yes.

-And if you're a small business, you can go on Shopify,

they have their own website and they've made a fortune...

-Yes.

-..because the market is growing.

-Yeah.

The fact you're focusing on dating apps, I mean, surely,

once most of them go out of business

and the top 20 or 50 apps are there,

you're going to run out of business.

So, in the same way we went from Bristlr to dating,

we see it as progressing from dating into social apps.

-Right.

-So, for example, we have a client called Bump

and they are for single mums and new mums

to find other single mums and new mums.

So that's not a dating site,

but the way you matchmake people with similar interests,

that's kind of where we see that growing.

John's forward-thinking

has certainly clicked with Touker Suleyman.

But can he convince Sarah Willingham

that his app design company can scale up to a serious size?

How many people realistically do you think you can reach

and what does that mean in terms of revenue?

-Paint me a picture.

-So, in terms of dating,

we think the market cap that we can reach

in the next several years

is about 10,000 individual partners,

which would turn over around about 100 million.

Based on what?

Based on the size of the industry

and the number of niche websites that have sprung up

and the amount of demand already out there.

-But, John, you're talking about finding 10,000 Bristlrs.

-Yeah.

-Is that really possible?

-Yes.

Some will be Bristlr's size,

some will be ten times the size

and some will be ten times less. We're not talking about...

No, I understand that. But the ones that are ten times the size are not going to use you.

-They would start with us because...

-They would leave you.

There's no real need to leave M14

because for them to run their own technology,

for them to have their own developers

and for them do their own customer support

would cost more than we are actually effectively billing them

because we have the economies of scale.

The self-assured app entrepreneur

appears to have an answer for everything.

And it's prompted Touker Suleyman to make up his mind.

You're very credible.

-Thank you.

-I want to get my toe in the water with you.

OK.

I'll make you an offer.

I am willing to put up half the money for 12.5%.

If one of the other Dragons wants to join me in this journey,

that is my offer.

OK, thank you.

A proposition from Touker Suleyman,

not just to the entrepreneur,

but to the rest of the Den.

So far, online innovator Nick Jenkins

has kept his counsel.

Is he about to declare his hand?

I see the beauty of what you're trying to achieve

and I know it makes a lot of sense for me.

I'd like to make you an offer.

I'd like to make you an offer for £80,000 for 20% of the equity.

-That will be my offer.

-OK.

A second bid for the entrepreneur's business as Nick Jenkins offers

the full cash,

but bypasses Touker Suleyman's suggestion to split the investment.

Which way will Sarah Willingham go?

I'd also like to work with you and I'd also like to invest.

I will offer you all the money

for 20% of the business.

Or I will offer you, actually,

on the same proportion,

any proportion with any number of Dragons,

but I would just like to go on this journey with you.

OK, thank you.

Three potential matches.

Touker Suleyman has offered half the 80,000 for 12.5%,

Nick Jenkins the full amount for 20%,

and Sarah Willingham is so keen to do a deal

she tables an open-ended offer to split with any of the Dragons

on any of their terms.

What's up Peter Jones's sleeve?

John, I'm going to tell you where I am,

because I own a company called BrandPath and BrandPath Commerce.

And we are now...

I don't know... We're a top ten global player in e-commerce.

And I was sitting here thinking, "Have I got a conflict of interest?"

But I've come to the conclusion that, regardless of whether I have

a conflict of interest,

I'd like to invest in you.

You are probably one of the most appealing individuals

to invest in that I've seen in the Den for a long time.

-I think I'm blushing.

-Genuinely.

Thank you very much.

With your level of knowledge of where to take this business

and the support that I could give,

I think we'd be a really good team.

So I'm going to make you an offer.

-I'm going to offer you all of the money for 20%...

-OK.

..but, likewise, if Nick would want to share it,

I'd be very happy to share the investment with Nick, as well.

I'd be very happy with that.

I think that you'd have a much greater chance of success

with the pair of us working on that.

Thank you.

Peter Jones and Nick Jenkins join forces in a strategic bid

to seal a deal.

But their equity demand is 5% more than John wanted to give away.

Is Deborah Meaden about to up the ante?

So I'm going to make you an offer.

And I'm going to match these guys.

I'm going to make it really hard for you.

I'm going to say exactly the same thing,

which is that I'm going to offer you all of the money, which is 80,000.

I want either 20% of the business

or I'm happy to share with any of the other Dragons.

That's my offer.

A major coup for John,

as all five Dragons are feeling the love and showing the money.

But as Nick Jenkins and Peter Jones join forces

to try to clinch the deal,

it's time for a tenacious Touker Suleyman to get tactical.

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

-I thought you've already made an offer?

-No...

-You did.

I did, and I can change my offer, can't I?

-Don't look at me.

-I can change my offer.

-Yeah, yeah.

-PETER:

-You want to change your offer now?

I want to change my offer.

I want to give you all the money for 15%.

That's shaken it up a bit, hasn't it?

Wow.

I need to put this in a spreadsheet.

Realistically, to summarise, I think you've got the pair of us for 20%,

and then the other combinations would be either Deborah on her own,

Sarah on her own...

-Sarah and myself.

-Yep.

Or you've got all of it with Touker.

Or I would share with somebody

if somebody felt they wanted 7.5%.

I won't do that.

-So it's either me as an individual or me and Sarah.

-OK.

OK. I'm going to pace around anxiously for a bit.

Do that.

It's the entrepreneur who is firmly in the driving seat,

and the Dragons who must sweat it out.

Will he go for a deal that means giving away 5% more equity than he intended,

or opt for Touker Suleyman,

whose revised bid for a 15% stake undercuts them all?

I've finished computing.

Thank you all so much for the offers.

It's a really nice sort of vote of confidence.

But I think just by, sort of, experience...

..I'll have to go with you two.

So I'd like to accept your offer.

-Great.

-Well done. Congratulations.

-Thank you very much.

-Well done.

That was unexpected.

Well done. You're very credible.

-SARAH:

-Yeah, well done.

-Thank you very much.

Well, I best get back to work. All right.

Thank you very much.

He was great.

A thrilling finish for the app entrepreneur

as he picks his perfect investment partners.

It definitely hasn't sunk in yet.

I think what happened in there was amazing and wonderful

and I'm very lucky.

Congratulations, guys. I'm very jealous.

You know when you have to smile and say congratulations

and you're like that?

-SHE GROANS

-I'm so happy for you.

No, I get why. I get why.

Brilliant.

Business is not an exact science.

Investing is a matter of judgment,

and it's no surprise that we normally see

the Dragons disagreeing with each other.

Not tonight.

We've seen four unanimous rejections and then, finally,

unanimous enthusiasm for John and his dating app.

It's the outcome that all entrepreneurs dream of

when they enter the Den.

Nobody buys a snack that does that.

Coming up next time...

Physical orders written down, confirmed, what have you got?

If anyone of my MDs was ordering a Michelin star meal,

I'd throw him out the nearest window.

No. No. Good try, but that doesn't answer my question either.

If you develop a gorilla brand,

if you crack that, then you make a fortune.

We didn't start off on the right foot.

I think, in the excitement, you got a bit carried away with it.

Don't blow it. Go and talk to the wall...

-Go and climb the wall.

-..sensibly.