Episode 2 Dragons' Den

The Dragons are back.

And two new fire-breathers have been unleashed in the Den.

They are...

The former banker who sold a cashpoint company for a cool

£50 million, Jenny Campbell...

..and head of the UK's number one vitamin business -

Tej Lalvani.

They've already shown they're a financial force to be reckoned with.

I would like to make you an offer.

And business is booming.

All of the money for 15%.

-Tej?

-Let's do it.

Tonight, more entrepreneurs are under fire.

How on earth did you get a £1 million valuation?

Your margin is so bad.

I've never seen a margin like this, ever.

Warning shots are fired.

How much money is now outstanding debt?

Close to 400,000.

You have no money to put where your mouth is.

And battle lines are drawn.

As one of the new Dragons, I come with a blank sheet of paper.

-Excuse me.

-It's my piece now.

No, I'm defending my position.

But has anyone got what it takes to leave the Den victorious?

Both of you are very credible.

There's a little bit of my heart doing this.

I know that there's big potential.

I am going to make you an offer.

Welcome to Dragons' Den,

where a selection of nervous entrepreneurs

with big business dreams face the reality

and the wrath of five multimillionaire investors.

Some could go from pitch to rich,

whilst others will leave the Den with nothing.

First to try their luck tonight are siblings

Ben and Harry Tucker from Somerset.

I'm the older brother. I'm two years older.

We're a bit like chalk and cheese, but that works really well.

Yeah, we like to think.

THEY LAUGH

They're brimming with confidence about their range of repurposed products.

I think it'll be a bit of a wow factor with the chair because it's cement.

We're hoping it'll put a smile on their face,

that's kind of what we like to do with our products.

-Hello, I'm Ben.

-And I'm Harry.

We're both brothers, business partners and founders of Plane Industries.

We're here today to ask for £80,000 in exchange for 10% of our business.

At Plane, we take old scrap materials from aircraft and turn them into luxury

furniture, stationery and luggage.

Each piece has a fascinating back story attached to it,

and for us it's about challenging and redefining our

perceptions of the things we throw away.

We make some pretty wacky stuff.

We've turned bombs into drinks cabinets,

exhaust nozzles into giant lamps and even windows into clocks.

Here's an example of our chair.

This is made from an engine cowling on aircraft and this retails for £19,000.

We started four years ago on a farm in Wiltshire with about £3,000 in our back pocket.

We now have five members of staff and we have turned over

almost £500,000 since 2013.

The stories attached to each and every item are the most important thing about what we do.

We sell our bespoke furniture to very wealthy clients all around the world.

We now want to scale the business,

so we currently are making luxury luggage from the discarded seating

fabric, coming in at a much more accessible price point.

Soon, we're about to launch our stationery and homeware range.

There's carves from the fuselage of all different types of aircraft.

We'd love for you to join us on our journey.

-Is it possible to have a look at some of the finishes?

-By all means,

and if you'd like to take a seat in the chair, feel free.

-Let's have a look at that.

-OK.

-Yeah.

It's a top-flight pitch from Ben and Harry Tucker, who are asking for

£80,000 for a 10% share of their plane parts upcycling business.

Do you know what? I can't resist getting in.

Are you ready, guys?

Would you like to all go and sit down? We'll just stay here for the rest.

-Get ready for take off.

-Round we go.

-LAUGHTER

-Woo!

-Faster?

-No.

-No, slower.

THEY LAUGH

And once everyone's feet are firmly back on the ground,

it's Tej Lalvani who's first in the pilot's seat.

I actually love aviation.

As a kid, I've always travelled on aeroplanes and I just enjoy the whole experience.

What do the numbers look like over the last three years?

In year one, we turned over £24,000.

And we made a loss of £8,000.

Year two, we had a turnover of £107,000 and £11,000 net profit.

Year three, we turned over £85,000

and we made a loss of £14,000.

And in the last financial year, we've had a total turnover of £250,000,

with a net that's expected to be anywhere between 60 and 70.

So, just, what was the reason for the drop?

So, every time we had a drop,

it was generally when we kind of went back and designed the new product lines

and we spent a huge amount of time trying to figure out how

everything can be scaled.

How do you source your materials in your base products then?

So, when we had the idea,

we went and met up at a big aircraft dismantling yard.

And they break on average about 55 to 60 aircraft a year

and they also sell all the parts, so that's where we get our parts from.

So they break them and you've come along and said, "Oh, we'll have this bit and this bit and this bit."

Yeah, that's how it started. And the reason why we're doing the luggage

is because the seating fabric is quite a big problem in the industry to get rid of

because it's fire retardant, so loads and loads of it,

unfortunately, goes to landfill.

So the company we're working with, they'll ship it to us all free of charge.

This is some of the examples of the bags.

The brothers have revealed strong upcycling credentials, and now

eco-conscious Deborah Meaden is keen to find out more about their business model.

Where are you finding your customers?

So, primarily it's all online.

And what we find is every time we launch what we call, kind of,

a halo product, which we try and do once a year,

it kind of booms online and then we kind of get a lot of organic traffic.

So they come in via that product?

-Yes.

-And then they end up buying into the whole story of these?

-Yeah.

-And how long does that take you to build?

So, they take about, um, four months.

How much does that cost you to make?

About £7,000.

-Including your time?

-Including our time.

-Yeah.

-That's good.

Deborah Meaden is impressed that their first-class products come with

economy costs.

Can their run as Den high-flyers continue

under Peter Jones's questioning?

You've got your hero product, and you can see that, you know, Deborah and I liked it.

Not just the aesthetic look, we enjoyed being in there actually, I think,

-if we were honest with each other.

-LAUGHTER

-But...

-Do you want to challenge that?

-I don't, actually, no.

I have to go along with it.

THEY LAUGH

But I have a genuine issue with the quality of the bag.

OK.

I think it's really substandard and quite poor quality.

-You've started to introduce products that aren't good enough.

-Mmm.

I'd have to argue with regards to quality, the actual feel and touch of it,

cos we tested them for a year and they're...

You do, but even feel, look, the zip.

It just feels, it doesn't...

And then you've got the story inside.

-Yeah.

-Yeah.

-"Feet in the air."

-You've just put 36,000.

-Yeah.

What does that mean?

Well, it means that during its life span it would have travelled at 36,000 feet in the air.

Well, it might have travelled at 37.

Yeah, no, so that's something that we're also still working on, is kind of...

We appreciate that the really important part about this is the storytelling.

My very point is that you haven't given the story.

And it does look like a 1960s British Midland aircraft cover.

But the reason why we've actually used that fabric to start with is because we thought

"Let's use the worst looking fabric we could possibly take off any

"of the aircraft and see if we could turn it into a beautiful product."

Well, I think that's good, because you definitely failed.

OK.

Some mid-pitch turbulence, as the range of cases failed to

take off with Peter Jones.

And now fashion magnate Touker Suleyman is ready to provide his expert insight

into the market for the luggage.

Guys, what are you doing?

-I think you will struggle with bags.

-With bags, OK.

And if you're relying on the bag business...

..I think you could have a problem.

The reason why we did the bags is mainly because there's so much

material and there's such a problem there.

We kind of thought, "What could we do with this problem?"

And that kind of led us down the route of the bags.

But the problem you're trying to solve...

..is going to take your business backwards.

I would have thought you're better off doing amazing products

-and charging double.

-Yeah.

Cos the person that wants to buy that will pay 50,000,

if they really want to buy it.

I love the hero products.

I know that there's big potential on furniture.

But your business at the moment...

-..is small.

-Yeah.

I mean, you've got a great product, but it's going to take a lot of time.

Yeah. It's not quick.

And for that reason...

..I'm out.

Touker Suleyman is the first Dragon out,

rejecting a deal over concerns about the entrepreneur's business strategy.

And now, plane enthusiast Tej Lalvani has some concerns about whether the

pair's designs are truly top-flight.

You guys are very creative and you've created some nice products.

But actually, the home furnishings you've got there,

you can't really tell it's from an aeroplane or aviation-related.

If I'm paying a premium to get those items,

I want it to be able to say what it is.

Well, that's where the branding comes in.

So, kind of, when you open it up,

you'll kind of find all the information about what it used to be.

No, but even on that, there's no logo on the item on top.

There will be. That's just the prototype.

It's very hard to get those details in the very first prototype.

But that should have been your primary purpose.

Whatever you're designing should directly tell you, like...

-Obviously you can't miss that.

-Absolutely.

-You know straightaway it's from an aeroplane.

An engine. But those small items, I think,

it's just that you're spending all that time doing it and creating it and it doesn't

visually tell you it's from an aircraft.

Erm...

Sadly, it's not something for me, so I'm out.

OK, thank you.

Let me tell you where I am.

That item is wonderful.

Now, has that got the provenance on it somewhere?

-It can do, cos...

-No, no, you keep saying, "Can do, we're doing that,

"we're developing this", and so on and so forth.

So, I'm disappointed where you're at in four years.

There's too much that you're still thinking about, and to come in here

and say your business is worth 800,000 is poppycock at this stage.

So, I'm out.

Two more Dragons exit the deal in quick succession -

both unhappy that the stories of the plane-part products are not clearly on display.

Will Deborah Meaden get on board with the aircraft reclaimers?

You won't be surprised to hear that everything you're doing I absolutely love,

because I like the sentiment behind it,

I get the sense that you really care about it as well, and I absolutely love that.

That could lead to an investment from me.

My thing is...

..I urge you to focus on that.

We didn't plough all our efforts into that, because we knew that we wanted to

diversify and that's why we've been working on this line since September last year.

So, if this continues to grow and we get continuous orders, that's fine, but...

Don't put more time into it, because your business is telling you something.

And you need to listen to it.

Your business is telling you that's where the money is.

But I don't personally think that this business is going to get huge.

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

-Thank you for your time. Thank you.

Despite connecting with Ben and Harry's business ethos,

Deborah Meaden does not see enough financial potential to invest,

and now only Peter Jones remains to salvage the siblings' pitch.

Typically, how long would that take to put together?

-An hour.

-I would say, yeah, a couple, a few hours.

-Well, Harry and Ben...

-Yeah.

..I'm going to make you an offer.

-Great.

-HE LAUGHS

I'm going to offer you £10,000 for that so you don't have to take it home with you.

-That one's actually sold to a client.

-That's actually sold.

-THEY LAUGH

-That's going to...

-That's going to Holland.

But we're happy to make you one.

So, is that a deal you're accepting?

Well, it has to go a bit more. We work on a 50% margin. It literally costs us...

Well, it costs us seven, doesn't it? Just over 50. But we sell them for 19.

And we'll make it bespoke, as well, so the colour you want, the interior you want.

Engraved with his name on the top.

If you want it.

-OK. Done.

-OK.

LAUGHTER

-Thank you very much.

-Thank you.

And then, guys,

I think that for me sums up what I believe and see in the business.

I love the product, obviously, that's why I've offered to buy one.

But I don't believe in the business direction you're going in.

And that's the only reason why I'm out.

So, Peter Jones has shaken hands on a sale.

So, erm, what colour are you having, Peter?

-That's lovely.

-I quite like that.

Make sure you have your name, the aircraft, the whole thing.

The brothers have acquired a Dragon client,

but they leave without landing the deal they were hoping for.

It's kind of mixed emotions.

-Yeah.

-There were some really valid points there as well that we'll take on board.

-Yeah.

-And we sold a chair to Peter, so that's cool.

-HARRY LAUGHS

The next duo into the Den are Mike and Zina Dean,

who are hoping to keep their hound at heel.

Good luck.

They're risking everything to make their doggy product the best in show.

We decided go big or go home.

So, we sold the house, we explained to the kids we're going on an exciting journey and, erm...

And we took it from there.

We took the decision that, you know, "Do we believe in it or not?"

-We do.

-Yes, we do.

-So, you know, it'd be crazy if we didn't back ourselves.

And here we are.

With everything on the line,

Mike and Zina are hoping their idea will snare a Dragon

and secure an investment.

Hello. We're Mike and Zina Dean and we're here today to ask for

£50,000 investment for a 5% equity stake in our business Huxley Hound.

Creator of Better Than Raw, the world's first range of fully traceable,

organic vegetable treats for dogs.

Ever since our dog, Huxley, and his brother, Rollo, came to live with us,

we've taken a keen interest in healthy nutrition, and after a lot of research,

I decided to raw-feed the boys and found the choice in the

market was vast, a lot of information and choice of different products,

but we found it wasn't the same for dog treats.

So, not deterred, I decided if I can't buy them, I'll make them.

So, I hit the kitchen and, armed with all manner of ingredients and

equipment, I went into development mode.

And then we took it to a very comprehensive taste test -

650 different dogs, 72 different breeds across the whole country.

The thing is, you may know,

dogs don't get any minerals or nutrients from a raw vegetable.

Basically, all of this is bound up in the cellulose,

which they're physically incapable of breaking down.

However, our dehydration process naturally compresses the vegetable

and pushes those nutrients to the surface.

The end result being that dogs get vitamins and minerals from our treats

that they don't get from a raw vegetable.

They literally are better than raw.

So, we launched the trade in January of this year.

We quickly secured a trial listing with Fetch,

the online pet store from Ocado.

And following encouraging sales,

they've just expanded their listing and they now carry our entire range.

We're very proud of our products and we have some samples that we'll be

able to give out to you, and thank you for listening.

A confident pitch from husband-and-wife team Mike and Zina Dean.

Aided of course by Huxley the hound.

They are hoping to tempt the Dragons with a 5% stake in their raw dog food business

in return for £50,000.

-Bye, Huxley.

-SHE LAUGHS

As Huxley takes a break from executive life, owner of three dogs

Deborah Meaden is first to take the lead.

OK. So, when did you start and what was your turnover in the first year?

So, we haven't yet filed a full set of accounts.

OK, so you're brand-new.

Exactly. So, we started trading in January.

-Ah, OK.

-Selling to trade.

However, we funded this business through the sale of the family home.

So, we've been spending money for a year and basically getting the products right.

We've just taken them to market.

-OK, so you're starting with a loss of...

-150,000.

OK. And so far, to date, what's your turnover been?

Um, it's just under, I think, 8,000.

OK. So it's very, very early days.

-Yes.

-And where are they made?

-We make them in Surrey.

-You physically make them?

-From your...

-That's right.

-So, the...

-..house?

-Is your house full of dried carrots and...?

-No, no, we've got a...

It was. No, we've got a factory on an industrial unit in Surrey.

-Oh, right. Excellent.

-So, we were joking earlier,

saying this is the most time we've spent together in weeks, cos I...

-Oh, really?

-I literally have a camp bed in the corner.

-You said you sold your own house.

-Mmm.

-Where are you living now?

-Rented house.

-Yes.

-We basically said to the kids, "Look, guys,

"Mum and Dad have gone slightly mad, we're going on a three-year journey."

You know, we've got an idea, we think it's a brilliant idea, but, you know,

I'm famous in my previous life for telling my clients, "Go big or go home."

-Were you a gambler?

-No, not at all.

No, I was a head-hunter.

But I spent about 20 years as a head-hunter working with banks

and management consulting firms.

A convincing display of entrepreneurial spirit from Mike and Zina, as they

reveal just how much they've risked to get their products to market.

Now the Dragon who is top dog of a £300 million vitamin business wants

to get a handle on Huxley's competition.

I like the space. I think it's interesting, it's a growing market.

Funnily enough, we just launched a range of vitamins for dogs.

And dog owners are definitely finding a lot of interest in investing in

healthier snacks and products.

Are there any competitors? Do other companies offer healthy treats?

What are the options on the market?

So there are only three products that I'm aware of that are available

in the UK, which are vegetable treats,

there's only one that's an identical product, and that's not organic

and it's made in Vietnam.

I was at Crufts this year, as I am every year.

So I'm pretty well into my dogs.

And you're right, there is a massive market in pets and dogs' and cats',

and so on, treats. They were everywhere at Crufts.

You said in your pitch that you have tested this on 72 different breeds, 650 dogs.

Can you just tell me a bit more about that research you did and what

-questions did you ask?

-Well, we based it on social media.

And just said, "We just want your feedback."

And it was pretty remarkable, actually.

With people posting pictures saying, "When are you going to be online?

"When are the full packets available?"

But, you know, with the number of reorders that we're getting,

the number of stockists that are reordering, you know,

when people like them, they really, really like them.

Mike and Zina's confidence in their product's ability to attract customers

has gone down well with owner of two dogs Jenny Campbell.

Now Peter Jones wants to broach the subject of their packaging.

I really do like your branding.

-It's...

-Oh, thank you.

-I think it really... It just says what it is.

Can I just pick up on that, cos I'm really interested in that?

See, I'm not sure I do like the branding.

Doesn't say it's dog treats for a start.

But I think the thing that you're selling is the fact that this is

-more digestible.

-Yes.

Where do you tell me that?

So there is a second phase of packaging, if you like,

which is what part of the investment is required for.

We have images there...

-Can I look at that?

-Of course you can.

Cos I think this is a totally missed...

It doesn't even say it's a treat.

There we go.

The story doesn't come out of this package, does it?

Right, so you've bought... The Better Than Raw has now come up higher.

Does that still explain why?

Er...

I mean, is there anywhere here that tells me why...?

I think it's on the back of the packaging.

It still doesn't say treat on it.

OK.

No.

The entrepreneurs' failure to recognise that the devil's in the detail

doesn't go down well with Deborah Meaden.

And Touker Suleyman wants to question the price tag they've attached to

their fledgling business.

-You've got a valuation of a million.

-Mm-hm.

You've turned over 8,000.

-So you must have a pretty good idea what you're going to turn over next month.

-Yeah.

Where's that business going to come from?

It's going to come from a combination of repeat orders of our

existing stockists. But this is pretty small beer.

-But...

-But it's the wholesalers...

-But, Mike, you come in here saying it's small beer,

but you're asking for £1 million valuation.

We've taken opinion on this from a number of people and the feedback...

From Huxley?

The opinion came from Huxley.

He's clever, but he can't speak, unfortunately.

So the valuation is based on looking at deals that have been done in the

pet sector. We've got a fully developed product range.

We've got science, we've got packaging, we've got a brand.

It is... It is right at the start here, absolutely right at the start.

So you're telling me that I'm going to value it today at £1 million,

that in five years' time it might come to that?

I mean, how on earth did you get £1 million valuation?

Crazy. And for that reason, I'm not going to invest and I'm out.

A damning assessment of the entrepreneurs, as Touker Suleyman deems their

price tag to be massively overinflated,

and he's first to count himself out.

But a Dragon who's no stranger to the dog treat market has an

altogether different concern.

I've been exactly in this space.

I'm not in it now, so I have no conflict of interest,

but I invested in a business, in here, in the Den,

that absolutely concentrated on nutritious treats.

Boy, is this a hard market!

There is so much competition for the space that you're looking for.

It takes a lot of money to get there, and we're a success story, you know?

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

-Fair enough. Thank you.

-I'm out.

The fact that Deborah has just said that

has just taken any wind that I did have in the business away.

There's nothing more important than an investor that's been there and

gone through that experience and yet wouldn't do it again in the exact

same marketplace. So I have to take that in.

-OK.

-And...

I hope it works for you, but it's not an investment for me and I'm out.

Disaster for the duo as doubts that the business has legs has led to two

of the Den's longest serving Dragons turning their heels on a deal.

Will Tej Lalvani be the fourth investor to bow out?

When you guys walked in with this and talked about the product,

I thought it was a good idea and something...

something that would work.

But the £1 million valuation is huge.

I feel that £50,000 won't be enough to get where you need to.

You'll need more money and I think that in year two,

I'll be putting another 50,000, and year three...

However...

..it's something that I think I could tag on

to my nutrition supplements.

And get the distribution.

So, I am going to make you an offer.

But I'd have to come in...

..at 30% for 50,000.

That's my offer.

OK, thank you.

Finally, a bid.

Pledging both the cash and the chance to align the business to

Tej Lalvani's multi-million pound health empire.

But at 25% more equity than they wanted to give away,

now only Jenny Campbell can throw them a more lucrative bone.

I think the journey is

a real credit to you.

But I also see when you get the branding right, the story right around brands,

people buy that.

And people do like to pamper their pooches.

So, you know, I think there is some mileage in it.

I don't doubt that it's hard,

but I tend to think every story is different as well.

And I think both of you are very credible.

So I am going to make you an offer.

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

But I would want 15%.

-OK.

-OK.

-Thank you.

Thank you. Can we do our back of the room...?

Sure.

The Den's newest Dragons battle it out,

as Jenny Campbell's offer of 15%

slashes in half Tej Lalvani's bid of 30.

But his outstanding record in the marketplace makes this a tough decision

for Mike and Zena, who've gambled so much to get the business off the ground.

-Right.

-OK.

Right.

Thank you very much, and thank you, all, for listening,

you've made some very good points.

Jenny, we'd be delighted to accept your offer.

-Thank you.

-Hey, well done.

-Thank you.

-Brilliant.

-Really brilliant.

-A deal struck.

-Well done.

-Thank you.

-Think you very much, thank you.

-Well done.

-Great job.

-Well done.

The dog-loving entrepreneurs leave the Den with a Dragon partner with

the perfect pedigree.

Well done.

Well done.

That was a treat in itself.

-Thank you.

-I didn't know whether to kiss her.

I didn't, it was one of those, cos...

All right, it's only 50 grand.

SHE LAUGHS

With one Dragon already investing £50,000...

-Brilliant.

-Really pleased.

-Thank you.

..for the remaining entrepreneurs, the numbers will have to add up.

You bought something, you got keys to the door, but it wasn't all well,

was it, when you lifted the carpet?

There are too many skeletons in the cupboard.

-It's like a payday loan, isn't it?

-I don't like things like this.

But will they manage to tame a Dragon?

I like what I see here. I like what I see here in you two, as well.

I'm going to make you an offer.

Next into the Den are Somerset-based business owner William Pryor...

-This is the right way round.

-..and his Chief Executive Officer,

25-year-old Fenna Leake.

It's green. After you.

I've had 40 years on and off in the book trade.

-But Fenna is the boss.

-But technically it's William.

They're bound together by their passion for the company.

What excites me is that it's a combination of a very old technology,

the book, with a very new technology, the internet.

So it's a fantastic meeting of ancient and modern.

-Just like us.

-Just like...

THEY LAUGH

Breathe in.

We are doing it.

Will the Den be the start of a new chapter for the unique duo?

Hello, Dragons.

I'm Fenna Leake, CEO of Bookbarn International Limited.

And I'm William Pryor, the chairman.

Bookbarn International is primarily an internet business that sells used

books on a grand scale.

We acquired the business in January 2013 as a turnaround project.

It's now profitable,

so we're here today to offer you the opportunity to invest £100,000 for

10% of our business, plus free books for life.

LAUGHTER

In 2016, the sale of printed books in the UK increased by 7.6%.

Whilst those of consumer e-books shrank again by 2.8%.

In the year to August 2016,

we sold 145,000 used and rare books through 20 internet marketplaces

around the world.

While our £1 book shop contributed £147,000 in revenue

in the last 12 months.

As well as selling lots of used books,

we also have a cafe, which contributes significantly to the bottom line.

In the year to August 2016,

we turned over 1.27 million and made a net profit of 34,000.

We've built the machine,

now your investment will enable us to grow our visitor numbers.

That's visitors both to our Bookbarn webstore and, most importantly,

to our rapidly evolving rare and antiquarian book department.

Darwin Rare Books, named after William's great, great grandfather.

So, thank you so much for this opportunity again, and, please,

we welcome any questions you may have.

It's a perfectly evolved pitch from William Pryor and Fenna Leake,

who are asking for £100,000 for 10% of their Somerset-based book business.

But in the Den, where survival is always of the fittest,

Peter Jones begins by exploring William's heritage.

You mentioned in your pitch about a great, great-grandfather.

-Yes.

-Who's your great, great grandfather?

Darwin.

-For real?

-Yes, really.

-In his name.

-But you shouldn't take any notice of that.

-I think that's quite big, isn't it?

-It's not my achievement, though,

I just happen to find myself being the great, great grandson.

Wow.

-Can I just ask, are you related?

-No. We're not.

So, how did this...? I'm not being funny, quite literally.

-How did this happen?

-Yeah.

Yeah. I was working as a Sunday girl in the shop, part-time,

one day a week. And then I decided to take a gap year

and it turned into a full-time job,

and they gave me this amazing opportunity.

And how old were you when that happened?

-21.

-She's now 25.

That's great. That's fantastic.

It is fantastic. We're really blessed.

Good reviews all-round for the entrepreneurs.

And now, former banker Jenny Campbell wants to audit their books.

I love the fact that books are getting a resurgence.

How many in a week will come inwards to the warehouse?

We're cataloguing 5,000 a week, and then we're receiving thousands more

-on top.

-It feels like you're on the receiving end of a chute of books

that's overwhelming you.

-Is it chaos?

-No, it's not chaos at all, it's quite orderly.

It feels almost cathedral-like because our stacks go so high,

-it is quite... It is quite "wow!"

-No, that's good.

Can I just ask, if somebody came in and wanted to buy that stock now,

-what would they...?

-We would look for at least £2 a book.

-So what's the total value?

-Well, we...

We have to confess, we don't know precisely how many books we've got.

We know how many books are catalogued...

-Online.

-..which is just over half a million.

So approximately £1 million worth of books?

Yeah.

With such impressive assets,

the book company is proving quite a hit so far.

But Deborah Meaden is poised to dig deeper into the company's set-up.

-What are your overheads?

-Er...

-Go on.

-So our biggest overhead is our staff costs, followed by our rent.

Our rent is £10,000 a month,

plus we pay a surcharge on that rent of 2,000.

I should explain, in 2015, we went into a CVA,

a company voluntary arrangement,

whereby we agreed to pay our then creditors 50% over four years,

which we're still doing.

And what caused that?

In 2013, when we took it over,

we discovered how unfit for the business the software was, and the

building. So we decided we had to, if we wanted to keep the business,

to change both those.

We were assured by an equity broker that he could raise 250,000 for us.

And we funded all that,

believing that we had this money coming, and when it didn't come...

-Yeah.

-..we got into financial difficulty.

And how much money is now outstanding?

All the company's debts are close to 400,000.

The startling revelation of substantial debts has brought the

Den to a standstill.

And Touker Suleyman is wondering how the entrepreneurs are managing to

keep their heads above water.

From what I can see, you did 1.27 turnover.

-Yes.

-You made 34,000 profit.

-Yes.

-It'll take you about 12 years to pay off your debts at that rate.

We are increasing our revenue all the time,

so hopefully our debt repayment speed will increase.

Yeah.

Fenna, you come across very credible.

You come across very knowledgeable, and when you said your age..

SHE LAUGHS

..I was taken aback.

However, there are too many skeletons in the cupboard.

It's not clean.

I'm not going to be on that journey with you guys.

I'm out.

Touker Suleyman is the first Dragon to ditch the deal,

uncomfortable with the burden of debt hanging over the book company.

Will Jenny Campbell, with a track record in business turnarounds,

be on the same page?

William, Fenna, what concerns me, you bought something,

you got keys to the door, but it wasn't all well, was it,

when you lifted the carpet?

Which then dragged you down and you went into the CVA.

I think you've got the next three, four,

five years to really see the light at the end of the tunnel and some

more hard spadework before that happens.

-Yeah.

-So it's not an investment for me at this stage.

-And I'm out.

-OK.

I am very concerned that £100,000 is not going to achieve what

you want it to achieve, because you are starting from behind.

It buys you time, it buys you some cash flow,

but it still gets eaten up there.

And that, to me, is just one step too far.

I'm out.

When I invest in businesses, it's got to be fairly simple.

With your business, there are so many things that need to be, sort of,

dealt with before you can really focus on the growth

and putting money in.

That's a key risk.

I don't see I'm going to get a return any time quick, so therefore,

I'm out.

-OK.

-Thank you.

Tej Lalvani is the fourth Dragon to close the book

on the business opportunity.

Only Peter Jones remains, and he's still finding the story of William's

ancestry a real page turner.

But is it enough to make him invest?

William, when you say you're the great, great-grandson of Darwin...

-Yes.

-..you are talking Charles Darwin, aren't you?

-I'm talking Charles Darwin.

I'll give you the full lineage, shall I?

Charles Darwin was the father, he had five sons.

And one of those, the third,

was Sir George Darwin, who was my great grandfather.

His eldest daughter was Gwen, she was my grandmother, so I'm a Darwin.

Even though my surname is not Darwin.

It is a tough one.

I think you've done a really good thing to keep, potentially, the business alive

-and allow creditors to at least receive a large proportion of their money back.

-Yeah.

Where I'm sitting, you've got £1 million worth of stock.

-Yeah.

-Even if you're selling them at a much lower price,

I would have wholesaled several 100,000 of my books to pay back

those creditors to take it back out of a CVA,

get your company back and get ownership and drive that online business.

Because if you've got six or £700,000 worth of stock left,

you could spend time tweaking it and actually making more margin.

And that, for an investor, is really exciting.

And if you'd focused purely on that element of the business...

..I would have got over the line.

So, I'm out,

but I wish you the very best of luck and I hope it all works out.

-Thank you.

-Thank you so much for your time.

Thank you, thank you, thank you.

Despite several plot twists,

the duo couldn't stop their descent into rejection

and they leave the Den without a deal.

It's a shame about the complications, but otherwise,

it's quite a nice business.

-Nice to see books still selling and still alive.

-Yeah.

It was a good reception, despite the outcome.

-Yeah.

-We're happy with that.

-Are we?

-Are we?

Yes, we're happy with that.

SHE LAUGHS

Our final pair of young hopefuls are fitness enthusiasts Liam Sheriff and

Craig Newbigin from County Durham, and they're expecting one Dragon

in particular to flex his financial muscles.

We could be grilled by Peter, but, to be honest,

he's one of the ones that we have quite high on our list, to be keen

to work with as well.

And obviously, Tej is the owner of a brand that we're big fans of,

so let's hope he doesn't be put off by us being competition, long-term.

-Hopefully.

-HE LAUGHS

Hi, Dragons. My name's Liam Sheriff and this is my business partner,

Craig Newbigin. We're here today to ask for £100,000 for a 10% stake in

our company, Natural Nutrients.

Back in 2013,

I was working as a personal trainer and all of my clients would

constantly ask where was the best place to buy supplements from.

After extensively researching the market,

I realised it was very difficult to find a single brand that offered

high-quality products,

as well as 100% transparency and that didn't use a load of unnecessary

artificial ingredients, so I decided to create one.

From day one, we've believed in choosing quality over cost and,

as a result, we've developed a range of products that our customers can trust.

We started with sports nutrition and have extended the range to include

general health, superfoods and now snacking products.

So after running the business from home part-time for the first three

years, I decided to go full-time in the summer of last year and,

as a result, we managed to grow turnover by 60% on the year before.

And so far this year,

we've managed to gain interest from Europe's largest and leading health

food retailer. And we now expect to launch our first product in 270 of

their stores in the next few months.

Liam's going to give you a sample of our latest product innovation,

protein popcorn, and we welcome any questions that you may have.

It's a gutsy pitch from Liam Sheriff and Craig Newbigin...

Choose any flavour you like, Touker.

..who are asking for £100,000 for 10% of their natural supplements and

-snacks business.

-Sweet vanilla.

Oh, that's good.

First off the starting block is Jenny Campbell,

ready to pump the body-conscious entrepreneurs for information on

their target market.

Nice to meet you. I love your accents, by the way.

But it won't easily sway me, it's got to be a good business.

So in the fitness market,

there is obviously the traditional body-builder.

-Yeah.

-And I've got two fairly strapping sons at home and what I'll find in

-the cupboard is a huge tub...

-Tub, yeah.

-..of Maximuscle.

And there's big spoons of it going in things.

Are you looking to convert people like that to this, or are you looking

to convert more average gym trippers, or just your average person to take one

-or two of these a day?

-We are getting customers who are very hardcore

body-building, very, very strict, clean eating and all the rest of it.

But we are getting a massive increase of uptake from just your general

-Joe Public.

-Isn't this already a crowded market place?

What we know is that there is an opening market for people looking

for more natural products with cleaner formulations.

The product that you have in your hand there is our vegan blend.

We're using fava bean there.

We are the only company using that in the UK.

The duo are confident they're ahead of the game,

but their ambition to swoop in and capture a new trend raises questions

for a sceptical Peter Jones.

I'm keen, really, to know why you believe that there is a market here

for you as a new entrant without

some serious money behind your business.

The last round of investment allowed us to go to trade shows.

At those trade shows, we were able to pitch our products to Holland & Barrett.

From that pitch, we were then invited to a meeting and discuss,

kind of, getting the products in there.

I know Holland & Barrett, we are one of the largest supplier of vitamins to

-Holland & Barrett.

-Yeah.

So, how many grams is that large bag?

-Kilogram.

-A kilogram, yeah.

-One kilo. And how much are you selling that for?

-£30.99 online.

So we'd be looking around the £33-£35 in-store.

And what's your cost on this product?

At the moment, it's around about £14 net of that.

Wow. OK. What price would you be selling it on?

About 16.50.

16... You're really joking now.

So you've got a margin of £2.50?

I don't think you're ever going to make a profit, and that's because your margin is so bad.

I've never seen a margin like this, ever.

It's a huge blow for the entrepreneurs,

as health supplement giant Tej Lalvani raises serious doubts

about the company's potential to make a profit.

And former banker Jenny Campbell wants to find out more about their

financial track record.

So how did you do in your first year, then?

We took £125,000.

Convertible investment loan.

And we used that money predominantly to set up shop with a warehouse.

But what were your figures last year?

Last year, 71,000 turnover.

-Gross profit?

-26.5.

And then we made a loss of 64,000 as we invested into the structure and

-infrastructure that we have today.

-And new product development.

-Yeah.

Guys, what's the terms on the 125,000 that you've taken in?

It's what's called a proof-of-concept loan.

The money's from Government money, from the EU.

They give you the money.

Nothing happens for two years.

After two years, you decide whether you want to negotiate an equity

shareholding, or you start repaying the loan back.

That, as it stands, is all up for negotiation.

So how are you going to do that?

How can you possibly repay any loan?

This year, we're forecasting a profit of 36,500.

And obviously we'll pay the loan back monthly, but...

Guys, I can tell you straightaway, I'm really concerned.

-Right.

-Can I see the agreement?

-Yeah, sure.

-Thanks.

Guys, could I ask you a question?

Based on today's conversation.

-Yeah.

-Is this business worth £1 million?

Honestly. Put your hand on your heart and say,

"Is it worth £1 million?"

On today's valuation, today, no.

OK. So why have you come in today

asking for £1 million valuation?

I think because we genuinely 100% believe that we can put our money

-where our mouth is.

-You have no money to put where your mouth is.

-That's your problem.

-We're determined to follow through with..

-Exactly what we said we're going to do.

-I think, guys,

this is not a business that says to me, without investment today,

-we'll survive.

-OK.

-So I'll tell you where I'm at.

-I'm out.

-Thank you very much.

Touker Suleyman is the first to decline the deal, with grave misgivings

about the embattled entrepreneurs' valuation.

And now Peter Jones has spotted an issue with their loan agreement.

The terms, they've been pretty tough on you.

125K, 0% interest.

You think, "That's great."

And then all of a sudden it goes, "Ah, redemption premium."

£100,000 or 80% of the loan.

-Yeah.

-That's a 40% interest rate.

It's like a payday loan, isn't it?

I've been there in that situation where, you know,

you felt that this was the last place to go to take the money.

I understand why that happens.

With my banking background,

I do think you would absolutely go back to the negotiating table

because it will be a case of, well,

either you lose the whole lot or we come to a sensible solution.

The terms of the duo's business loan are unequivocally damned by the Dragons.

Can Deborah Meaden see past the constraints of the contract to spot

a brand with potential for growth?

I actually get the business side of this.

Somebody has to break a market.

-Yeah, yeah.

-And all credit to the person brave enough to say,

"I'm going for it."

And I think the market is moving toward you.

-You know...

-No.

-Sorry.

There's a little bit of my heart doing this.

There's a lot of my head doing it.

But I am going to make you an offer.

And I'm going to offer you half of the money...

..but I want 20% of the business and it's on the basis that you can

-negotiate that £100,000 penalty out of that agreement.

-OK.

OK. Thank you very much.

Despite the tricky terms of the loan,

Deborah Meaden has made an offer,

but only for half the cash.

Leaving the duo in desperate need of another Dragon to complete the deal.

I think you're really, genuinely up against it

with regards to this agreement.

And this agreement is...

..is actually the reason why...

..I'm going to make you an offer.

Cos I don't like things like this and it's incensed me enough...

..to help you do something about it and help you change your business

for the better.

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

..but I want 40% of the business.

And I'm also happy to share it with a Dragon.

-Thank you.

-Thank you, Peter.

So, Craig, Liam...

..I like what I see here. I like what I see here in you two as well.

As one of the new Dragons, I come with a blank sheet of paper,

which means I've got time, capacity.

-Excuse me.

-Focus.

-Just...

-It's my...

-Excuse me, Deborah.

-Before we... Yes.

-It's my piece now.

No, I'm defending my position,

no-one's ever complained about the time I give.

And I certainly have all the time in the world for my investments.

Right.

I have time, focus,

energy, and I'm building a portfolio of diverse businesses and will give

them all that energy.

So I'm keen to

play a role in this, and to show you how keen I am,

I will make you an offer for half the money for 17.5%.

-OK. Thank you very much.

-Thank you.

In a remarkable turn of events,

the duo have three offers on the table, with the Dragons vying

against each other to seal a deal.

Will Tej Lalvani, who the pair were hoping to impress,

be poised to supplement their business with his cash and expertise?

That leaves me.

Um...

I just feel you've got your strategy all mixed up.

To try and get that cost of production down,

you may get it a little bit,

but you're not going to get it too much down.

And to sell a product at retail at £50 is going to be difficult.

Your company's just not worth anywhere near what you think it is.

It's probably worth about 200K.

So on that basis...

..I'm going to make you an offer.

Contingent to you sorting that loan out...

..I'm prepared

to offer half the money for 20%.

OK. Thank you very much.

-Shall we go and chat?

-Are we OK to talk at the back?

Four Dragons have made offers

and all are willing to share the investment.

Three are looking for 20% for half the money.

With Jenny Campbell coming in at 17.5%.

The heat is on as the entrepreneurs calculate their options.

Thanks, everybody, for your very kind offers.

And we come in here looking for two Dragons who we thought were going to

help the business take that next step and work on some clear problems

in the company at the moment.

And on that basis, we would like to ask Tej and Peter,

would you consider doing half of the money each for 15% equity each?

I'll tell you where I am, I just think that the reason I'm here,

putting half the money, is because of you guys and what you've done.

And, really, I can't go any lower.

OK. Peter?

How much will you be left with?

If you were to take 40?

I'd be left with 49.7%.

And obviously, I'd like to stay above 51, if I can.

And would you consider 17.5% each,

and can call it 35, which means I stay above 51 and you get a slightly

higher incentive?

Erm...

I actually think it's important that you retain a level of control

in the business.

I personally would be happy to go down to 17.5, but actually only when

the investment that I've made is repaid.

Tej, can we ask you to do the same?

-Yeah, I'll do the same.

-OK. Got a deal, then. Thank you very much.

Thank you very much.

Cheers, mate. Thank you very much.

After a high impact work-out in the Den,

Liam and Craig walk away all pumped up with the two Dragons

they were hoping for.

THEY LAUGH

-Well done, mate.

-Well done.

-All I can say is...

That's what I think of that.

Honestly, I've never felt the way what I'm feeling right now.

Absolutely unbelievable.

I can't believe it, to be honest.

-I know.

-Honestly, it's just crazy.

-It is.

They came in two by two today, a sequence of duos in the Den.

It's perhaps less daunting in front of the Dragons when there's more

than one of you. Didn't work in all cases,

but a couple of our pairs did win the backing of a multimillionaire

investor. They arrived as a two, but left as a team.

-Good health, Dragons.

-Cheers.

-Good investment, more to the point.

Next time on Dragons' Den...

Your numbers are about as hot as a mild korma.

That's lovely, but it's still stupid.

I believe I'm the one Dragon that can take you to where you want to go.

I'm actually going to make you an offer.

I like the way you're negotiating.

-I'm going to withdraw my offer.

-Don't lose it for 5%!