Episode 3 Dragons' Den

Tonight, five Dragons are unleashed.

They've already tasted the thrill of investment.

I know that there's big potential.

-I'm going to make you an offer.

-And that's for the full £50,000.

But I would want 15%.

And now, they're thirsty for more...

-Good health, Dragons.

-Cheers.

Good investment, more to the point.

..with a fresh batch of nervous entrepreneurs.

I think you're very, very persuasive.

-I love it.

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

But will their business ideas be difficult to swallow?

Your numbers are about as hot as a mild korma.

See, that's lovely but still stupid.

And what will give the Dragons an appetite to spend?

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

I like the way you're negotiating.

I'm going to withdraw my offer.

Don't lose it for 5%.

Welcome to Dragons' Den,

where the latest army of nervous entrepreneurs are hoping fortune

will favour the brave.

Some will leave victorious with the cash from a multimillionaire Dragon

investor, whilst others will leave with nothing.

First into the Den is Bucharest-born Alex Buzaianu -

an entrepreneur primed to defend his enterprise's price tag.

It's definitely going to be exciting.

I hope they're not going to be too tough with me on the valuation.

And there are two Dragons in particular he wants to impress.

I haven't decided yet which one would be the best.

Obviously Touker Suleyman has the experience in my field but Peter is

definitely a very influential person.

He would help my business tremendously.

Influential, yes,

but notoriously fiery when it comes to a company's valuation.

-WHISPERS:

-It must be a bag.

Hello, Dragons. My name's Alex Buzaianu

and I'm here to offer you the opportunity to invest £90,000

in exchange for 7% of my business.

The brand's Temporary Forevers.

We design and create leather goods for today's on-the-move professionals

that wish to carry the essential gadgets and photography gear in a bag

that is flexible and reflects their style and character.

We bring an added versatility that is not found among other products on the market.

The bag I have with me is the first bag designed with two

different faces, one to be carried as a backpack and the other as a

messenger or briefcase.

This makes it ideal for the commuters that want to cycle to work carrying

a backpack, they can have a messenger and then they can take the straps off

and walk to their meeting in a professional looking briefcase.

We first made our goods available in December 2015 through a Kickstarter

project and we successfully raised £136,000.

Since then, we have had another successful Kickstarter project bringing in

a total revenue of £330,000 in the last 15 months.

Our objective this year is to make our goods available online and

through retail stores across Europe, Asia and the States.

Thank you for your time. I would like to show you some of the bags if possible.

Luxury travel, laptop and camera bags

are the proposition from Alex Buzaianu.

It matches your...

-Yeah.

-He's offering just 7% equity

in return for a £90,000 investment,

which values his business at nearly £1.3 million.

That's yours, Peter.

Peter Jones revived the fortunes of ailing photography brand Jessops.

Will he think this business opportunity is picture perfect?

Why Temporary Forevers?

That's a really odd name.

The reason that is because it comes from the moments that you cherish

and you remember, they are temporary but they last forever.

So is this a temporary forever moment for you?

Of course it is. Is it not for you as well?

I don't know.

What have been the sales in the last 12 months?

£140,000 coming from the Kickstarter project,

plus approximately £25,000 from online sales.

OK, so you've basically sold £165,000 worth of product.

-Yes.

-And you're very specific about £90,000 for 7%.

-Yes.

-Why?

Considering that we have had approximately £65,000 profit,

-I think it's a fair price, would you agree?

-No.

An early reality check from Peter Jones,

who baulks at the entrepreneur's £1.3 million price tag.

Jenny Campbell made her millions

conquering the European cashpoint market.

Can she see profitable potential in Alex's bag brand?

Why this avenue, then?

Tell me what's available in the marketplace now and why you've got

a differentiator here.

Yeah. So, in general, leather goods tend to be more classic in design.

We decided to go for a classic sort of product, like the briefcase,

but add a lot of functionalities that are often found among products

that are not made of leather.

I like it, actually. It's a lovely product.

Alex, I'm going to tell you where I am.

It's partly because I feel slightly conflicted.

I've got a business that makes very beautiful leather bags.

In thinking what I can add to a business,

which is a voice in the marketing, I just think it adds confusion.

-Yeah.

-It just worries me, for you,

my voice wouldn't have that clarity

that you probably need to get yourself heard.

But you got the most fascinating voice.

Your accent is...

Is... Isn't it interesting?

-I know...

-Wow, Deborah Meaden flirting in the Den.

-Thank you, Deborah.

-You call that flirting?

-Yeah.

If you did that to me, I'd

-receive it as flirting.

-You need to see a bit more flirting, Peter.

But anyway, only for that reason, I won't be investing, Alex.

I'm out.

Investment in a similar business leads a conflicted,

but definitely not flirtatious,

Deborah Meaden to bow out of the deal.

Now fashion guru Touker Suleyman turns his expert eye on Alex's offering.

I know a thing or two about bags.

-You do, yeah.

-And this one here, for instance, retails for how much?

It retails at 245.

245? It's quite expensive.

-Yes.

-You're not at the low end...

-No.

-There are some very, very good imitation leathers...

..that, you put them next to each other, you wouldn't even know it was imitation leather.

-Can I say something?

-Sure.

It's like having a Lamborghini with a Renault engine.

So, although, on the outside, it may look great, it's not the same thing.

Yeah, but it's a different price point.

-I agree.

-What I'm trying to say to you is you're at that mid-price point,

which is a very difficult price point.

I actually think your price point is probably OK,

depending on the quality of the product.

People will be prepared to pay for the leather.

I love leather goods.

Satchels, backpacks...

Glad to hear it.

I don't want to wear

a bag that's a nylon material.

I like leather. It looks good, the quality.

And I think it's a massively growing market.

-For men. I agree.

-For men.

-Absolutely.

-So, that's all good.

Alex, I know this area very well.

Your product's overpriced for what it is.

I think the quality is mediocre at this price range.

You're going to struggle, and struggle big.

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

Thank you.

A sceptical Touker Suleyman makes his exit.

Has the retail tycoon's criticism torpedoed the entrepreneur's chances

with the rest of the Den?

You've done well and you've come up with a good product, high quality,

but...

You've got the big players, the luggage manufacturers,

who are all getting into this space.

Into backpacks.

I think you'd spent a lot of money and waste a lot of time going to retail.

I'm not going to be investing today.

-I'm afraid I'm out.

-Thanks for your time.

Alex. The fact that Touker's in this market and knows it well,

and has told you that basically, he doesn't think it's going to amount to much is interesting.

Because you have to take that on board.

It's a tough business and coming in at 90k for 7%,

I think you make it harder.

But you're a very, very investable individual.

-Thank you.

-I can see a big opportunity if I was to help you put this into Jessops overnight.

Not only would we prove Touker wrong,

we'd prove Tej wrong as well because he said you wouldn't get into retail.

In fact, you could get into retail in the next two minutes.

Alex, I am going to make you an offer.

But I want a decent sized return.

So, I'm going to offer you all the money but I want 35% of the company.

Would you agree with me that valuing the company at approximately

£250,000 is too low?

No, because for about 200,000,

I introduced a brand that's doing just over £1 million worth of

sales in this type of market.

We are pretty much experts in that field.

Thank you. Thanks for offer.

A bullish offer from Peter Jones, one of Alex's preferred Dragons,

but he is demanding a hefty 28% more equity than the entrepreneur wanted

to give away, slashing the value of his company by over £1 million.

Is Jenny Campbell poised to up the ante?

The valuation of over a million...

-Yeah.

-Where's that derived from?

I believe that everybody likes to negotiate a bit,

so if I came with the most reasonable offer...

I think you're very, very persuasive.

So, I will make you an offer.

For all of the money, for 25% of your business.

Thank you.

Two Dragons offer up their cash,

but will the entrepreneur be enticed by either offer?

I would like to ask Peter...

I think my business is worth about ten times the profit

if I evaluate it,

so that would bring it to about 600,000,

which would be 15%.

-Is that a fair way to valuate it?

-No.

No. Because you're a start-up and I wouldn't even value it, potentially, at half that.

But because it's a start-up, it has growth potential.

It does. But you're asking me, would I value this at 600,000?

I clearly wouldn't.

I came here thinking that my maximum would be 15%,

but I would really hope and appreciate if you took into account

and accepted 20%.

I think it's a large enough sum to keep you interested.

Would I get my money back?

Absolutely.

I'll tell you what I will do.

I would...

offer you all the money for 35%

and I would drop down to 25% when I received my money back.

Would you consider accepting 20% when you get your money back?

I think that's more than fair.

Alex, I wouldn't. No.

It's got to be 25.

Alex, let me just tell you where I am because clearly been negotiating is going...

Yeah, I'm sorry for leaving you out, Jenny.

It is clear that you're targeting Peter for this investment.

And, for that reason, I'm going to withdraw my offer and say that I'm out.

I'm sorry. I'm sorry for talking to Peter too much.

Thank you. Thank you.

One deal summarily taken off the table.

Leaving the entrepreneur at stalemate with Peter Jones.

Alex, why don't you go to the back of the room and think about it?

Will he accept the Dragon's offer of all the money for a 35% stake?

-WHISPERS:

-He's going to... He's going to accept it.

Dropping to 25% when he gets his cash back.

My worry is, because Jessops is only in one country,

we wouldn't have enough sales to have the impact that

I would want.

If we have a Kickstarter project that does reach above £200,000,

would you be willing to go down to 20%?

Don't lose it for 5%.

I don't understand, Alex, why would

you go for a Kickstarter project when,

next week, you would get an order for £200,000.

You don't need Kickstarter if you've got a firestarter.

If you do place an order of £200,000,

would you be able to guarantee that now and accept 25%?

Do you know what?

I like the way you're negotiating.

But if we do a deal,

I want us to realise that it's a partnership.

I wouldn't want to go through a relationship where we end up negotiating.

I understand. One last question, would I have a salary included in this?

A reasonable one.

What's your reasonable salary?

Would 30 be OK?

You own 75% of this company, when my money's repaid,

so you could be earning a lot more than that.

You would in fact guarantee that you would place that order?

I'll guarantee that.

We have a deal.

-Goodness.

-Thank you very much.

Thanks for your patience.

No, well done. Great.

-Good negotiation.

-Thank you, guys.

-Well done.

-All the best.

-Well done.

Finally, after a hard-fought battle on both sides,

Alex exits the Den with a deal.

I would have preferred if it was 20%,

but it feels amazing to have Peter Jones on board right now.

-I really like him.

-I'm jealous.

Thank you. I'm really excited.

Also hoping for a sackload of Dragon cash were Jonathan Brook and

Hayley Hollonds, who came to the Den

to pitch their unusual vegetable-based

gifting service.

Text A Potato.

Text A Potato sends personalised, hand-written messages on potatoes.

We now have potatoes for every occasion, including Mother's Day,

Father's Day, birthdays and even proposals.

The Aussie duo wanted a spud-tacular £40,000

in exchange for 30% equity.

I've never seen a potato dispensing cash before,

but there's always a first.

Peter Jones wasn't sure about getting one of his five a day through the letterbox.

What do people think when they receive a potato in the post?

That's exactly it, Peter. It's meant to be the most random gift you can

-possibly give.

-No, it's gone past random.

I think it's absolutely ridiculous.

But Tej Lalvani was hungry to find out if the gift product proved there

was such a thing as a free lunch.

Presumably it's not edible, is it?

The product is edible.

We actually made sure that all our ink is nontoxic.

People can still use it as a potato once they receive it.

The other thing we do is we donate 10 cents of the wholesale price of

the potato to a food charity group.

See, that's lovely.

That is really lovely.

But it's still stupid.

Which prompted Jenny Campbell to chip in with a question about the Aussie

entrepreneurs' roots.

What brought you to the UK? Is it because you think we're all bonkers?

Well, we can't say too much because we're both half-British.

Deborah Meaden wanted to know if they had dug up any other ideas.

Guys, have you got anything else?

We've got a musical gift card that doesn't shut up for eight hours

unless you burn it or put it under water.

An equally irrepressible Touker Suleyman was also the gift that kept

-on giving.

-Is there a potato board?

A potato board?

A body that represents potato growers.

You might get your investment by saying you could PR for them.

I'll tell you what, this could be a marriage made in heaven.

Touker and you two potato sacks, it works perfectly for me.

But a potato Dragon partnership wasn't to be.

You're going to make some people smile,

but I'm going to get out before the puns turn up.

Absolutely crazy.

To invest, I'd probably be a potato head, so unfortunately...

-There you go.

-I'm out.

It's not smashing, and so I'm out.

-Thank you, Peter.

-Thank you.

As the Dragons unanimously said tatty bye to the Text A Potato twosome,

their investment dreams well and truly mashed.

I think I've now seen it all.

-This is not real.

-I'm just checking, this isn't real, this is a dream.

Next into the Den is Rayeesa Asghar-Sandys,

who's hoping her investment offering will

prove more palatable to the Dragons.

I know what the demand is,

I know what people want and what they are looking for.

If you try our products, you will love them and you will buy them.

But will the Dragons buy into her investment opportunity?

Hello, Dragons. My name is Rayeesa.

I'm here today to introduce you to

my innovative brand, Spiced by Rayeesa.

I'm looking for a £75,000 investment in return for a 12% share of my business.

Now, my background is in policing

and after 17 years as a Met police officer,

my family and I moved from London to Herefordshire.

It was here that I got to explore my passion for cooking Indian food.

I would often batch cook some curry sauce base and freeze it to use later when I didn't have time.

Not only was this really convenient but it actually tasted really fresh.

It gave me the idea for the perfect curry sauce.

So I started selling at local farmers markets and then through local stockists.

People loved the fresh-frozen concept.

The next year, my daughter came on board and helped me.

We developed the Spiced by Rayeesa brand, which is what you see today.

In fact, we've become known as the Spice Girls.

Our products are now distributed through a national distributor.

We've been approached by high-street retailers Sainsbury's and Iceland,

and we've also been approached by Ocado.

We've got the perfect product for this market and I'm looking for the

perfect Dragon or Dragons to come and join me on this journey.

-Now, who would like to try some?

-Yes, please.

-Yep.

-Great.

Fresh curry sauce frozen is the offering from Rayeesa Asghar-Sandys.

-All for me?

-Please take a basket.

-Thank you.

-The ex-police officer wants to collar £75,000 in return

for 12% equity in her spice-based business.

-What a lovely presentation.

-Thank you.

But is it an arresting proposition for Touker Suleyman?

So, the curry market

is quite saturated.

-You're correct.

-There's a lot of players out there.

I just want to know where you sit amongst your competition.

Right, well, I wanted to have a product that offers something

that the other products didn't.

The first thing it offers is total freshness.

-Right.

-OK. We don't pasteurise our food.

We cook it slowly and then it's simply frozen so you can't get

a more natural flavour and natural quality of food.

The other thing is, a lot of products that are currently available are not

really for healthy diets.

We are all gluten free, dairy free, nut free and sugar free.

As well as being low in salt and low in fat.

OK. Is there any other brand who is your direct competitor that is doing

exactly what you're doing?

-No.

-Are you sure about that?

-I'm absolutely sure.

OK, right, fine.

Do you believe that someone could easily copy you?

Yes, they can certainly copy the concept.

They can't copy my recipes, though.

You haven't got a patent on the recipes, so it can be copied quite easily.

You're right, Touker.

It can be copied. So you are totally relying on your brand.

Yes, absolutely.

Freezer fan Rayeesa is counting on her range standing out from the crowd.

Will new Dragon and vitamin tycoon Tej Lalvani see

a healthy retail opportunity?

Well done on moving from police work into setting up your own business.

-Thank you.

-How is it in a family business?

Really, really good fun.

Because you're family, you can really kind of

tell each other what you think but then always working towards getting

-the best out of the business.

-Exactly, I understand where you're coming from.

I come from a family business. It was set up by my father in '71, who was a scientist.

I can understand the dynamics.

You're striving towards achieving a goal, which is great.

I also

think that Indian food today, the healthy angle is very important.

-Thank you.

-In fact, we actually opened a healthy Indian restaurant,

came up with some innovative dishes and in fact we've got some patents

on the curries.

The conversations you've had with some of the big retailers...

What has the main challenge been with it?

They said, we love it but we don't know that people are going to walk to the freezer,

and I totally agree with them because the freezer section is

a bit like a morgue when you walk in.

But the question is...

By the way, it tastes really good.

-That's really lovely.

-Thank you, Deborah.

So, the question is, if the supermarkets can't find where to put it, they won't stock it.

Where do you see this sitting in store?

Right, I'm glad you asked that, Deborah.

Because very recently I walked into a major supermarket and I walked

in the pet aisle, and to my surprise

there was a freezer right in the middle

of these tins.

I thought that's exactly what I need to do.

So my vision is to get these upright freezers directly next to the jars

of curry sauces and packets and mixes,

so people don't have to travel to the freezer.

That's going to be quite a bit of work to try and get that.

I'm absolutely ready for the work.

Fighting talk from the curry entrepreneur.

But sauce supremo Peter Jones is sceptical about her unconventional

stand-up freezer strategy.

-Rayeesa.

-Hi.

-You've got the smallest percentage chance

that that will ever, ever happen.

I don't think it's possible.

-I've seen it done.

-Where have you seen it done?

-Tesco.

-Pet food, though.

But it wouldn't take much to move it to another aisle.

Yeah. I think it would.

Space is so tight in supermarkets, brands are so strong,

then you're competing against the majors.

They'll speak to the buyers, they will say to them,

"We don't want to see this getting this prominence."

You need to have a large amount of money behind you to even persuade

them to really get behind it.

Well, we've been doing a lot of legwork.

We've been selling at shows.

We think the customers will speak for themselves.

But the customer won't get to know about the product.

You're not going to get it ranged in a supermarket and positioned,

you haven't got enough capital.

You could well be right, Peter.

But I'm not going to rule out anything unless I've tried every avenue.

75K is not even going to touch the sides, let alone build a brand.

-You need seven figures.

-Wow.

You need a lot of money. It's just not reality.

It's not a business that I can see a potential for serious growth and

that's why I can't invest and I'm out.

Thank you, Peter.

No cash for the spicy sauces from a deeply dubious Peter Jones.

Now, Touker Suleyman

wants to find out how healthy Rayeesa's financial forecast is.

Let's look at the numbers for next year.

So, for the next 12 months, what will your turnover be?

-Right, well, we are looking at 60,000 turnover.

-Right.

With a loss of 10,000.

Year two, we are looking at a 114,000 turnover.

-Yeah.

-With a profit of 10,000.

-OK.

-Year three.

-Yep.

-We are looking at 340,000 turnover.

-Yeah.

-With a profit of 110,000.

Right.

-Forget year four.

-That's enough?

My crystal ball doesn't go that far.

-OK.

-When do you think I'll get a return on my investment?

-Years four and five.

-Year four and five?

Yeah. If not sooner. It's all dependent on...

It doesn't look like it, from what you're telling me.

I understand, Touker, but the thing is we are

innovative and we are literally carving a market for ourselves.

You can be all the innovation you want to be,

but the numbers do not show me that at the moment you are investable.

It's a niche little family business.

You haven't convinced me today that there is a business that can make

money in the next few years, so on that basis I'm not going to invest today.

-Thank you, Touker.

-I'm out.

Another blow for the entrepreneur as Touker Suleyman also puts a deal in the deep freeze.

Are the rest of the Den equally cool about offering their cash?

I love curry, and my little taste of this, it's delicious.

-Thanks, Jenny.

-But your numbers are about as hot as a mild korma.

Dealing with the major supermarkets is, is very, very difficult.

That said,

I have seen the freezer concept you're talking about with home-made meals...

-Yeah.

-..in what I call the second-tier supermarkets.

Budgens, Londis.

-Yeah.

-Spar. So you may get some traction there.

But it's going to be a little bit of a long journey.

I don't doubt that you've got the persistence and determination to do that.

But it's not an investment that I would want to get involved in.

-OK.

-So I'm out.

Thanks, Jenny.

The dream investment is good person, good product.

I can tick both of those boxes.

I can feel your strength.

I can feel that you're going to be determined.

You've got a lovely product.

But the technicalities around the market are,

and the issues that they raise, are huge.

It's a real shame.

But I won't be investing.

-All right.

-I'm out.

Thank you, Deborah.

Four Dragons gone.

Only Tej Lalvani has yet to declare.

Will he be the Dragon to put some financial heat behind the frozen foods?

I like what you've done.

I think working with you would be great.

And I think you're in a market that is growing, with the health aspects,

particularly with Indian food, it's a new spin.

Yeah.

So I think your business is actually online.

-Yeah.

-Because you don't have the refrigeration problem online.

Ocado, Sainsbury's online, those retailers.

What I would do is market with recipes, blogs, build your brand that way.

-Follow that path.

-Yeah.

And you'll do well.

But unfortunately it's not an investment for me today, so I'm out.

Thank you. Thank you very much.

So, praise for the entrepreneur and her product,

but Rayeesa still exits the Den without a deal.

I know I can make Spice by Rayeesa work.

And I'm determined to succeed and you will see these in the supermarkets one day.

With a £90,000 investment already in the bag,

it's question time for the remaining entrepreneurs.

Why is it such a low margin?

Have you had experience running a business?

But any wrong answers could cost them an investment.

I find myself quite offended.

I don't understand.

You're not facing reality.

You've spent two million?

Yes.

I need a drink.

The next entrepreneur vying for an investment is Dorset-based inventor

Michael Gormley.

The product we have now, it is unique.

And there's a big market for it, so we're very hopeful.

Michael thinks his former career in the Army will prove a good training

ground for his time in the Den.

A military background does help.

It gives you self-discipline and confidence

when confronted with Dragons.

Hello. Nice to meet you all.

My name is Michael. I am an inventor.

I am also a director of Go Bubble Ltd.

I am here today to ask for 200,000

in return for a 5% share of the company.

Go Bubble is a two-part system that seals and preserves

an opened bottle of champagne.

This is the closure. It goes on the top of the bottle.

Once locked in place, this second part, the carbonator,

is inserted and twisted.

That operation, the initial injection of gas,

forces the air already in the bottle out through a vent in the side.

The bottle is now perfectly preserved.

The market for this - every bar, restaurant, hotel,

who sells champagne by the glass.

Each glass as good as the last for just 20p.

We've got over 200,000 outlets in the UK alone.

Just a 7% penetration of these

would realise a net profit of £3 million.

Since 2012,

sparkling in the UK's consumption has increased 80%.

It's a bit of a revolution.

I'm saying let's join that revolution.

Let's make some money. And to finish,

I would like to serve you out of a bottle

that we actually opened nearly four weeks ago.

Michael Gormley hopes he'll have something to celebrate once the Dragons

have sampled his champagne preserving gadget.

Sorry it's only so little.

He wants £200,000 in exchange for a 5% share of his Go Bubble business.

-Good health, Dragons.

-Cheers.

Good investment is more to the point.

Will an investment sparkle for Touker Suleyman?

-Michael...

-Yes.

You said you were an inventor.

-Yes.

-Tell us about how you got here.

I was in the forces when I was young,

mending helicopters principally.

A lot of work on gas turbine engines, so that gave me that brain.

And I had the idea initially of creating something to keep cola from going flat.

In the course of the development of that, this came up.

A credible trajectory from Army to innovation,

but the entrepreneur's invention seems to have left Deborah Meaden feeling a little flat.

Mine isn't as bubbly as I would expect it to be.

Let me tell you, our sales director is a wine connoisseur.

He has one of the best noses in Britain, apparently.

He assures us that this does the job.

This has travelled with a prototype top on.

They are not designed to travel...

Stop, you said prototype.

-Yes.

-Have you patented it?

-Yes.

-You have a patent?

This is in its initial patented phase...

-Right.

-..And is due to go onto the next stage of that patenting.

OK. You've come up with a valuation of 200,000 for 5%?

-That's right.

-So £4 million?

-Yes.

-I am assuming a valuation of £4 million

-must have some sales.

-No.

We have put it in places, but it's a prototype product.

-You have put it into places, how many?

-Five in total.

A trial product with zero turnover and a valuation based on future

potential can be a lethal cocktail in the Den.

Is a hangover already setting in for Peter Jones?

I'm OK with people investing in a business where it is pre-revenue,

I understand that model.

How much money have you raised for this business?

Two million to date.

-You've spent two million?

-Yes.

Where did you get that two million from?

A private investor.

And he said I really like the idea?

-Yes.

-And his company has invested £2 million?

-To date.

-And how much of that two million is still with the business?

It's all spent.

-So you've spent the two million?

-Yes.

-Who owns the company?

-He owns 90%, I own ten.

Oh.

OK, and is he here waiting to come in?

-No.

-Why?

He's on holiday at the moment.

You should have brought your main investor here.

You have got a 90% shareholder

that's not here and that's a big thing.

I need a drink.

Michael's admission that he owns just 10% of a company that has

already soaked up some serious cash is a sobering revelation.

Now Tej Lalvani, chief executive of a multinational brand,

wants to know who is the boss at Go Bubble?

Who is going to run this business?

Myself.

-Seriously?

-Seriously.

Sorry, have you had experience running a business?

I have a property portfolio, yes.

A property portfolio managing tenants?

That's a very different thing to launching a new product.

You have no orders.

You are not facing reality.

Do you really believe that you are going to get an investment today?

I was hoping you would listen to me but so far no-one has.

The model is actually based on the cartridge sales and it's the repeat

sales from the cartridges that generate the money and that is why it's clever.

Michael, I find myself quite offended by the fact that you've said to

the Dragons that we're not listening.

I haven't actually said anything yet.

You believe in this,

and invention is wonderful and we have to have inventions to land the

thing that makes a success in the end.

I might have said to you, "I love this, I am going to invest."

I'm really sorry, I certainly didn't mean to be.

It was only because I wanted to explain the cartridge resales.

You believe in this but this is absolutely crazy.

I think the bubbles have gone to a lot of people's heads and for that

reason I'm going to say I'm out.

Jenny Campbell bursts Michael's bubble by failing to finance a deal.

Has the air gone out of an investment for the other Dragons?

OK, it's lovely, beautiful looking,

it's the type of thing I'm sure I would love to own.

But you haven't even got the patent yet, have you?

-Yes, we have.

-Oh, you've got the patent, I thought you were in process.

The British patent is applied for and then the next stage is to go to European.

No, applied for, have you got the patent?

Is it granted?

Um...

The...

The predecessor of that is granted.

So this does not have a patent on it?

-Well, it will do effectively.

-Yes, but it hasn't.

You've got a prototype.

I do not understand how

you think you can value this at £4 million.

It's really quite simple. There really is a market out there.

It's not a good idea... I'm actually quite smart.

-You'd be surprised, so am I.

-I'm quite smart, I see a lot of businesses,

I see a lot of businesses that have got a lot of patents applied for

and I see the values based on those businesses.

This is about the potential.

The product is six months from production.

-Six months!

-Then we can start selling.

-Six months from production!

-Yes.

I'm going to say these words to you,

you have got a prototype and you don't have a patent,

I'm never going to invest at anything close to that valuation, so, I am out.

A patently unimpressed Deborah Meaden dismisses a deal.

And Touker Suleyman looks to have made up his mind.

All I can tell you is the fizz has gone out of this one.

I'm not going to invest.

-I wish you all the best, Michael.

-Thank you.

-And I'm out.

Michael, you mentioned that you're going to run the company, but with

10% you can't run the company,

if 90% is owned by someone else who is not here.

I actually think you are wasting everyone's time.

So I'm out.

Four Dragons have now put paid to Michael's investment dreams.

Only Peter Jones remains.

Will his verdict leave the entrepreneur toasting success or drowning his sorrows?

Your product seems brilliant.

But very niche.

I understand you picking on perhaps a Michelin-star restaurant where

perhaps they would want to offer perhaps a £50 glass of champagne.

-Yes.

-And your product I can see fits that bill really well.

-Yes.

-But that market opportunity is small.

1,500 units first year.

4,000 and then 8,000.

That is a very small proportion of the market

and we only need those sales

to realise the three million net profit.

So it's a win-win.

Do you know what, I'm not going to disagree with that.

But you have basically put the cart before the horse today.

I can't invest in this because you've got nothing at the moment

to invest in, so sadly I'm out.

So, a full five rejections for the champagne entrepreneur.

The Dragons failing to raise a glass to his investment opportunity.

I wasn't trying to insult them, it is a start-up business,

I was trying to tell them about the potential it has.

I believe in this product, I think the Dragons are missing a trick.

To my mind this is going to be the biggest they have ever missed.

He should have given us a bottle each, that is what he should have done. That was his only chance!

Might have done better.

Last into the den is Yorkshire-based Claire Gelder,

who has turned a hobby she loves into a thriving business.

Claire thinks that investing in her company would reap financial rewards

for the Dragons and provide the perfect antidote to the pressures of corporate life.

It reduces stress, it alleviates depression...

It just increases all of your happiness and people feel so content afterwards.

But will the Dragons be satisfied that Claire's enterprise

offers an uplifting investment opportunity?

Hello, my name is Claire Gelder,

and I am the managing director of the Wool Couture Company.

Today, I'm here to ask for £50,000 in return for 10% of our business.

Knitting has been around for thousands of years but recently

there has been a real resurgence in this handcraft.

We now have the likes of Kate Middleton,

Uma Thurman and we even have Russell Crowe knitting and crocheting.

We are an online retailer and we specialise in bigger yarn, tools,

DIY kits and handmade finished products.

But we do it with a difference.

We believe that people no longer want to spend weeks and months

handcrafting items.

We have scarves that can be finished in an hour.

We have hats that can be finished in two hours

and even our giant blankets

can be finished in an evening or two.

We have been trading for 18 months through Etsy,

Not On The High Street, and also our own website.

We have sold over 13,000 units,

we have taken over half a million pounds, and with your investment

we can be the worldwide retailer of DIY kits in knitting, crochet, macrame and weaving.

Now, Peter, can I give you a knitting lesson, please?

Yeah.

A cosy pitch from crafty entrepreneur Claire Gelder.

Are the needles normally this big?

She wants a sizeable £50,000 investment to go global with her giant knitting and weaving kits

and in return she is offering a 10% stake.

No, that's cheating.

I've just invented a quicker way of doing it, though.

This is called Pete's knit.

Peter Jones appears pleased with the super-sized product,

but Jenny Campbell wants to get a better handle on the entrepreneur's

handicraft range.

Obviously it has got some following, this large yarn,

but where is the majority of the sales?

My best selling product is a baby blanket.

-OK.

-So our target market are mums or mums-to-be.

That's interesting because it's almost like you're trying to get a new generation into knitting.

If it gets people off tablets and phones for a while and maybe you sit

there chatting and having a glass of sherry or something, that's marvellous.

Let me tell you something.

I've suffered with depression since I was 18 years old, I manage it,

it has never had me off work and the one thing that stops me from ever

taking a tablet has been crafting because when I am not feeling good

I can focus on something and it takes you out of that, "Oh, my God,

"this might happen," into the here and now, and that is my therapy.

Claire, good on you.

-Thank you.

-Congratulations on building an interesting business.

Are you selling finished products as well like hats,

-or is it just a kit for people to make it?

-So, we do both.

The likes of Vogue, New York Times, all of the magazines,

want our hand-finished products.

We never want to lose that side because I have people saying,

"Can you send me this? Can you send me that?"

And I like to be able to respond to it quickly.

Claire is showing a canny knack for PR and getting her wool seen in all

the right places,

but it's the giant knitter's chunky turnover that has caught textile

tycoon Touker Suleyman's attention.

You've got a half a million turnover?

In year one we took 140,000.

-140.

-And in year two we took 370,000.

370. And what was the gross profit?

35%.

So why is it such a low margin?

I was quite proud of that.

No, hold on.

If you sell something online,

it must be bigger than 35%.

It is. For example, we have the DIY pom-pom hat here,

so that has a cost of £10 to actually produce.

-Right.

-We would then retail that to customers at £50.

Right, so your margin from £10 to 50 is not 35%.

It's 80%.

This 35% that you claim to be your margin,

are you sure you are not talking about cost of sales?

-Yes.

-Are there any other costs that you put in your cost of goods?

There is our postage.

Your postage must be absolutely astronomical to reduce a margin

that blends between 50 and 80 down to 35%.

-It must be.

-So we charge for the postage.

Well, that's not it, so can we go back to the margin?

I don't understand.

What would worry me much more is that if you don't understand how you get to 35%

because right now it's impossible.

Our gross profit is our turnover

minus our cost of our goods and

-the labour...

-And the labour, which labour?

So that's the cost of me, my knitters.

So your cost of goods is including your labour as well?

Our gross profit is minus the labour.

That is your answer, that's really good,

-I just wish you'd said that at the beginning.

-Apologies.

Deborah Meaden's forensic breakdown of Claire's numbers reveals a

healthier profit margin than the entrepreneur had realised.

Now ex-banker Jenny Campbell wants to know if Claire is clearer

about how she would use the cash.

So, Claire, what do you want the Dragons' money for?

I would really like to grow the American market and knitting is going to explode in China.

I want to be the first one with the foot in there.

Out of the 370,000 turnover last year how much of that was online to the US?

-25%.

-Whoa! That's impressive.

And what that tells me is there is a potential in America.

There is a huge potential in America.

We have 56 million knitters and we can also see the concentration of the States

in which they are more active as well.

What we have got to focus on is the market penetration,

we've got to get more people knowing us.

Is there anybody in the UK that is doing what you are doing?

My biggest competition is Wool And The Gang.

Their biggest yarn is our smallest yarn.

I thought, "Right, I'm going to beat them out of the water."

With a competitive edge and transatlantic expansion plan,

it looks like Claire is back on track with the Dragons.

Is an investment knitting together for Deborah Meaden?

I think you've done a fantastic job.

I can see exactly the market you are going for and actually the whole

crafting thing, the mindfulness, the being in the present.

It just buys into all of those things.

I do worry about the longevity of it.

And I am a little bit...

..torn because I'm not sure...

I'm going to go quiet for a minute while the other Dragons

think about what they're doing.

-I admire what you've done, your story is lovely.

-Thank you.

The big concern that I have is really the actual size of the market.

I would imagine once you've done one or two,

it could get a bit boring.

-How much repeat business have you got?

-20%.

-That is low.

-That is low on such a thing as knitting, isn't it?

-OK.

I'm not overly convinced.

If I'm not convinced, I can't invest, so I'm going to say I'm out.

Peter Jones declines a chance to invest.

Will Tej Lalvani,

the Dragon who heads up a £300-million global brand,

put his cash into the knitting kits?

I think you're right, you do need to get your brand out there.

Marketing is important and I can see the potential, although it is niche.

My company does a lot of marketing. We're the largest advertisers in our

industry, so I'm actually going to make you an offer.

But I'd like to have another Dragon on board

who understands the industry a bit more,

so I'll offer you half the money,

£25,000, but for 15% of the business.

Which would mean another Dragon would have to match,

so that would work out £50,000

for 30% equity shared between two Dragons.

Thank you for your offer. Thank you.

Tej Lalvani is backing the business,

but is only willing to put up half the cash.

The rules of the Den dictate

that Claire needs another investor to match

this offer, or she will leave with nothing.

Will Deborah Meaden be the Dragon to seal the deal?

You're very good.

You are going to make a big success of this.

I do worry about the size of the market.

I'm going to come down the side of I'm not going to invest by saying

-I'm out.

-Thank you, Deborah.

Claire, I believe that you can make this into a bigger business, definitely.

And I could be really tempted to make you probably a 50% offer.

But I actually think I'm going to leave it to the ones who I believe

can add most value to where you are going and say I'm out.

Another Dragon down, and with just half an offer on the table,

Claire's business dreams could be left in tatters.

Unless fashion mogul Touker Suleyman pursues a deal and adds the wool

craft kits to his existing investments.

I love it.

I believe I am the one Dragon that can take you

to where you want to go.

I could help you with creating a US website and localising it,

new products, do it all for you.

I'm willing to give you all the money but for 30%.

At the same time you may well find that two Dragons are better than one

and I'm willing to share

one Dragon

-or two Dragons.

-Thank you very much for your offer.

Two bids to choose from.

I'm just going to take a minute.

But with both demanding a 30% equity stake,

20% more than Claire wanted to give away,

will their expertise come at too high a price?

I'm not going to quibble with you on the percentage of the business.

I respect both of you,

and I think I can see great opportunities with both of you.

And I would like to accept the offer with both of you.

-Great!

-Well done.

-Can I get a kiss?

-OK.

Well done, excellent, exciting.

We'll make this really work.

-I'm very pleased.

-PETER:

-Well done, Claire.

Thank you.

So, no negotiation but a double deal

and a giant boost for the big wool business.

I'm absolutely over the moon.

To have secured not only one but two Dragons.

I want to jump up and down and I want to do a dance and then I want

to have the glass of champagne that I put in the fridge last night.

I thought she was great.

Well done, really pleased she got the investment.

-And she deserves the investment.

-So you are going to give her the website,

you weren't just spinning her a yarn?

To haggle or not to haggle,

that is the question often facing a successful entrepreneur.

Do you take the offer or do you risk losing it by hard bargaining?

Well, Claire Gelder chose not to play tough,

Alex Buzaianu, with his leather bags, went the other way.

He took the risk and it paid off.

So on this occasion both got what they wanted.

Coming up next time...

-Oh!

-Never stand in front of anybody ever and say those words.

-How much?

-I think that's just ridiculous.

I mean it's beyond ridiculous.

Sorry, my voice has gone a bit...

If you do not get a Dragon to invest today, you're in trouble.

I really like it.

-That's my offer.

-Yeah, we'll do that.

I'm very interested.

Go on, Touker.

I have no interest in sharing it. I'm a selfish Dragon.