Episode 6 Dragons' Den


Episode 6

Similar Content

Browse content similar to Episode 6. Check below for episodes and series from the same categories and more!

Transcript


LineFromTo

'These are the Dragons.

0:00:250:00:27

'Five of Britain's wealthiest and most enterprising business leaders.

0:00:270:00:31

'Over the coming weeks, they'll make or break the dreams of dozens of budding entrepreneurs.'

0:00:310:00:38

-Oh, what? That's weird. It's so ticklish!

-You've got fish on your feet!

0:00:400:00:45

I'm going to make you an offer, but I want a higher percentage.

0:00:450:00:49

You stand in front of a group of people who could change your life overnight...

0:00:490:00:55

How do you hope to grow your business if you can't even motivate yourself

0:00:550:00:59

to do what should've been the biggest pitch of your life?

0:00:590:01:03

Have you ever heard of the saying, "A mountain to climb"?

0:01:030:01:06

You've got several.

0:01:060:01:08

'The multi-millionaire investors have each built up their fortunes from scratch.

0:01:120:01:18

'Hotel and health-club owner Duncan Bannatyne.

0:01:190:01:23

'Leisure industry expert Deborah Meaden.

0:01:230:01:27

'Retail magnate Theo Paphitis.

0:01:270:01:30

'Telecoms giant Peter Jones.

0:01:300:01:33

'And Hilary Devey, who made her millions in the haulage industry.

0:01:340:01:40

'The Dragons have the credentials, the contacts, the commitment and the cash ready to invest.

0:01:400:01:45

'But only in the right business.

0:01:450:01:48

'Will any of these hopeful entrepreneurs walk away with their money?'

0:01:480:01:52

Welcome to the Dragons' Den.

0:02:000:02:02

Our five multi-millionaires are ready and waiting

0:02:020:02:05

to put that all-important investment into business ideas and inventions

0:02:050:02:10

that come before them. But it's their own money at stake,

0:02:100:02:13

so only the best entrepreneurs can expect to walk away with any cash.

0:02:130:02:18

Hong-Kong born Karen Ho and husband To Chan are first into the den.

0:02:180:02:23

The beauty industry is notoriously hard to succeed in,

0:02:230:02:27

but can their new concept overcome the challenges?

0:02:270:02:30

-Good afternoon, ladies and gentlemen. I'm To.

-And I'm Karen.

0:02:510:02:54

And we're representing Aqua Sheko Fish Spa.

0:02:540:02:57

We're looking for 150K investment

0:02:570:03:00

in return for 30 percent of equity.

0:03:000:03:03

In June 2010, we opened our first venue.

0:03:030:03:08

It was one of the first fish spas in London

0:03:080:03:12

and we soon attracted a lot of customers.

0:03:120:03:14

December 2010, we opened our Soho venue.

0:03:150:03:19

And this is an illustration of the facilities.

0:03:190:03:23

A garden feature fish pedicure hall.

0:03:230:03:26

Also a modern Japanese bar with fish manicure areas.

0:03:260:03:31

Our first year turnover is a bit over £400,000

0:03:310:03:35

and the £150,000 investment will be used to open two more shops.

0:03:350:03:41

The further expansion would establish our brand

0:03:410:03:46

as well as broaden the customer base that we have.

0:03:460:03:50

-Erm, please feel free to try it.

-PETER: I'll try it.

0:03:500:03:54

'An orderly pitch from husband and wife team To Chan and Karen Ho.

0:03:570:04:03

'To expand their new beauty treatment brand,

0:04:030:04:06

'the couple are prepared to give away 30 percent equity

0:04:060:04:09

'but need a £150,000 cash injection in return.'

0:04:090:04:13

'Peter Jones is keen to put their claims to the test.'

0:04:140:04:19

-You put one foot in?

-Yes.

0:04:190:04:22

Oh, what? They're all grabbing for me.

0:04:230:04:25

-That's weird. And so ticklish!

-You've got fish on your feet.

0:04:260:04:31

-After two minutes, you enjoy it.

-Two minutes?

0:04:310:04:33

You must do better than our lady customers who are fine after five seconds.

0:04:330:04:37

-HILARY: What does it feel like?

-Like they're sucking on me. It feels weird and it's making me sweat.

0:04:370:04:43

-Very quickly.

-What fish are they?

-They're called garra rufa.

0:04:430:04:47

-What are they doing? They're eating part of my skin?

-Yes, your skin is protein to them.

0:04:470:04:52

They're gently sucking away on your feet.

0:04:520:04:55

I usually describe to customers as a thousand kisses.

0:04:550:04:59

-Have you not fed these fish for ages?

-No, no.

-They were fed yesterday by a few customers.

0:04:590:05:05

How long does it take for them to clean his feet?

0:05:050:05:08

For the optimal effect, it's around 25 minutes per session.

0:05:080:05:13

I will say that I do feel very different than when I first went in.

0:05:130:05:17

It is quite strangely, weirdly cleansing.

0:05:170:05:20

'One successful demonstration and one Dragon convert.'

0:05:280:05:32

-Feel your feet. Are they softer?

-I can feel that they're amazingly soft.

0:05:320:05:36

'But now spa and health club owner Duncan Bannatyne wants to focus on the business itself.'

0:05:360:05:42

-Karen and To.

-Yes.

0:05:450:05:47

So, in year one, your turnover was £400,000.

0:05:470:05:51

-Yep.

-Right. What was your gross profit?

0:05:510:05:54

About 100...

0:05:540:05:56

180-something.

0:05:590:06:01

-What was your net profit?

-Er, about 112.

0:06:010:06:06

That sounds a really big profit margin in this industry.

0:06:060:06:13

Is that growing on a month-by-month basis?

0:06:140:06:17

Or do you have blips when it goes up and when it comes down?

0:06:170:06:20

There would be, of course, blips, but what is important is that

0:06:200:06:24

we are seeing people saying, "It's great, we'll come back," or "We'll recommend to friends"

0:06:240:06:29

-and that people start using our loyalty cards.

-So are you the only people doing this in the UK?

0:06:290:06:34

-We are not the only people in the UK, no.

-Other people are doing it?

-Yes.

0:06:340:06:39

-How many competitors have you got?

-It's not that important to count the competitors.

0:06:390:06:43

It's more important to decide in this new market how we're going to play in three years.

0:06:430:06:48

'Assured and reasoned responses from the confident entrepreneurs.

0:06:520:06:56

'Theo Paphitis looks intrigued.'

0:06:560:07:00

So this is something you just decided to do?

0:07:000:07:04

Yes. We went to Macau and there was a hotel in Macau and they had a fish bar there.

0:07:040:07:10

We tried it. It was amazing.

0:07:100:07:13

We came back and we quit our jobs and we started this.

0:07:130:07:17

And we think business is fun. We really like business.

0:07:170:07:20

What's your background?

0:07:200:07:22

-We studied at the University of Oxford, both in science degrees.

-What degree did you get?

0:07:220:07:27

-First class honour, Gibbs prize.

-Karen?

-Merton College Oxford and I did physics.

0:07:270:07:33

-And what did you do after that?

-I went to Lehman Brothers to become a quantitative trader.

0:07:330:07:39

-You went to Lehman Brothers?

-Yes.

0:07:390:07:42

Consultant for one of those consulting firms in London.

0:07:430:07:48

Magnificent.

0:07:480:07:50

'The impressive duo may be garnering praise from the Dragons,

0:07:530:07:56

'but it's their £150,000 To and Karen really need.

0:07:560:08:01

'Will Hilary Devey find a reason to invest?'

0:08:010:08:05

Is your vision to continuing opening shops

0:08:070:08:11

or is your vision to sell this product to existing spas?

0:08:110:08:16

I mean, I go in nail bars,

0:08:160:08:20

and the turnover is phenomenal in such a small place.

0:08:200:08:23

I've actually sat there and calculated their profit

0:08:230:08:26

whilst I've been having my nails done.

0:08:260:08:29

Now, I could imagine that product going into a salon-type operation like that

0:08:290:08:35

and that would make that salon more profitable. So is that element part of your business plan?

0:08:350:08:40

We cultivate our brand very carefully.

0:08:400:08:43

We will not open too many, we will not spread it everywhere,

0:08:430:08:47

in one capital, we will only have a few.

0:08:470:08:50

But we are prepared to expand overseas if need be.

0:08:500:08:53

Explain your logic there.

0:08:530:08:56

It is most important for us to make sure our brand is good.

0:08:560:09:00

If an independent spa decides to cut on the cost,

0:09:000:09:03

then we have further to control, and once damage is done, it's done.

0:09:030:09:07

I'm sorry, but I do disagree, cos I'm all about growth and profit.

0:09:070:09:12

Yes, I'm very brand conscious, but I think there's ways you can do it without brand denigration.

0:09:120:09:18

So I think your whole business strategy, for growth, for profitability, cos let's face it,

0:09:180:09:23

that's what we're all in business for, to make money,

0:09:230:09:26

and I think you've missed a trick somewhere. And because of that, I think we conflict.

0:09:260:09:30

So I'm out.

0:09:300:09:33

'A first blow, as strategic differences cause the couple to lose one Dragon.

0:09:350:09:41

'And Deborah Meaden looks to have something on her mind, too.'

0:09:410:09:46

Can you breed these fish? Have you thought about breeding these fish?

0:09:480:09:52

Yes, we have thought about it, but at present, we have not put that into plan.

0:09:520:09:56

-So you buy live fish and they're all live.

-Yeah.

0:09:560:10:00

Do you know, tanks and cages make me feel sad.

0:10:010:10:05

I think you guys are very good and you've come up with a very good business model,

0:10:050:10:09

but I don't like export trade in live animals at all.

0:10:090:10:12

-Yeah.

-It's not a type of business that I would operate in.

0:10:120:10:16

-I'm out.

-OK.

-It's fine.

-Karen and To.

0:10:160:10:19

I don't doubt for one minute that you're two great young entrepreneurs.

0:10:190:10:24

And what you've done I think is absolutely wonderful. Magnificent. So I think you should continue.

0:10:240:10:29

But you don't have something that can't be copied. Everybody can copy it.

0:10:290:10:35

So I'm not going to invest.

0:10:350:10:37

I'm out.

0:10:380:10:40

'Two more Dragons out and the investment tides looks to be turning against To and Karen.

0:10:430:10:49

'But can high street expert Theo Paphitis

0:10:490:10:52

'see a money-making future in this business?'

0:10:520:10:55

I've got to be honest, I find it very difficult to make a decision.

0:10:580:11:01

Because you two are good. You qualify. You get a tick in the box.

0:11:010:11:06

I worry about the barrier to entry. It's not a lot.

0:11:100:11:14

I then worry about how you move the brand across.

0:11:140:11:19

Cos I'm pretty certain, within a short period of time,

0:11:190:11:22

this market will be congested.

0:11:220:11:24

And I'll then be relying on how you separate your business from the crowd.

0:11:240:11:30

When I take all those things into account...

0:11:330:11:36

..I don't quite get to a yes.

0:11:370:11:40

-Mm.

-OK.

-OK.

-That's fine.

0:11:400:11:42

-I'm out.

-Right. Thank you.

-Thank you.

0:11:420:11:44

To, Karen, erm...

0:11:450:11:49

You've without question proved your level of aptitude when it comes to looking at a business

0:11:530:11:59

and trying to make a business work and I enjoyed it and I'm sitting here thinking, "This is great".

0:11:590:12:05

One last question that I've got, though, you're in here wearing dirty trainers.

0:12:060:12:12

Is there a reason for dressing in oil-based jeans?

0:12:120:12:16

I can explain why. We painted the floor ourselves.

0:12:160:12:21

We did the sawing ourselves.

0:12:210:12:23

We are very hands-on people.

0:12:230:12:26

And if need be, we will get ourselves dirty.

0:12:260:12:28

-That's a really good answer, by the way.

-Mm.

0:12:280:12:32

In terms of the business opportunity, I am literally, on a balance, that close.

0:12:320:12:38

The 112K that you made, how much of that would you normally have taken as salaries?

0:12:390:12:46

We take minimum wage.

0:12:470:12:49

But how much, realistically, would you like to see yourself taking in the next 12 months?

0:12:490:12:54

We are going to put most of our money back into investment, to realise our strategy of opening more shops,

0:12:540:13:01

so our current position of taking minimum wage only will hold.

0:13:010:13:05

Erm...

0:13:080:13:09

Does your business have any debt in it?

0:13:090:13:12

63,000.

0:13:140:13:16

-63?

-Mm. That's the loan to support the opening of the Soho venue.

0:13:160:13:21

To, Karen, I think it's just tipping the balance the other way, unfortunately.

0:13:280:13:33

I don't see how I can make money

0:13:330:13:38

at 30 percent of your business.

0:13:380:13:40

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

0:13:400:13:45

'The Dragons may have been tempted by the proposal,

0:13:480:13:52

'but none could find a reason to invest their £150,000.

0:13:520:13:56

'To and Karen leave with nothing.

0:13:560:13:59

'This year, the den has played host to a number of products

0:14:040:14:07

'aimed at the health and fitness market.

0:14:070:14:10

'But so far, we've yet to see the Dragons invest in one.

0:14:100:14:13

'Business partners Scott Robert Shaw and Lee Collinson James

0:14:130:14:17

'wanted £100,000 to get us all skipping to a different beat.'

0:14:170:14:22

We believe that skipping is for everybody.

0:14:220:14:25

We wanted to bring a fusion of sport skipping and street dance, which is Skip-Hop.

0:14:250:14:31

DANCE MUSIC

0:14:320:14:35

'It may not have been a scientific assessment,

0:14:480:14:52

'but the den demo achieved only a 50 percent success rate.'

0:14:520:14:56

-Shall we skip together, Peter?

-Duncan can skip. I've never tried it.

0:14:560:15:00

-Hang on, Duncan, hang on!

-SHE LAUGHS

0:15:000:15:03

Give me half an hour, I could have you skipping. THEY LAUGH

0:15:030:15:08

'Having tried the skipping, the Dragons got down to numbers.

0:15:080:15:12

'Was the duo's success rate any better there?'

0:15:120:15:14

Have you ever heard of the saying, "Mountain to climb"?

0:15:140:15:17

-Certainly have.

-You've got several before you can convince me

0:15:170:15:21

-to invest £100,000 on a skipping rope.

-OK.

0:15:210:15:25

You've got a business that you're valuing at half a million pounds. How?

0:15:250:15:30

-The...

-Come on, snap, snap! You should have the answer!

0:15:310:15:35

You're coming here asking us for 100 grand.

0:15:350:15:38

We've done a lot of study and we believe the turnover is more than achievable.

0:15:380:15:42

Do you know what? I don't believe it.

0:15:420:15:45

'In the end, it was 100 percent of the Dragons who chose not to invest.

0:15:450:15:52

'And that signalled the end for Scott and Lee.'

0:15:520:15:54

-Tell me your background.

-I was a self-employed skipping coach.

0:15:540:15:58

I was making a very good living until I decided that we ought to start my own business and do it my way.

0:15:580:16:04

So you earned really good money, things were great, and then you started this businesses? Yes.

0:16:040:16:09

What do you think the conclusion would be if I said that to you?

0:16:090:16:13

Yes, I can see where you're leading.

0:16:130:16:15

-Don't suggest where I'm leading, what would your advice be?

-Don't do it.

-And that's why I'm out.

0:16:150:16:21

The Dragons know nothing about the products or the entrepreneurs they see

0:16:240:16:29

until they walk up the stairs into the den.

0:16:290:16:31

So don't be surprised if the multi-millionaires ask searching questions

0:16:310:16:35

before deciding whether to invest.

0:16:350:16:38

Is successful entrepreneur Alan Pearson from Middlesbrough ready for the challenge?

0:16:380:16:43

Hello, my name's Alan Pearson. I'm a sign manufacturer from Teesside

0:16:590:17:04

and I have two products here that I'm going to pitch to you.

0:17:040:17:09

The first, which is street nameplates,

0:17:100:17:13

and the second is a new product called Strim Base.

0:17:130:17:17

The street nameplates, it's a recycled plastic product,

0:17:180:17:24

and a recyclable plastic product.

0:17:240:17:26

It, erm... It, er...

0:17:260:17:29

We've been selling around £100,000 worth of them a year.

0:17:310:17:35

Erm...

0:17:350:17:37

The other product I have is something that I developed off the back of this product.

0:17:370:17:43

One of my councils I was selling to

0:17:430:17:45

was putting a concrete base round the bottom of the street nameplate.

0:17:450:17:49

It's cheaper to do that in the long term than actually strim round them.

0:17:490:17:54

So I came up with a product that can be mowed over,

0:17:540:17:56

will stop the grass growing round the post, and, er...

0:17:560:18:01

-Is that it?

-Sorry. I'm looking for £100,000,

0:18:050:18:11

to give a ten percent equity in the company for £100,000.

0:18:110:18:15

Erm... Thank you very much.

0:18:170:18:19

'An understated pitch from nervy Teessider Alan Pearson.

0:18:230:18:28

'He's looking for a cash investment in his new business specialising in street signs

0:18:280:18:33

'and a maintenance-friendly accessory. Deborah Meaden is in need of some clarity.'

0:18:330:18:39

Erm, what I'd like to understand

0:18:400:18:44

is what your business looks like at the moment.

0:18:440:18:46

-Because I think you said you sold £100,000 worth of this product.

-Mm-hm.

0:18:460:18:51

But that kind of implies there's another business that's sitting behind all of this.

0:18:510:18:56

Yeah, this would form a new business. I have an existing business, Ensign, which...

0:18:560:19:01

Sorry. So the business that you've currently got, is it profitable?

0:19:010:19:05

-Yes.

-How much profit?

-The turnover this year was about £800,000

0:19:050:19:11

and we made a good profit.

0:19:110:19:13

-A good profit?

-Mm.

-What's a good profit?

0:19:130:19:16

Well, yeah, er...

0:19:160:19:18

That... I'd rather not... That's...

0:19:220:19:26

We're looking at... This year, we made about £60,000.

0:19:260:19:29

So £800,000, net profit £60,000. Park that business to one side

0:19:290:19:34

and this product here that you've sold £100,000 of, how much profit did that make?

0:19:340:19:40

-We'd be looking at about £60,000 gross.

-Right.

0:19:400:19:43

-So presumably you've got accounts.

-Yes.

0:19:430:19:45

-So what do those accounts...

-Well, this is part of the Ensign business at the moment.

0:19:450:19:50

This has been... This is part of Ensign.

0:19:500:19:53

So you've got a product, a new product, sitting inside your existing sign business.

0:19:530:19:59

I'm really interested to understand why you've decided to take them out of your existing business.

0:19:590:20:04

Because I think that these products would be of interest to you.

0:20:040:20:08

The sign business, standing on its own, doesn't need the investment...

0:20:080:20:12

Investing in a business that has a proven track record

0:20:120:20:15

and is making a profit is always of interest to a Dragon.

0:20:150:20:18

'An awkward first exchange from the tongue-tied entrepreneur.

0:20:200:20:24

'Will he fare any better under questioning from Peter Jones?'

0:20:240:20:29

-I think it's quite appropriate that you've brought in a sign with "Dragons Court" on it.

-Yeah.

0:20:310:20:37

Because if I was a judge, I'd be sentencing you

0:20:370:20:41

to making probably the worst presentation

0:20:410:20:45

that I've ever seen in the den.

0:20:450:20:47

Is there a reason why your pitch was so...

0:20:470:20:51

..slapdash, amazingly average?

0:20:510:20:54

I had it all in my head when I came up the stairs, Peter,

0:20:540:20:57

and it all fell apart as soon as I got to the top of the stairs.

0:20:570:21:01

Could we start again and I just want to see whether you are

0:21:010:21:04

at all interested in engaging in a conversation that actually says,

0:21:040:21:09

"I'm willing to change my pitch and you can invest in the overall business

0:21:090:21:15

-"and have a slice of the overall business, rather than the separation of products."

-Yes, I would.

0:21:150:21:21

OK. So let's talk about the future.

0:21:210:21:26

If things go according to plan, based around the current business you've got,

0:21:260:21:30

what is your current forecast for the next 12 months?

0:21:300:21:34

I would expect to turnover £1.1 million, £1.2 million.

0:21:340:21:37

And what do you think your gross profit will be?

0:21:370:21:40

I'd be looking at 100 to 120 gross.

0:21:400:21:45

-Gross?

-Yeah. Oh, sorry, net. Net, sorry.

-What's your gross?

0:21:450:21:49

Erm... Erm...

0:21:490:21:53

If you take the average of the last three years, in percentage terms,

0:21:540:21:58

-what have you made, gross profit, in percentage margin?

-We make round about 100 percent.

0:21:580:22:02

-Well, you can't.

-Yeah, with overheads, costs.

0:22:020:22:06

-Mark-up.

-Sorry?

-Margin or mark-up?

0:22:060:22:10

-So your gross margin is around 50 percent?

-Double what we...

0:22:100:22:14

-That's 50 percent gross margin.

-Yeah.

0:22:140:22:16

'The proposition may have changed, but Alan's nerves have yet to settle.

0:22:210:22:25

'Can Theo Paphitis make sense of the Teessider's business?'

0:22:250:22:30

So 100,000 of the 800,000

0:22:320:22:37

comes from that sign.

0:22:370:22:39

-Where does that other 700,000 come from?

-Potentials.

0:22:390:22:42

No, you said your turnover last year was 800,000.

0:22:420:22:45

Yeah, the sign manufacturing as a whole.

0:22:450:22:49

-700,000...

-Because... Hold on, let me just speak.

0:22:490:22:51

-Selling to people like you.

-Whoa.

0:22:510:22:54

-At the moment, what you've said to us is you're happy to throw the whole business in.

-Yes.

0:22:540:22:59

So now I'm saying, I understand where £100,000

0:22:590:23:04

-of the turnover of your business comes from.

-Yes.

0:23:040:23:07

The other 700,000, talk me through it.

0:23:070:23:11

We, er... We're general sign manufacturers.

0:23:110:23:14

-Shop signs?

-Shop signs, van signs.

0:23:140:23:18

-Do you have any big repeat customer base?

-Yeah, we have a number of big customers, blue-chip companies.

0:23:180:23:24

-And you made 60,000 profit. Have you always made a profit?

-Yes.

0:23:240:23:28

-And what's your wages?

-I take as I need. I don't have a specific amount that I take.

0:23:280:23:34

OK, just as an example, you made 60,000 profit after how much drawings?

0:23:340:23:38

Erm... I would probably say about 40.

0:23:380:23:41

Alan, in your company accounts, every year at the end of the year,

0:23:410:23:45

you have to state what salary you've taken. You must know what it is. You can't just say, "I just..."

0:23:450:23:51

-What did you take in your last year as a director?

-£4,600.

0:23:510:23:55

-£4,600? In the full year?

-Mm-hm.

0:23:550:23:59

I thought you said to Theo you took 40,000.

0:23:590:24:02

Yeah, I have a director's loan account that I draw it out of.

0:24:020:24:06

-You've got to clear that.

-That's a little bit misleading,

0:24:070:24:10

cos Theo specifically asked you what you were taking from the business.

0:24:100:24:16

And what I was taking from the business was £40,000 a year.

0:24:160:24:19

-But you just answered Duncan £4,000.

-No, a wage, £4,000.

0:24:190:24:24

That's a little disingenuous. The information we glean from that

0:24:240:24:28

is you're able to draw £40,000 and it still makes £60,000 profit.

0:24:280:24:33

-Yeah, OK.

-Now that is a world of difference from a business that can only afford £4,000 of wages

0:24:330:24:39

and make £60,000 profit. Cos you turn from a business that might have potential

0:24:390:24:44

to a business that's just about paying your wage.

0:24:440:24:47

Alan, your job was to take me down a path that led me to a conclusion

0:24:480:24:53

-that made me want to invest in your business.

-Invest, yeah.

0:24:530:24:57

-And you haven't done it.

-Aye, I appreciate that entirely.

-So I'm out.

0:24:580:25:03

'Confusion reigns in the den

0:25:060:25:09

'and a dazed-looking Alan loses his first Dragon.

0:25:090:25:13

'Theo Paphitis is not looking impressed, either.'

0:25:130:25:17

Alan, in some ways, I can forgive you

0:25:190:25:23

for not knowing all the figures

0:25:230:25:27

like the back of your hand.

0:25:270:25:29

But I don't think there was any doubt in your mind the difference between salary and drawings.

0:25:290:25:36

I wasn't asked that, Theo. I was asked what I took out of the business. But, yeah, misleading.

0:25:360:25:41

Misleading. You were misleading in your answers.

0:25:410:25:44

And, actually, a bright little product.

0:25:450:25:49

Potential. But I'm sorry to say

0:25:510:25:55

you have not covered yourself

0:25:550:25:58

-with too much credibility here today.

-I appreciate that.

0:25:580:26:02

So I cannot invest in you.

0:26:020:26:06

-And for that reason, I'm going to say I'm out.

-OK.

0:26:060:26:10

-And I didn't mean to be misleading. That's something I had no intention...

-Alan.

0:26:100:26:14

If you can't come here and prepare yourself for the interrogation that you know you would get...

0:26:150:26:21

If you're looking at anybody to invest,

0:26:210:26:24

they would be asking for this information.

0:26:240:26:27

So why wasn't you prepared?

0:26:280:26:31

-Er...

-And secondly, how do you hope to grow your business

0:26:340:26:37

if you can't even motivate yourself to do what should've been the biggest pitch of your life?

0:26:370:26:42

How on earth do you expect anybody to invest in you,

0:26:440:26:48

your product or this company?

0:26:480:26:51

You would make my foot itch.

0:26:510:26:54

I'm sorry, Alan, it just doesn't go. I'm out.

0:26:540:26:58

'Two more Dragons out, and Alan's changes of investment are looking slim.

0:27:020:27:06

'Will Duncan Bannatyne throw him the financial lifeline he badly needs?'

0:27:060:27:12

I think you would be such hard work, Alan,

0:27:150:27:18

I just can't understand how you work.

0:27:180:27:21

And so for that reason and that reason only, I've got to say I'm out.

0:27:210:27:25

Alan, "Have you got a business that could be invested in?" is the bottom line.

0:27:280:27:32

And I think there lies the biggest issue.

0:27:320:27:35

It is still a quagmire. And I think the only major mistake that you've made,

0:27:350:27:39

and you're going to regret this, is not knowing your core business

0:27:390:27:44

as well as perhaps you should.

0:27:440:27:46

I can't invest in you. I'm out.

0:27:480:27:51

'A devastating end for Alan. It was a shaky start and his pitch never gained momentum.

0:27:540:28:00

'He leaves with nothing.'

0:28:000:28:02

I walked up the stairs and immediately when I was up there,

0:28:030:28:06

all what I had in my head to talk about went.

0:28:060:28:09

We barely touched the products that I brought to show them and hoped that they'd invest in.

0:28:090:28:14

And I came away feeling a complete idiot.

0:28:140:28:18

'The higher the investment an entrepreneur demands,

0:28:230:28:26

'the greater the scrutiny they must expect, because it's the Dragons' own money that's being put at risk.

0:28:260:28:32

'So when Londoner Jonathan Caplan asked for a £275,000 stake

0:28:320:28:38

'in a new poker console, he was on the receiving end of some tough questioning.'

0:28:380:28:43

Our flagship product is the wireless poker controller.

0:28:440:28:46

It's a handheld joystick that enables you to play the poker game in a faster,

0:28:460:28:51

more accurate and more efficient manner. We've currently sold 10,000 to date

0:28:510:28:57

and the product is currently being used in over 25 countries worldwide.

0:28:570:29:01

'It was an assured pitch from the entrepreneur.'

0:29:010:29:04

-Can I use it?

-Absolutely. Please.

0:29:040:29:06

'And enthusiastic poker player Duncan Bannatyne enjoyed the demonstration.'

0:29:060:29:12

-Is this a real game?

-It's a real game, real money.

-This is real?

0:29:120:29:15

You can do everything from the controller. If I turn my finger, the bet goes up and down.

0:29:150:29:20

OK, we want a flush. OK, I've lost. OK.

0:29:200:29:25

'But then the business interrogation commenced.'

0:29:250:29:29

-Jonathan, what did you do before you did this?

-I decided to go and start my own company.

0:29:290:29:33

It was an online gaming company, but it took the aspects of what the poker rooms do and...

0:29:330:29:40

-How much money was invested in that company?

-£4.8 million.

0:29:400:29:43

You got £4.8 million worth of investment?

0:29:430:29:46

-Mm-hm.

-And how much of that company did you own?

-Er, about 14 percent.

0:29:460:29:50

-What happened to that company?

-As I started the company, I raised the majority of the first money...

0:29:500:29:55

-What happened to it?

-At the point that I took the company to, it was successful.

-What happened to it?

0:29:550:30:01

-I left before...

-Where is that 14 percent today?

-They liquidated the company a year ago.

0:30:010:30:05

'In the end, it was Theo Paphitis who summed up the mood in the den.'

0:30:050:30:11

Jonathan, your previous track record shows that I'm likely to lose my money.

0:30:110:30:18

I appreciate I don't have amazing successes to show where I have returns on investment...

0:30:180:30:24

-With all due respect, you have no successes to show.

-OK.

0:30:240:30:27

I reckon the odds probably are better just to go to a casino

0:30:270:30:31

and put £275,000 on red or black.

0:30:310:30:35

-I'm out.

-OK. Thank you for your time.

0:30:360:30:39

'So far tonight, the entrepreneurs have failed to convince the Dragons to part with their cash.'

0:30:400:30:46

You would make my foot itch. I'm out.

0:30:460:30:50

'To find out what our newest Dragon, Hilary Devey, makes of her experience so far in the den,

0:30:500:30:55

'press the red button at the end of the programme.'

0:30:550:30:58

29-year-old London-based twins Polly and Charlotte Vickery

0:31:000:31:04

are experienced in the fashion sector and they've recently launched their own range.

0:31:040:31:08

But to expand, their company needs investment, and that's where the Dragons come in.

0:31:080:31:13

Will they see potential in these two young entrepreneurs?

0:31:130:31:17

Hi, Dragons. My name's Polly and this is my sister and business partner Charlotte,

0:31:390:31:44

and we're here today to ask you for £65,000 worth of investment

0:31:440:31:48

for 20 percent of our company.

0:31:480:31:51

Since Brat & Suzie launched, we have established a reputation

0:31:530:31:58

for our unique, hand-drawn, illustrated animal T-shirts and tops.

0:31:580:32:04

-Our customers are... Sorry.

-15 to 35-year-olds.

-Yep.

0:32:040:32:08

We work with different illustrators to create our one-off, quirky prints

0:32:080:32:12

and we follow the trends.

0:32:120:32:15

We've had great press. We've been in magazines such as Closer,

0:32:150:32:18

Look, Company and Cosmopolitan

0:32:180:32:21

and we're also loved by girl band The Saturdays.

0:32:210:32:24

Since starting trading in 2009,

0:32:240:32:27

we are now in 60 stores as well as a major high-street department store.

0:32:270:32:33

Thank you for listening. We'd now like to invite any questions.

0:32:330:32:37

'A bright pitch from East London twins Polly and Charlotte Vickery.

0:32:410:32:46

'In return for a 20 percent stake in their online and high-street fashion label,

0:32:460:32:50

'they need a £65,000 cash injection.'

0:32:500:32:53

-I notice a few people have got a horse. You've given me a pig.

-We thought it was rock 'n' roll.

0:32:530:32:58

'Retail fashion expert Theo Paphitis

0:32:580:33:01

'is first to question the young entrepreneurs.'

0:33:010:33:05

Guys, hello, I'm Theo.

0:33:050:33:07

How many pieces in the range?

0:33:070:33:09

-About 25.

-Is that normal?

0:33:090:33:12

-No. Our autumn/winter range is a lot bigger.

-Yeah.

-Give me numbers.

0:33:120:33:16

-About 35.

-And up to this stage,

0:33:160:33:20

-you've just been T-shirts?

-And sweatshirts.

0:33:200:33:24

OK. So what makes you comfortable about moving into other products? I assume it's dresses?

0:33:240:33:31

-Dresses, tops.

-Tops.

-And skirts.

-Skirts.

0:33:310:33:34

-Well, most of our customers have asked us for different products.

-They want to see a full range.

0:33:340:33:40

And also, I think, with our previous experience dealing with factories,

0:33:400:33:45

we know all the problems that can go wrong.

0:33:450:33:47

-We've dealt with that.

-We're quite comfortable with how to move forward.

0:33:470:33:51

What sort of margin are you achieving?

0:33:510:33:54

-38 percent?

-Gross profit is 41 percent.

0:33:540:33:58

And net profit is 15 percent.

0:33:590:34:03

A typical order will be how much presold and how much for stock?

0:34:030:34:07

Probably 80 percent presold

0:34:070:34:10

-and then maybe 10 to 20 percent stock.

-So you're not being that adventurous.

-No.

0:34:100:34:16

Well, cash flow, isn't it? So we have to be careful.

0:34:160:34:19

'Targeted questioning and detailed responses. It's a good start for the duo.

0:34:220:34:27

'But what of the brand itself? Duncan Bannatyne wants to know.'

0:34:270:34:32

-Erm, Brat & Suzie.

-BOTH: Yep.

0:34:330:34:37

-Where did the name come from?

-We had two cats when we were little and they were called Brat and Suzie.

0:34:370:34:43

-And we really loved them.

-And that became the name of your business.

0:34:430:34:46

-When was the company formed?

-Two years ago.

-Yeah.

-Two years ago?

-Yeah.

0:34:460:34:52

-And what was the turnover for the first year?

-Er, 77,000.

0:34:520:34:56

We made 9,000 net profit.

0:34:560:34:59

-And the second year?

-105,000.

0:34:590:35:01

And we made 15,000.

0:35:010:35:05

When you say you're in stores, what kind of stores?

0:35:060:35:09

-Independents or chains?

-Independents and then Joy and also House Of Fraser.

0:35:090:35:15

-What did you do before?

-I used to work in production at River Island,

0:35:150:35:19

-my background is fashion production.

-And I was a designer at Miss Selfridge

0:35:190:35:23

and I've worked for high-street suppliers as a designer.

0:35:230:35:26

'The confident fashion twins are going down well in the den.

0:35:300:35:35

'But Peter Jones thinks he's spotted a flaw in their business model.'

0:35:350:35:39

Your gross margin seems to be very low.

0:35:410:35:44

-41 percent?

-Mm.

-Yeah, we're working on that.

0:35:440:35:48

Because we don't have the larger orders,

0:35:480:35:51

we're still paying quite a high cost price for our T-shirts.

0:35:510:35:56

But once we get larger orders,

0:35:560:35:58

we'll be able to negotiate better prices with our factories.

0:35:580:36:02

The second issue is the copycats. Cos it means you've got to continue to innovate

0:36:020:36:07

-and come up with new designs.

-I think with our design, especially Charlotte's design background,

0:36:070:36:13

we're always moving with the trends anyway,

0:36:130:36:16

so we won't have things on the rails, hopefully, for too long.

0:36:160:36:20

-We'll have new things coming in.

-And we do have loyal customers and we're selling it on our personalities.

0:36:200:36:25

And the high street are always going to copy something.

0:36:250:36:28

-So, Polly, Charlotte, hi, I'm Deborah.

-BOTH: Hello.

0:36:290:36:32

-What are you paying for your illustrations?

-We pay... It's quite small.

0:36:320:36:36

-We pay £20 to each illustrator.

-Flat fee.

0:36:360:36:40

We blog about them and we help them out as much...

0:36:400:36:44

-So they see it as a way of getting their illustrations around.

-Yeah.

-I think it's great.

0:36:440:36:49

-I love the illustrations.

-BOTH: Thank you.

-But I don't see this

0:36:490:36:54

as a strongly-branded clothing range. I know you'll say it's your illustrations,

0:36:540:36:59

but as Peter said, it's quite easy to find another illustrator and print on a T-shirt.

0:36:590:37:04

So to turn this into a real, "That's brand Suzie,"

0:37:040:37:08

-you need to come up with something a lot stronger.

-Yep.

0:37:080:37:12

You've got a good eye, you've got a good turnover, you're in some good shops,

0:37:120:37:17

just keep going at it. But it isn't yet a strong brand. Hone that down so it's got a look.

0:37:170:37:24

-Thank you.

-For that reason, I won't be investing. I'm out.

-BOTH: Thank you.

0:37:240:37:29

'A first blow to the duo's investment hopes.

0:37:310:37:35

'But four Dragons still remain.

0:37:350:37:38

'Will retail expert Theo Paphitis take a different view?'

0:37:380:37:41

I love seeing new designers.

0:37:440:37:47

I love people who bring out new ranges.

0:37:470:37:49

It's like the life blood of the industry. But I've got to agree with Deborah. I'm looking...

0:37:490:37:56

I think, though, with investment and with going forward, with more time to expand on the range...

0:37:560:38:03

Look. Your margins are rubbish.

0:38:030:38:05

You need to be able to work a lot sharper than that.

0:38:070:38:10

You won't be able to do that without substantially bigger volumes. So for a long time,

0:38:100:38:15

unless you are actually able to get big orders from the multiples,

0:38:150:38:19

you're not going to be able to work those margins down.

0:38:190:38:22

That, necessarily, is not the end of the world.

0:38:220:38:25

Problem is, the name's great but there's no overriding brand yet.

0:38:250:38:32

I think we're close. I think with the magazine coverage, as well, that we've had,

0:38:320:38:37

because it's really hard to reflect the brand just on a rail, here, now.

0:38:370:38:44

-No, it's not. I'm sorry. Remember, that's what you've got.

-Yeah.

-That is you.

0:38:440:38:48

-And that rail has to represent you and your brand.

-Yeah.

0:38:480:38:54

-So I'm out, but real good luck from me.

-BOTH: Thank you.

0:38:540:39:00

Charlotte, Polly, you know, the fact is, you're in the industry.

0:39:000:39:03

I'm not. So there's not really anything I can add to your company.

0:39:030:39:08

-Mm-hm.

-I can't really bring you any expertise to help you sell your product. So I'm out.

0:39:080:39:15

Polly, Charlotte.

0:39:150:39:18

-I invested in the den in a business with Victoria McGrane called Neurotica.

-BOTH: Yeah.

0:39:180:39:24

We're right in talks at the moment about actually having to go in and invest more money today,

0:39:240:39:29

purely on the basis of the fact that as she scaled her business,

0:39:290:39:33

-she can't fulfil the orders...

-Yeah.

-..without a fair amount of cash.

-OK.

0:39:330:39:38

-It's a capital-intensive business.

-Yeah.

-It's not something I can invest in so I'm out.

0:39:380:39:44

'Three Dragons walk away from the deal

0:39:480:39:51

'and the crest-fallen twins have just one opportunity left.

0:39:510:39:56

'Can Hilary Devey find a reason to invest?'

0:39:560:40:00

So, it just leaves me. I've had experience in the rag trade.

0:40:010:40:05

And I know how difficult a market it is.

0:40:050:40:09

-But it's so much fun working in the rag trade.

-I know so many companies that have gone under.

-Mm.

0:40:090:40:14

Come back, go under, come back, so many brands that were top of the...

0:40:140:40:19

But we are sensible. We're not going to do anything irrational.

0:40:190:40:23

I can't think of any other sector that's more high risk

0:40:230:40:28

in every possible facet.

0:40:280:40:31

Down from production, to the logistics of it,

0:40:310:40:34

to the manufacturing, to the sourcing of the garment, to the retailing of the garment,

0:40:340:40:38

-to getting it there in time, you know...

-That's all part of the fun.

0:40:380:40:42

Well, it's part of the fun if you're doing it with my money.

0:40:420:40:46

-But it's not part of the fun if it is my money.

-Agreed. But we...

-I mean, what is your vision?

0:40:460:40:51

We want to get into doing denim, accessories and outerwear, maybe have a shop, and then...

0:40:510:40:56

Oh, God. I was hoping you wouldn't say that.

0:40:560:40:59

I don't think we do want to have a shop. That's her idea.

0:40:590:41:02

-Don't listen to her.

-Don't listen to me.

-I don't think we should have a shop.

0:41:020:41:06

My heart is saying "I'd really love to work with you, it would be fantastic fun."

0:41:060:41:10

I'm really into fashion. I love it. But my head, commercially, is saying "Wow, Hilary. No! No! No!"

0:41:100:41:17

-But you're both clearly very, very talented girls.

-BOTH: Thank you.

0:41:170:41:22

-So I'm out.

-Good luck.

-Thank you.

-Bye.

0:41:220:41:26

'Polly and Charlotte charmed the Dragons,

0:41:280:41:31

'but couldn't convince them there was a big enough financial future for their business.

0:41:310:41:35

-'They leave with nothing.'

-Amazing. All of us really liked them. But they didn't get investment.

0:41:350:41:41

They're not going to be a success this time round. We all recognise that.

0:41:410:41:44

-They only need one bad order and they're finished.

-Correct.

0:41:440:41:49

'Other entrepreneurs who tried and failed in the den included Michelle Smith from Dorset.

0:41:560:42:02

'She needed £80,000 for her aptly-named motorbike accessory

0:42:020:42:06

'that gives pillion passengers a more secure ride.'

0:42:060:42:10

StickiButt is a two-part harness system that stops a person from sliding whilst seated.

0:42:100:42:16

Part one is the harness, which is worn by the individual.

0:42:160:42:20

The second part is a seatbelt that fits on the motorcycle.

0:42:200:42:24

'In the absence of a test track...'

0:42:240:42:27

-You're welcome to try and destroy it.

-Don't tempt me.

0:42:280:42:31

'..the innovative entrepreneur had an unusual method of demonstrating her product.'

0:42:310:42:37

-Can you do it with no hands?

-No!

-THEY LAUGH

0:42:370:42:42

'But whereas The Den-Destroyer couldn't fault her invention,

0:42:440:42:48

'the remaining Dragons did destroy Michelle's hopes of investment.'

0:42:480:42:52

You're dealing with such a niche market that it isn't a business.

0:42:530:42:58

You may sell a few, but I don't think

0:42:580:43:01

it's going to keep you in luxury or even comfort. So I'm out.

0:43:010:43:06

'David Baker from West Sussex wanted £150,000 for just ten percent

0:43:070:43:13

'of his modern take on a layout originally patented back in 1878.'

0:43:130:43:17

I've been developing a new style of keyboard for these screens.

0:43:170:43:21

They use a triangular key. This helps to stop hitting two keys at the same time.

0:43:210:43:27

'One multi-millionaire gave a rare glimpse of what he gets up to in his spare time.'

0:43:280:43:33

-How many do you think you can sell?

-Well, can you name a popular App? Any one.

0:43:330:43:38

-Angry Birds.

-44 million on the iPhone alone.

0:43:380:43:42

I don't think you can compare that with Angry Birds.

0:43:420:43:45

Not only have we downloaded Angry Birds, we've downloaded Angry Birds Christmas Special, Easter,

0:43:450:43:51

-Angry Birds Guy Fawkes Night.

-OK.

-There's so many.

0:43:510:43:54

'But it was an angry Dragon who marked the end of David's time in the den.'

0:43:550:44:00

You stand in front of a group of people who could change your life overnight.

0:44:000:44:05

You come in here and you say, "I value this at 1.5 million,

0:44:050:44:09

"although I've only got £1,200 of turnover."

0:44:090:44:12

Well, if you would like to, sort of, put forward what you deem to be a better offer...

0:44:120:44:17

Listen, I wouldn't give you £150,000 for 100 percent of it at the moment!

0:44:170:44:22

-And therefore, the next two words that come out of my mouth are...

-I'm out?

-I'm out.

0:44:220:44:28

Didn't even need a predictive text.

0:44:280:44:30

Entrepreneurs often have ideas for businesses from their own hobbies.

0:44:330:44:38

Former fireman Andy Bates from Suffolk turned his passion for motor racing into his own company.

0:44:380:44:44

Now he wants a Dragon on board to help bring his latest development to market.

0:44:440:44:48

My name is Andy Bates and I'm here today to ask you for an investment of £50,000

0:45:170:45:23

for ten percent of the equity in my company, AB Performance Ltd.

0:45:230:45:27

I set the company up after a high-speed racing accident effectively ended my racing career,

0:45:270:45:32

and my Fire Service career of 24 years.

0:45:320:45:35

During some long, enforced days in hospital, I had time to consider the future.

0:45:350:45:39

The area that interested me was motorsport.

0:45:390:45:42

At the same time, British motor racing circuit owners were throwing their doors open to the public.

0:45:420:45:47

Anyone could take to the track in the car of their choice.

0:45:470:45:51

It became obvious to me that the bike-powered car had a large part to play in all of this.

0:45:510:45:56

Relatively low build costs, and the ability to out-accelerate, out-brake

0:45:560:46:01

and out-turn many factory supercars costing ten times the amount.

0:46:010:46:05

So, first came my engine business.

0:46:050:46:09

Sourcing, supplying, importing, stripping,

0:46:090:46:12

rebuilding and tuning superbike engines specifically for use in cars.

0:46:120:46:17

The next logical step was Sabre. Take all of the information and produce our own factory supercar.

0:46:170:46:23

Sabre, at its first race this year, went from position 26 to position two in 18 laps.

0:46:230:46:29

Thank you very much for your time and I'd like to open the floor to questions now.

0:46:290:46:34

-Can I have a look?

-Yes.

0:46:340:46:36

'An eye-catching pitch from automobile enthusiast Andy Bates.

0:46:390:46:43

'He's hoping that by having two sides to his business,

0:46:430:46:47

'manufacturing racing cars, as well as servicing the motorbike engines,

0:46:470:46:51

'he'll tempt the Dragons to invest £50,000 for a ten percent stake.

0:46:510:46:56

'Something seems to have intrigued Duncan Bannatyne.'

0:46:560:47:00

Andy, tell me a little bit more about your accident.

0:47:030:47:06

Erm, I basically ran out of talent.

0:47:060:47:10

I made a mistake one day and hit the wall at Oulton very, very fast. I broke my spine in four place,

0:47:100:47:16

-and basically shattered my right knee.

-How long did it take you to recover?

-About two years.

0:47:160:47:22

-And when you were racing, was it part-time and you were also a full-time fireman?

-Yeah.

0:47:220:47:27

When I then went back, I had to prove that I was physically fit enough to do the operational side of the job.

0:47:270:47:33

I knew the damage to my right knee was the big problem.

0:47:330:47:36

So I basically went out on ill-health in the end.

0:47:360:47:40

-Right.

-This business came as a change I wasn't expecting.

0:47:400:47:44

I'd worked for the Fire Service for so long, I think you start thinking,

0:47:440:47:48

"Cos I've done this for so long, it's all I can do."

0:47:480:47:50

I had to find something and the only thing I knew how to do was motorsport.

0:47:500:47:55

'A compelling story from the passionate entrepreneur. But what of his company?

0:47:570:48:03

'Theo Paphitis is next to cross-examine the Suffolk-based race engineer.'

0:48:030:48:08

-Andy. I'm Theo.

-Pleased to meet you.

0:48:110:48:15

Before I get to the serious questions,

0:48:150:48:18

what's its 0 to 60, 0 to 100?

0:48:180:48:21

-Probably around about 3.6 to 3.8 second mark.

-OK. That's the 60?

0:48:210:48:25

-Yeah.

-OK. You haven't given me a price.

0:48:250:48:29

To give you an example, this car here retailed at £25,000.

0:48:290:48:33

-What chassis have you got them on?

-We make our own.

0:48:330:48:36

You said the investment is to go into your main holding company.

0:48:370:48:41

-Yes.

-How long have you had that, and what's the numbers on that?

0:48:410:48:44

If I can give you the background that led to where I am now. Five years trading as a sole trader,

0:48:440:48:49

during which time, total turnover

0:48:490:48:51

£630,000,

0:48:510:48:53

of which I generated £67,000 net profit.

0:48:530:48:58

I didn't see the profits I should've because I ploughed it into this project.

0:48:580:49:02

This year, I changed the company to a limited company,

0:49:030:49:06

I've got fixed assets of about £120,000,

0:49:060:49:10

-and I've got work in progress in the unit valued at £15,000 at the moment.

-OK.

0:49:100:49:15

What do you think I, or any of the other Dragons,

0:49:150:49:19

can add to your business?

0:49:190:49:22

Er, if I'm totally honest with you, I have a very, very high understanding of this,

0:49:220:49:26

of this, the mechanics of all of this. The business lessons have come hard and fast,

0:49:260:49:32

I was never a businessman. I know I can make money doing it.

0:49:320:49:36

What I am looking at now is getting somebody on board who has an interest in the company,

0:49:360:49:41

and helping me push it to what I know the next level is.

0:49:410:49:44

'Fluent and articulate responses. The Dragons have certainly warmed to Andy.

0:49:460:49:51

'Now Peter Jones wants to drill down into the company financials.'

0:49:510:49:56

Hi, Andy, I'm Peter. Erm, compelling pitch from a visual perspective.

0:49:590:50:03

I love cars. You're taking a passion, a love.

0:50:030:50:07

The reality is now you're getting to a stage where,

0:50:070:50:10

"How do I turn this into some sort of business that is going to give me a bit of a future?"

0:50:100:50:15

You know, where could this go?

0:50:150:50:17

-Where is the money?

-My projections are as follows. I've assumed ten percent growth,

0:50:170:50:22

I've based it on the sale of two cars in year one,

0:50:220:50:26

five cars in year two...

0:50:260:50:29

-Give me a profit number.

-The first four months of the year are usually quietest.

0:50:290:50:33

-I've had my best four months of trading this year.

-OK.

0:50:330:50:38

So I think we will turnover £200,000 this year

0:50:380:50:41

-and I will make £40,000 net profit. Year two...

-Hang on, hang on!

0:50:410:50:45

You sell the cars at £25,000 each. You're only going to sell two. That's £50,000.

0:50:450:50:50

-Where's the other £150,000 coming from?

-From the rest of the business, it's investment in the whole company.

0:50:500:50:56

So where's the rest of the business, in terms of that profit, that 150K?

0:50:560:50:59

I've already turned over 60,000 in the first four months of this year.

0:50:590:51:03

-And what else do you do?

-Servicing, tuning, rebuilds of cars that have crashed.

0:51:030:51:08

Anything to do with racing, driving bike-engine cars, we do at AB Performance.

0:51:080:51:13

'A quick-fire exchange

0:51:150:51:18

'and Andy seems as knowledgeable about his numbers as he is with his engines.

0:51:180:51:22

'But he is yet to receive an offer.

0:51:220:51:25

'Has Hilary Devey heard enough to part with £50,000?'

0:51:250:51:29

Andy.

0:51:330:51:35

Have you thought of any other markets for this?

0:51:360:51:39

Yes. I've got a chap in America

0:51:390:51:42

who's been asking questions about, "What are we doing with the car? Could we get one?"

0:51:420:51:47

A guy in Switzerland has enquired about it,

0:51:470:51:49

but it's not cast in stone, and I wouldn't dare say, "Look, we've got a marketplace."

0:51:490:51:55

OK.

0:51:570:51:59

I'm struggling to find a bigger market than what you're currently looking at.

0:52:000:52:04

-I mean, they can't be used as a road car, can they?

-Yes, you could have this car on the road.

0:52:060:52:10

As long as we comply with emissions, the position of the lights.

0:52:100:52:14

-This one's too low. We'd have to jack this up a bit.

-How safe is it?

0:52:140:52:17

We have an issue with the fact that we've got to make the bodywork lighter,

0:52:170:52:21

I wouldn't compromise the chassis. It's a fully-triangulated chassis. The side...

0:52:210:52:25

You've lost me now. I haven't got the slightest clue what you're talking about.

0:52:250:52:29

It's not really my market, and what worries me more is what could I bring to you.

0:52:300:52:37

-I'm out.

-Thank you very much.

0:52:380:52:39

'Andy's impressive run comes to an end, as Hilary Devey fails to spot money-making potential.

0:52:420:52:49

'Will Deborah Meaden find a reason to invest?"

0:52:490:52:52

Andy.

0:52:550:52:57

How many of this type of car will be in existence right now?

0:52:570:53:00

Right now, there's no way of putting a number on the bike-engine cars that are used on the road.

0:53:000:53:06

Race series, there are probably

0:53:060:53:08

400 or 500 serious race cars

0:53:080:53:12

with bike engines that I'm aware of. I think it's a market that will increase.

0:53:120:53:16

I've got to say, you come across really well,

0:53:160:53:20

but the trouble is, you haven't been able to show a clear way

0:53:200:53:25

to make money with this car. So, I'm sorry, for that reason, I'm out.

0:53:250:53:29

Thank you for your time, I appreciate it.

0:53:290:53:31

Andy.

0:53:310:53:33

You sound great, you're having a ball.

0:53:340:53:37

You're looking for a partner, not just a financial partner,

0:53:370:53:40

you're looking for a pretty hands-on partner.

0:53:400:53:44

I'd have to be spending more time with you and your business than I spend on my own business.

0:53:440:53:49

-Fine.

-So I'm going to wish you the best of luck, I'm out.

0:53:490:53:54

'Two more Dragons walk away from the deal.

0:53:570:54:00

'But has Peter Jones spotted an opportunity where his rivals have not?'

0:54:000:54:05

Andy. I love your honesty.

0:54:110:54:14

And you've been very straight in terms of how you got to this stage.

0:54:140:54:20

But it's a pretty limited market, so you're going to need a lot of time, or at least...

0:54:210:54:27

..a lot of effort in turning what you've currently got and making it into a business.

0:54:280:54:34

And I think that makes it, unfortunately, a very difficult decision for anybody to invest.

0:54:340:54:39

That's where it kind of falls down.

0:54:410:54:43

Erm...

0:54:440:54:46

But it also falls up, in terms of...

0:54:480:54:51

..I've got some thoughts, of what could be done, and...

0:54:530:54:58

..I am annoyingly into cars,

0:55:000:55:02

and I'm not being blinded by it,

0:55:020:55:05

but I have got some ideas.

0:55:050:55:08

So, I've decided to make you an offer...

0:55:110:55:14

Thank you.

0:55:140:55:16

..for all of the money.

0:55:180:55:20

But in return, I want 35 percent of your business.

0:55:250:55:30

Right. OK.

0:55:350:55:37

'A dramatic about-turn and Andy's thrown a financial lifeline.

0:55:400:55:45

'But Peter Jones is demanding three-and-a-half times the equity originally on offer.

0:55:450:55:51

'With one more Dragon remaining, can the likeable entrepreneur negotiate himself a better deal?'

0:55:510:55:57

Andy. I'm really surprised that Peter made you an offer

0:55:580:56:02

without getting a second and third years' turnover and profits.

0:56:020:56:07

-So what are they?

-Second year was £300,000,

0:56:070:56:11

-net profit at £60,000.

-Yep.

0:56:110:56:14

And year three, £500,000 turnover, with a net profit of £100,000.

0:56:140:56:20

So I am going to make you an offer.

0:56:240:56:26

But I want a higher percentage.

0:56:280:56:32

I'll offer you £50,000,

0:56:350:56:38

but I want 50 percent of the business.

0:56:380:56:40

But, you reach those projections over the next three years

0:56:400:56:44

and I'll reduce that to 25 percent.

0:56:440:56:47

Thank you.

0:56:550:56:57

Sorry. I wasn't expecting to have one offer, let alone two on the table.

0:57:000:57:04

I think I'd like to take your offer, Peter.

0:57:250:57:27

-Thank you very much. Appreciate it.

-You're welcome.

0:57:280:57:31

-Well done. Fantastic!

-'Andy has done it! The investment comes at a price,

0:57:310:57:36

'but he walks away with the backing of a passionate and influential Dragon on board.'

0:57:360:57:41

Well, Andy, well done! Tell me why you took Peter's offer rather than Duncan's,

0:57:440:57:48

cos Duncan's could have been better if you met all your targets.

0:57:480:57:51

Well, I did some research going in, knew Peter's interest in motorsport.

0:57:510:57:55

I think for what we need, you need passion,

0:57:550:57:58

and I wanted Peter on board, really, to drive the project.

0:57:580:58:01

So the offer was a bit tighter, but I think he's the man we needed in place.

0:58:010:58:06

They say that perseverance pays, and it certainly has for Andy Bates.

0:58:140:58:20

Five years of hard graft building up his business,

0:58:200:58:23

and he had two multi-millionaire investors vying for a share in his company.

0:58:230:58:28

To hear more from the entrepreneurs about their time in the den, press the red button now.

0:58:280:58:33

You can also visit our website, bbc.co.uk/dragonsden

0:58:330:58:37

Goodbye.

0:58:370:58:39

'Next time on Dragons' Den.'

0:58:390:58:43

-A fatality has happened in the den.

-Duh-duh-duh!

0:58:430:58:46

-How much money have you put into this business?

-£200,000.

-Oh, my God!

0:58:460:58:50

You can see it going, "Tweeky-weeky-weeky-whoo!"

0:58:500:58:54

Shouldn't you have investigated why your turnover's growing

0:58:540:58:57

-but your profitability's remaining static?

-Perhaps, yeah.

0:58:570:59:01

I like the product. I'll make you an offer.

0:59:010:59:03

Subtitles by Red Bee Media Ltd

0:59:060:59:10

E-mail [email protected]

0:59:100:59:14

Download Subtitles

SRT

ASS