Dragons’ Den: Series 11, episode 1
The series kicked off with new Dragons Piers Linney and Kelly Hoppen marking their territory - by teaming up to secure sought after Skinny Tan
Series 11 began with both new Dragons making their mark, teaming up to undercut the old guard and snatch the show’s first deal – sought-after tanning product Skinny Tan. Veteran investor Peter Jones also invested in nervous entrepreneur Ross Mendham’s online fitness foods but not before telling him they tasted like ‘baby food’ and fellow food entrepreneurs Tayib Mushtaq and Adnan Bashir failed to wrap up a deal for their globally-inspired street food stalls.
Louise Cotton and Kate Ferguson
Concept: Spray-on fake tanning product which reduces the appearance of cellulite
Investment sought: £60,000 for 10% of the UK business
Investment received: £60,000 for 10% of the Australian and UK business (Piers Linney and Kelly Hoppen)
Expat entrepreneurial pair Cotton and Ferguson kicked off the new series in inimitable style as they emerged from the lift flanked by tanned, bikini-clad women, dancing and singing the praises of ‘Skinny-Tan’. The spray-on tan came with the remarkable claim that it also reduced the appearance of unsightly cellulite deposits, making it the world’s first dual-action product of its kind. Whilst their jingle wasn’t particularly catchy, their figures certainly were; just a month after incorporation, Skinny-Tan had concluded a deal with Australia’s biggest retailer and six months on had already generated revenues of more than £600,000 – with £450,000 gross profit. Cotton and Ferguson further sweetened the deal for the Dragons when they surprisingly revealed an intention to give away equity in the highly successful Australian arm of the business – making the backing ‘risk-free’.
Skinny Tan’s proven track record and promise of Australian equity proved an irresistible combination for the Dragons, and the Den was soon the scene of a five-way tug-of-war as all the show’s investors made offers. In the end, though, it was the two new Dragons who triumphed, with a joint offer of the full amount in exchange for 10% of the Australian and UK business combined. With a successful Australian venture under its belt and encouraging figures since launching in the UK with Linney and Hoppen’s help, Skinny-Tan looks set to follow Levi Roots as another Dragons’ Den success story.
Start-up business lesson: Having a proven concept dramatically increases your chance of securing angel investment
Company: Bare Naked Foods
Concept: E-commerce business selling high-protein, low-carb fitness foods such as flavoured protein noodles, for less than 30 calories per serving
Investment sought: £60,000 for 20% equity
Investment received: £60,000 for 50% equity (Peter Jones)
- Former personal trainer Ross Mendham’s high-protein, low-carb fitness foods looked the part, but apparently didn’t taste like it – Jones described the samples he handed out as ‘baby food’.
- Nervous even by Den hopeful standards, Mendham’s pitch faltered under rigorous questioning from Hoppen and Meaden over ingredients and he left the pitch in tears after a seemingly innocuous question from Jones.
- After returning, the young entrepreneur then revealed his wife had suffered a miscarriage and the pair were struggling to make ends meet running the business.
- Despite the underwhelming product and (understandably) shaky pitch, three Dragons were convinced enough by the product’s potential to make offers – Jones’ offer for half the business competing with Linney and Bannatyne’s joint offer.
- The emotional pitch was concluded when Mendham accepted Jones’ offer, much to the relief of all present.
Start-up business lesson: If your product isn’t already up to scratch, you could end up giving away significant equity
Tayub Mushtaq and Afnan Bashir (honourable mention)
Company: World Gourmet Restaurants Ltd (‘Wrap It Up’)
Concept: Street food-inspired global fast food wraps, sold from roadside stalls
Investment sought: £500,000 for 11% equity
Investment received: None
- The enterprising duo’s street food-inspired wrap stalls aimed to capitalise on the exploding market for wraps in the UK – last year they constituted a market worth £250m which accounted for 4% of the entire fast-food sector.
- Wrap It Up’s selling point lay in its global approach to food; cultures from across the world were represented, with the stalls selling everything from tandoori to Jamaican jerk chicken.
- Despite the strong brand and clear market potential, all the Dragons were turned off when it was revealed that the money they were asking for effectively valued their start-up at £4m – a figure Bannatyne said was ‘bonkers’. All bowed out in swift succession.
Start-up business lesson: An overly ambitious valuation will only serve to annoy seasoned investors