Dragons’ Den: Series 11, episode 6
Once again it was Duncan Bannatyne taking the only investment of the episode, in his 'deal of the year'
Again, it was the fiery Duncan Bannatyne who provided this week’s sole investment and the last of the first-half of the series – backing fast-growing student fashion company Young Ones in what he called ‘the deal of the year’. Elsewhere, an ambitious luxury cordial company left the den empty-handed but with some sage advice from the Dragons about offering too much equity and Manu Badwaj saw his customised engagement ring proposal turned down.
Tom Carson and Chris Rear
Company: Young Ones
Concept: Clothes label targeted at the UK’s two million university students
Investment sought: £75,000 for 15% equity
Investment received: £75,000 for 40% equity (Duncan Bannatyne)
From being a product intended exclusively for babies, the humble ‘onesie’ has risen to become a near-ubiquitous feature in student living rooms across the country. Much of this is down to entrepreneurial student duo Tom Carson and Chris Rear, whose company Young Ones has capitalised on the trend to become the UK’s leading custom onesie supplier. Carson and Rear came into the Den seeking funding to expand their onesie business into a holistic fashion label specifically targeted at university students in the UK, emulating other success stories such as Jack Wills and Superdry. The pair’s impressive pitch saw Meaden agree with their assertion that onesies would prove to be more than a passing trend, with Rear pointing out that the garments are bought with comfort, not fashion, in mind.
But in spite of the duo’s confident performance, concerns over the branding were enough to put off the majority of the Dragons. Jones ruled himself out after pointing out that the logo adorning all of their products – a large, stylised YO – would bring them into conflict with leading brand YO! Sushi and predicted that the larger company would end up litigating them out of existence. Experienced designer Hoppen also pulled out, agreeing that the duo needed to work on the ‘look and feel’ of their products. Meaden ruled out a deal after telling the pair that having an experienced and wealthy venture capitalist on board Young Ones would undermine their ad-hoc, student ethos.
In the midst of this, Linney had also bowed out, leaving only Bannatyne – sitting stuffed into a custom-made bodysuit brought by the pair – as Carson and Rear’s only hope of getting a deal. Whilst agreeing with the other Dragons that there were a ‘few issues’ to iron out, he made Young Ones an offer of all of the money, but for a substantially increased 40% stake in the business. His refusal to budge on the terms sent Carson and Rear into a whispered conference, during which the phrase ‘this is exactly what your Dad told us not to do’ was heard; but, nevertheless, the pair agreed to what Bannatyne told the Dragons afterwards was the ‘deal of the year’.
Start-up business lesson: Parents are normally right – don’t let pressure on the day of pitching (Dragons’ Den or elsewhere) sway you into giving away too much equity, once it’s agreed – that’s it forever
Manu Bhadwaj (honourable mention)
Company: Hot Pink
Concept: Online bespoke engagement ring design
Investment sought: £100,000 for 35% equity
Investment received: None
- Manu Bhadwaj’s online customised engagement ring service caused yet more controversy in the Den, with design guru Hoppen stating it was one of the ‘saddest’ concepts she had ever seen. She point-blank refused to consider investing, saying the whole concept was an affront to the sacred ritual of picking out an engagement ring together.
- The other Dragons did not share Hoppen’s view but all bar Linney ruled themselves out; Bannatyne said the same service could be found at the back of any reputable jewellers, Jones was not interested and Meaden said he would be destroyed by competitors in a congested marketplace.
- Only Linney remained, and when he made a request to see an example of a finished ring, it exposed a flaw in Bhadwaj’s pitch. The ring was beautifully made and impeccably presented but had not made an appearance in the initial pitch, which focused entirely on the, albeit impressive, website technology. Den rules state than when a Dragon is out, they can’t come back in, and the entrepreneur received a ticking off from Meaden who said she may have invested had she seen the actual product.
- Linney quashed Bhadwaj’s last hope by saying he was just not willing to invest £100,000 in the product.
Start-up business lesson: When pitching a product-led technology, make sure you actually show the end product
John McFarlane and Georgie Rodwell (honourable mention)
Company: Norfolk Cordial
Concept: Adult-targeted soft drink cordial sold to the hospitality sector
Investment sought: £50,000 for 35% equity
Investment received: None
- Marketed as an adult alternative to the sparse range of non-alcoholic beverages sold in bars, McFarlane and Rodwell’s cordial boasted attractive, quirky branding and a range of exotic flavours, from elderflower to strawberry and lime; it was seemingly pitched perfectly to designated drinkers in bars and pubs everywhere.
- The pair also revealed the impressive product was already making waves in various luxury retail markets – Fortnum and Mason already stocked the cordial in its prestigious food hall and Middle Eastern expansion was on the horizon, with leading gourmet food producer Dean and Delucha having ordered 24 cases for its Kuwaiti and Qatari customers.
- Despite revealing what appeared to be the first stirrings of a successful brand, Jones was the first to rule out a deal. He told the pair they would need several hundred thousand pounds to make a dent in an industry dominated by multi-national conglomerates known for shutting out competition. Meaden agreed.
- The remaining Dragons were put off when the pair revealed that they had already given away 45% of their business to various friends – meaning that they would effectively cede control of their own business if they gained the investment they sought.
Start-up business lesson: If your business is your ‘baby’, make sure you retain a majority stake, particularly early on