Dragons’ Den: Series 12, episode 1
The twelfth season kicked off with two completed deals and a very surprising offer from Peter Jones...
Although the 12th season kicked off with two completed deals, the big story lay elsewhere, after Peter Jones turned down the chance to invest in entrepreneur duo Jake Hayman and Joe Kenyon – making them a surprise offer of a job instead.
Elsewhere, confident entrepreneur Jennifer Duthie managed to secure backing for her customisable children’s shoes venture, whilst swing dance entrepreneur Scott Cupit pulled a pitch back from the brink of disaster to land a £65,000 investment from former Strictly Come Dancing star Deborah Meaden.
Company: Swing Patrol
Proposition: Swing dance lessons
Investment sought: £65,000 for 10% equity
Investment received: £65,000 for 20% equity (Deborah Meaden)
Following the trend set by businesses such as Reggae Reggae Sauce and Skinny-Tan, the twelfth season kicked off with yet another musical pitch. Australian entrepreneur Scott Cupit waltzed into the Den surrounded by a troupe of swing dancers and invited the Dragons to take part in a two-minute lesson – an experience the normally cantankerous Duncan Bannatyne particularly enjoyed. Cupit called his business the “biggest swing dance school in the world”, and this claim was backed up by impressive figures; Swing Patrol had grown revenues to £280,000 (with £67,000 net profit) across five years of existence, and was now serving 1,200 students per week across 27 London venues.
The Dragons were charmed by Australian entrepreneur Cupit’s affable approach and impressed by his promising financials. However, the pitch ran into difficulty when he revealed the £65,000 investment would be used to purchase a large warehouse venue – complete with licensed bar – to run large-scale lessons and events. The Dragons had been under the impression that the business would be scaled up on a franchise model (a kind of ‘Zumba of swing’) and Cupit’s revelation that he essentially planned to open a nightclub instead was enough to send Piers Linney out of contention straight away, with the other investors set to follow suit.
Cupit managed to bring his pitch back from the brink of disaster when he indicated he would be willing to drop the nightclub idea altogether in return for investment, and suddenly the Dragons’ interest was piqued again. Kelly Hoppen matched Duncan Bannatyne’s offer of half the money for 10% equity, and the prospect of a health and dance nut teaming up with the owner of one of the largest health club chains in the country had Cupit grinning from ear to ear. However, it was former Strictly Come Dancing contestant Deborah Meaden who managed to secure a deal in the end with the same offer on her own behalf, after she talked up her “passion” for dance.
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Start-up business lesson: Don’t be inflexible with your proposition when pitching to investors – just listening to their suggestions could be enough to secure investment.
Proposition: Customisable wipe-clean children’s shoes
Investment sought: £60,000 for 20% equity
Investment received: £60,000 for 25% equity (Piers Linney and Kelly Hoppen)
Every year, Dragons’ Den sees another slew of pitches which fail to gain investment after entrepreneurs try to pull the wool over the Dragons’ eyes, papering over poor figures or dire financial straits with hubris and distraction tactics. It was refreshing, then, to see Jennifer Duthie’s straightforward and honest acknowledgement of her business’ flaws pay dividends after she secured investment for her children’s shoe business Skribbies.
The entrepreneur delivered a clear, confident pitch whilst three accompanying children played with her product, a range of children’s shoes which can be drawn on, wiped off and used again – as Duthie put it, essentially a “whiteboard on a shoe”. Although the business was in its infancy, Duthie revealed a number of high-profile retail deals in the pipeline, with a concession stand at House of Fraser secured, a meeting with Selfridges coming up and talks underway with France’s biggest retailer for an exclusive supply deal.
All very impressive, but an entrepreneur looking to enter the notoriously competitive shoe market should expect some tough questioning from the canny Dragons – and so it proved, with the investors picking apart every facet of Duthie’s business, from the lack of patent protection to the high cost of holding stock. Lesser entrepreneurs might have withered under such a grilling, but it seemed Duthie had an answer to every question, acknowledging the risks involved but displaying unshakeable faith in the potential of her business. Her sheer tenacity was not enough to win over Peter Jones, Duncan Bannatyne, and Deborah Meaden, however, who all bowed out after they opined that £60,000 was not nearly enough money to launch a shoe brand in such a tough industry. Whilst this was a concern shared by Kelly Hoppen and Piers Linney, the new Dragons were so impressed by Duthie’s ice-cool approach that they decided to team up yet again, with Duthie more than happy to accept their joint offer.
Start-up business lesson: Never let your confidence waver during a pitch; even if your business has flaws, passion and faith can go a long way in winning over investors.
Jake Hayman and Joe Kenyon (honourable mention)
Company: Frame Again
Proposition: Online photo framing business targeted at young people
Investment sought: £60,000 for 20% equity
Investment received: None
Young entrepreneurs Jake Hayman and Joe Kenyon hoped to capitalise on the deluge of photos flooding the web on sites like Instagram, Facebook and Twitter by offering a photo framing service specifically targeted at young people, allowing them to customise the look and feel of their minimalist plastic frames via an easy-to-use website. The pair’s pitch was confidently delivered, but their chances were dealt an immediate blow when renowned interior designer Kelly Hoppen said she “hated” the design, calling the bulky plastic frames “cumbersome”. The Dragons voiced further concerns when the duo revealed the high retail price of the frames, which would cost users a steep £21.99 – although the entrepreneurs confidently deflected the question by pointing to the fact more photos are being taken than ever, it was enough to rule Piers Linney and Kelly Hoppen out of contention. Duncan Bannatyne soon followed, calling the product “ugly”, and Deborah Meaden also bowed out after telling Hayman and Kenyon they would be undermined by established players in the industry as soon as their business gained traction.
It was left to the unusually subdued Peter Jones to rescue the pair’s chances; as the owner of photography giant Jessops, it seemed he was perfectly suited to take the business forward. Hayman and Kenyon admitted their plan was to scale up and exit to an industry big hitter like Jessops, and Jones commended the pair on their e-commerce offering, which he said was a “better version” of what Jessops were trying to create themselves. An offer was clearly forthcoming – but nobody could have predicted the form it would take. Jones declined to invest but offered to buy the pair out completely for £60,000, offering them both a full-time job at Jessops developing their business as a subsidiary of the larger brand. It was an astonishing development, and the entrepreneurs were clearly taken aback by what was a Dragons’ Den world-first. After some deliberation, however, they turned down the offer, telling Jones they would be back in a few years to sell their business to him at a much higher price.
Start-up business lesson: If someone offers you an easy exit early on, think carefully before accepting – you will be losing out on the chance to grow your business into something huge.