Dragons’ Den: Series 12, episode 12
An intriguing finale episode as Duncan Bannatyne marks his last ever investment in the Den and Piers Linney and Kelly Hoppen declare themselves “out” of the show…
From chocolate-flavoured grasshoppers to bespoke tailoring, there were a variety of pitches in last night’s Dragons’ Den show; the finale episode of Series 12.
With Duncan Bannatyne, Piers Linney and Kelly Hoppen all bidding farewell to the Den, it was touch and go to find out whether the departing Dragons’ would make one final investment but a pitch from a Glasgow-based drinks entrepreneur caught Bannatyne’s attention.
Deciding whether to “make or break” the dreams of entrepreneurs, find out which pitches earned praise from the investor panel and which were deemed to be “as flat as a pancake”, as well as the business lessons you can take from them…
Concept: Eco-friendly mobile skip business
Investment sought: £50,000 for 15% equity
Investment received: None
While skips aren’t the most glamorous product, business owners Jon Ray and Craig Chatwin were looking to bring “skip hire into the 21st century” with their eco-friendly mobile, non-permit skips on wheels. “Designed to maximise efficiency and reduce carbon footprints”, the Glasgow entrepreneurs wanted the funding to grow the business but Duncan Bannatyne promptly asserted that he “didn’t really get it” and questioned the no permit aspect.
Ray explained that the herbie skips didn’t require a permit as they were on wheels which save time and money to which Bannatyne, Jones and Piers Linney quickly pointed out that the skip would get a parking ticket for being on the road. While Ray asserts that a parking ticket couldn’t be given to an unmotorised vehicle, all three Dragons seemed skeptical and Linney concluded that the “council would introduce regulations to get around that”.
Kelly Hoppen initiatially appeared excited about the product and said that “it could be something brilliant” but was doubtful over how the herbie skip would work in built up areas and London towns with regards to parking regulations and was the first to walk away from investing.
Meaden was less skeptical and said that “having been in the business” she could “see exactly why it would be used”. Jones, on the other had, was in “complete disagreement” with Deborah and passed up the investment opportunity with the comment that “it’s the most overengingeered skip on wheels I’ve ever seen”.
Bannatyne then quizzed the duo on the practicalities of the skip and, after the discovery of a protruding axel at the back of the skip, all of the Dragons were in agreement that the skip was too big and wouldn’t be allowed to park on the road. These uncertainties led to Bannatyne and Linney both declining to invest.
Meaden’s earlier enthusiasm had also wained and, on noting that “size is definitely a problem”, she too said she was out with the herbie founders unable to get their business on the road.
Start-up business lesson: When pitching to investors you’ll get asked a variety of questions, from the practical to financials and legalities, make sure you come fully prepared in order to avoid appearing vulnerable.
Company: Dave’s Snacks
Concept: Edible insects
Investment sought: £20,000 for 20% share
Investment received: None
A pitch that didn’t really have legs from the start – food entrepreneur Chris Passmore was looking for investment for his edible insect business Dave’s Snacks which featured barbeque and chocolate-flavoured grasshoppers and crickets. The Dragons’ immediated loooked at Passmore in dismay as he announced his plans to introduce the product to the university market and then expand into pubs and bars.
After trying the crickets for himself, Bannatyne’s issue was less on the product but more to do with the taste “it’s 20% flavouring, 80% cricket, why can’t you just give me one without all the bbq and powders?”and he and Jones both agreed that Dave’s Snacks wasn’t an investment opportunity.
Meaden took issue with the fact that it was a “joke product” and said that it was likely to “do more harm that good as it means people don’t take it seriously” while Hoppen said the snacks “made her feel sick”. She explained: “I can’t imagine why I would want to buy that and not a packet of crisps. People eat snails, kangaroo but this is just taking it to another level” and with that she too was “out” of the investment offer.
Start-up business lesson: Investors need to take you seriously in order to back your business – if your product is “jokey”m you’ll need to consider ways to pitch it in a convincing, credible manner or pursue an alternative funding route.
Company: Nae Danger
Concept: Sports energy drinks
Investment sought: £200,000 for 10%
Investment received: £200,o00 for 30% (Peter Jones and Duncan Bannatyne”
A pitch with two businesses for the price of one as Glasgow business owner Ross Gorley explained how he wanted investment for his sports energy drink business, Nae Danger, and was giving a share of that as part of his established wholesale cash and carry company. Sharing statistics on how the energy drinks market is set to grow from “around £1.5bn to £2.4bn by 2017”, Gorley discussed how he would look to compete with market leaders in the energy drink sector by replicating their strategies.
Bannatyne was immediately keen to know more about the cash and carry company and Gorley shared how he and his brother owned it and turnover to 2012 was £4.2m, with 2013 turnover estimated at around around £4.6m. Although Gorley admitted he was “not sure of net profit” as he hadn’t had to commit these detail to Companies House yet, he helped any doubts on his £2m valuation by revealing that he had a £1m property on the books which seemed to appeal to Bannatyne and Jones.
While the focus lent to the cash and carry business. Linney was more interested in the drinks aspect of the pitch and wanted to know how much equity Gorley would want to give away if Nae Danger was an entirely seperate business. Gorley’s response “probably around 30% for £200,000” seemed well received by Linney but Linney said that as he “wouldn’t be able to scale the drinks comapny or compete with the big boys so it wasn’t one for him”.
Likewise, Hoppen held a similar view and wasn’t excited about offering; “essentially it’s a cash and carry that is doing incredibly well and I’m out” leaving Jones, Meaden and Bannatyne to share their verdict on the pitch.
While Jones felt the pitch “was as a flat as a pancake”, he made it clear that was interested and said that he was happy to “give £100,000 for 15% of the company” as “I think you’ve got something”. With one offer on the table, Gormley needed another Dragon to match Jones’ offer.
Meaden explained that this matched offer would not come for her as “half of the £2m valuation lies in your £1m property and I don’t want to make a property play and there’s good profit but not huge profit so I won’t be investing in you. I’m out”.
There was an unnerving wait as Bannatyne was left to make a decision on the business that he felt was “tempting”. After deliberating, Bannatyne asserted that he was going to match Jones’ offer; marking his final ever deal in his 10 years on the Den.
Yet Linney remained unimpressed with a final remark to Bannatyne that Gormley “pitched a drinks business and you invested in a cash and carry”.
Start-up business lesson: Investors need to be clear as to what it is that they’re going to be investing in – while Gormley was successful in his pitch for a share of both businesses, other entrepreneurs may not achieve the same success.