Dragons’ Den: Series 14, Episode 15

Want some tips on how to pitch to investors? From fitness start-ups to app companies, learn from the Den's investment hopefuls...

This week saw one of the show’s “most appealing” entrepreneurs secure offers from all five Dragons after a winning pitch for a dating app development company.

Elsewhere, a children’s fitness concept failed to get investor pulses racing while a stove ignition system didn’t spark interest and an Indian snack company couldn’t curry favour.

Read on for the business lessons you can learn from this week’s hit and miss pitches…

Steven Reynolds

Company: Micro Fitness
Concept: Fitness for children
Investment sought: £100,000 for 15% equity
Investment received: None

First to face the Dragons this week was Scottish entrepreneur Steven Reynolds, pitching a business aimed at encouraging children to get involved in fitness activities.

Focused on tackling the UK’s £15.8bn childhood obesity problem, Micro Fitness offers 21 different classes including mobile gym, scooter fitness, yoga, Zumba and martial arts to children aged three and over.

With sales set to hit £200,000, Reynolds announced that he was working with over 400 schools, organisations, special needs groups and councils across Scotland and was looking to become the “world’s leading fitness company for children”. He was seeking the funding to crack the council contract market, which the entrepreneur predicted would grow “exponentially” over the next 12 months.


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As well as council contracts, Reynolds said the funding would be used to open an office in Manchester, to buy more vans and equipment, and to hire staff and for advertising and marketing, to help support Reynolds’ projected turnover of £720,000 with a net of £125,000, rising to £1.2m revenues the following year and £260,000 net profit.

Peter Jones was sceptical of this jump in revenues and asked if “pigs can fly” but Reynolds was insistent that his financial projections were realistic, modest even: “I would be disappointed if that’s all we hit if I’m being honest with you”, he argued.

Jones: “You are currently turning over […] diddly squat and you don’t have the run rate to support £800,000 of forecast sales”. Reynolds claimed his turnover figures would be bolstered by pending contracts that would fuel growth, producing documentation as proof but this wasn’t enough to convince Jones:

“You have no proven business model whatsoever. You’ve just got an agreement which you’ve agreed to trial. […] This doesn’t actually give you any validation for your business”.

A passionate Jones continued: “I don’t like it. I think that you’ve just demonstrated to me that you’re not going to go to £800,000. Anybody can do this. I’m not even going to waste my breath or my time. I’m out”.

Nick Jenkins offered out some advice to the fitness founder and noted that Reynolds could have a healthy cash flow if he hired vans, scrapped the Manchester office and paid staff on a daily basis. Deliver on these, Jenkins encouraged “and you could get your £750,000 worth of turnover and you won’t need to raise any money. For that reason I’m out”.

Proof of concept was as much a sticking point for Willingham as it was Jones as she felt Reynolds needed more time to prove his business idea, while the market opportunity was too small for Touker Suleyman.

Deborah Meaden was the last Dragon to air her concerns, simultaneously putting an end to Reynolds’ hopes of securing investment: “Expansion for you outside of Scotland is the wrong thing to do. […] I’m out”.

Start-up business lesson: Reynolds’ sales projections relied heavily on pending contracts without any real proof of current success or evidence to validate the figures. A proven business model with realistic projections would have been a more enticing proposition for the Dragons. While Micro Fitness wasn’t successful in the Den, you could still find success by starting a fitness business – Alternative fitness was one of our top business ideas for 2017.  

Matthew Statham

Company: Autoblaze
Concept: Wood-burning stove ignition system
Investment sought: £150,000 for 15% equity
Investment received: None

Next into the Den was engineer-turned-entrepreneur Matthew Statham with his wood-burning stove ignition system; Autoblaze.

Founded in response to the growing popularity of wood burning stoves in modern homes, Autoblaze’s fan-based ignition system is able to “fully establish” a fire in just five minutes using super heated hot air.

“It’s quick and convenient to use, cheap to run and it’s eco-friendly”, Statham claimed before opening the floor up to questions.

From the off, Meaden admitted to being confused by how the product worked while its £500 retail price left Jones “struggling to get excited about it”.

In a bid to make his business more attractive to the angel investors, Statham said European legislation was coming in requiring stoves to be more efficient – creating a window of opportunity for Autoblaze. However, Jones felt this news actually made the product “more boring”.

Jenkins, a fan of wood burning stoves, was more enthusiastic; buoyed up by product’s promise to help reduce the amount of smoke but Willingham thought it was a tough sell:

“The stove seller is not going to say to me ‘if you buy that stove loads of smoke will go into the room – but I’ve got a £500 thing that you can put onto the back’. That conversation is never going to happen”.

Eyebrows were then raised as Suleyman found out that Statham had only sold 200 units to date to one stove manufacturer, but with no forward orders. This was certainly at odds with Statham’s £1m company valuation.

Meaden looked to delve a little bit deeper into the finances and enquired about the costs of production. Statham said he wasn’t able to reveal that information in a “public forum”, asserting that it was a “healthy profit margin”. but this wasn’t enough to reassure the Dragon.

Eventually Statham revealed that each system cost £120 to produce and was sold to the manufacturer at £250 – a margin which a pun-happy Jenkins dubbed a “slow burner”: “I don’t see a huge benefit in lighting fires because the pyromaniac in me says you’re sucking the fun out of it. You’re going to have to get the cost of production down significantly – I’m out”.

Suleyman followed Jenkins on the grounds that stove manufacturers could solve the problem more efficiently, while an uneager Jones said he would “rather eat salad for a year” than invest. Willingham didn’t have much more enthusiasm for the product and also exited the deal.

Ending Statham’s time in the den, Meaden declared that she felt he was “in a great position” as the “only person with the solution” but said he should make it a retrofit product, and so declined to invest.

Start-up business lesson: Given Jones’ clear lack of enthusiasm, Autoblaze may have been more appealing with a more exciting pitch. Learn how to nail funding pitch first time here.

Faluh Shah

Company: Howdah Snacks
Concept: Indian snacks
Investment sought: £100,000 for 17.5% equity
Investment received: None

Next to face the Dragons was Cheshire-based entrepreneur Faluh Shah.

Born and raised in India, Shah explained that she had moved to the UK in 1988 but had always missed the snacks of her home country and so went about creating Howdah Snacks, a range of traditional Indians snack free from artificial colours and flavours.

Over the last two years, the company had secured listings in over 150 fine food and farm shops and was in discussions with an airline company to stock one million packets per month. Shah revealed that was also in the final stage of negotiations with a European supermarket to distribute to 600 stores – estimated to be worth £2m.

Jenkins wanted to know more about this deal: “The question is how confident can you be about this business coming up? Lots of things can go wrong with supplying.” He asked to see the letter of intent from the European distributor, which Shah was able to produce but Jenkins said the letter of intent amounted to “nothing”:

“It doesn’t say they’re going to buy anything. It’s a five year agreement, It has no minimums in it”. Despite her insistence that the agreement would result in a lucrative deal, Jenkins became the first Dragon to take himself out of investing.

Outside of the European deal, Willingham’s concern was that the world food aisle Shah was aiming for was too niche: “Not every supermarket has that aisle. If you are trying to get your Indian snacks into that part of the supermarket, that’s a really small sector of the market”.

Competition was the main obstacle for Suleyman, who voiced worries that Shah would face considerable competition from rival Indian snack companies: “The moment you get this into supermarkets and it works, they’ll be going to India directly and having own label because you haven’t got a very unique product”.

Next to share their views on Howdah Snack was Jones who, believing the company was in need of something “really special”, declined to invest.

So how did Shah fare with the remaining Dragons?

  • Suleyman thought Howdah Snacks was too niche to invest
  • Willingham didn’t think the business would offer enough of a return
  • While Meaden, who did think there was a place for a recognised brand in the supermarket, didn’t think it was the right time for it.

Start-up business lesson: While her product tasted good, Shah could have done with stronger branding and a more exciting brand story if she wanted to stand out from her rivals on the supermarket shelves. Here are 5 branding considerations all start-ups should consider.

John Kershaw

Company: M14 Industries
Concept: Niche dating apps
Investment sought: £80,000 for 15% equity
Investment received: £80,000 for 20%

The Den’s best pitch yet? With five offers on the table, this week’s final contender was Manchester-based John Kershaw. He was pitching his business M14 Industries – a company that creates simple, niche dating apps, which combine the specificity of a service like Match.com with the simplicity of swiping apps like Tinder.

The company’s first product was Bristlr – a dating app “connecting those who have beards with those who want to stroke them”. Since launch, the app had secured 150,000 users, with 500,000 matches between them.

Kershaw said he wanted the funding tp enable M14 to open up its technology to create a white label product; allowing anyone to to create a niche dating app.

Meaden loved the pitch and asked about company revenues to which Kershaw replied that Bristlr was only generating £1,000 turnover a month but asserted that M14 had one of the largest radio networks in the UK on board and had signed with one of the largest publishers in the world. While Kershaw was reluctant to reveal the name of the publisher, Jones got him to admit it was Global based on an educated guess.

Meaden and Jones’ enthusiasm wasn’t initially shared by Suleyman who had some concerns: “The fact that you’re focusing on dating apps, surely when most of them go out of business and the top 20 or 50 apps are there, you’re going to run out of business”.

Kershaw: “We see it as progressing from dating to social apps – for example we have a client called Bump for single mums and new mums to find each other”.

Kershaw estimated that the company could reach 10,000 individual partners in the next few years, turning over a whopping £100m. Jones said the bigger apps would leave M14 as they grew but Kershaw had a different view: “There’s no real need to leave M14, because for them to run their own technology, have their own developers, and do their own customer support, would cost more than we are effectively billing them because we have the economies of scale”.

Suleyman seemed to be put at ease by Kershaw’s responses: “You’re very credible […] I’m willing to put up half the money for 12.5% if any other Dragons wants to join me in this journey”. Jenkins followed, offering £80,000 for 20% of the equity.

Willingham was next, offering all the money for 20% or at the option of sharing with any of the Dragons on their terms.

Jones wondered if the deal would represent a conflict of interest with his e-commmerce operation Brandpath but said that, “regardless of conflict of interest, I’d like to invest in you – you are probably one of the most appealing individuals to invest in that I’ve seen in the Den for a long time”. Jones offered all the money for 20% and said he would by happy to share this deal with Jenkins;  who agreed.

Meaden matched this offer – all of the money for 20% – and said she’d also be happy to share. The first full house of offers in the Den for a long time, Suleyman was motivated to change tact and offered all the money for 15%.

After pacing round the studio a few times, agonising over which investor(s) to go for, Kershaw finally settled on the offer of Jenkins and Jones and left the Den £80,000 better off. ‘Appy days!

Start-up business lesson: Unlike some of the Den’s other investment hopefuls this week, Kershaw was able to support his claims of revenue potential with evidence and a clear display of industry knowledge and business strategy. Find out how to start an online dating business like M14 in five simple steps here.

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