Dragons’ Den: Series 14, Episode 5

A brand capitalising on the burgeoning coconut market had all the Dragons fighting to invest, while singing and inventions failed to impress

One pitch had the Dragons practising their singing, whilst two different inventions failed to offer an attractive enough return in the Den this week to entice investment.

Only one business impressed, attracting offers from all the Dragons. Restaurant entrepreneur Sarah Willingham and Moonpig founder Nick Jenkins saw eye-to-eye on the coconut brand and agreed to split the investment.

From doing your market research to offering the most attractive deal, we reveal what you can learn from this week’s pitches…

Tom Bell and Craig Bailey

Company: FoamAroma UK
Concept: A redesigned takeaway coffee lid
Investment sought: £80,000 for 15% equity
Investment received: None

First into the Den this week were a Transatlantic pair with an invention they claimed had the potential to revolutionise the UK’s £7.9bn takeaway hot drink market.

Tom Bell and Craig Bailey’s FoamAroma UK lid aims to give coffee consumers the sensory experience that they’re deprived of by the “badly designed” 2.5 billion lids used in the UK last year. Its enlarged holes allow for easier drinking and more aroma to reach the nose.

Restaurant entrepreneur Sarah Willingham piped up first: “I have an issue with the product […] fundamentally this is about smelling coffee as you drink it but the majority of coffees that are sold in the UK are sold with milk. And actually when you add milk to a coffee the aroma disappears […] the reality is it doesn’t actually improve my coffee drinking experience, and I’m a big coffee drinker”.


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Bailey asked if the “tension in her jaw was any different” when she was drinking it to which she replied it was no different to any other lid she’d drunk from.

Despite also admitting that the product wasn’t “doing it” for him, Peter Jones said their sales figures were “not bad” – 2.4 million in the last 12 months equating to £55,000 in revenue – but was keen to establish how the transatlantic business worked: “This is getting complicated. Who owns this company?”

Bell and Bailey owned FoamAroma UK with a 70/30 split, but Bailey owned FoamAroma worldwide – the Dragons’ investment would just be into the UK arm. “Why are we not being offered a piece of the whole?” asked Jones. Bailey revealed he wasn’t prepared to do that.

After discovering they had a patent, Deborah Meaden said: “I’d be amazed if I couldn’t come up with something very similar. I’d be worried that the valuable bit […] is actually not that valuable”.

Nick Jenkins was first to exit the deal: “I don’t think this really makes much sense from an investment point of view […] I think you’d be better off doing this yourself, I don’t really see why you’re trying to raise money […] I’m out”.

“I couldn’t have put it better […] I’m out”, followed Meaden. But Touker Suleyman was willing to give them “a chance” to put the patent and US business in with the UK arm to create a more attractive offer.

There was some disagreement between the two entrepreneurs. Bell told Bailey: “You know my answer” – but when Bailey repeated that he was not prepared to meet Suleyman’s offer, Bell intervened: “That’s not the right answer […] the answer is yes you will and you will strike a deal if we want a deal”.

This was all the encouragement he needed to reconsider his stance, prompting Jones to say: “I think you’ve just made this a little bit more interesting”.

However, their revenues so far didn’t reflect a good enough return on investment for Willingham and Suleyman who both dropped out.

This just left Jones: “Even when you grow this business, I don’t think you’re going to produce a serious return. For that reason, I’m out.”

Start-up business lesson: Bailey and Bell entered the Den offering one deal when there was clearly a more attractive proposition. Bailey’s reluctance to meet the Dragons halfway when there was so much at stake ultimately lost them the investment.

Tina and Claire O’Brien

Company: Little Belters
Concept: Affordable singing tuition for children
Investment sought: £45,000 for 15% equity
Investment received: None

Next to face the Dragons were opera singing sisters Tina and Claire O’Brien, whose pitch opened with a performance by a children’s choir. Their company Little Belters offers “fun, quality, affordable” singing tuition for children aged five to 11.

Taking “the idea of a children’s choir” and turning it “on its head”, the specially designed programme teaches children “a great vocal technique” and helps them develop confidence led by professional freelance singing tutors. Launched in 2013, Little Belters has seven groups operating across Greater Manchester, with ambitions to grow to 100 groups.

It was a perfect pitch from the sisters but Jones wanted a demonstration of their technique – he asked them to teach the Dragons to sing.

The ice-breaking demonstration over, it was time to get down to business. Willingham wanted to understand the business model. The company identifies an area, employs a professional singer, trains them up, places them in a venue and recruits all the members. Each pays £35 to receive 39 weeks of training and three public performances. The duo revealed that a similar idea for adults had built up a network of 600 groups over 10 years. “Why on earth aren’t they doing it for kids?” asked Willingham.

After some worrying confusion over numbers, Jones established that every group brings in £6,000 a year generated from £3,500 worth of overheads. The Dragon didn’t seem overly impressed that their maximum net profit from their ultimate goal of 100 groups would be £200,000.

Jenkins drilled down further into the numbers and discovered the pair were expecting to run the business on £54,000 of overheads: “It’s not going to work…”, he concluded.

Meaden: “This type of business is very, very expensive and difficult to roll out because it’s all about replicating you and you’re going to spend your life having constantly 20% of the people working for you disappointing you”. She became the first Dragon to exit the deal.

Jenkins followed citing their lack of commercial drive: “One of us could provide that but we’d have to work full time on it […] I’m afraid I’m out”.

Jones: “You’ve got to start knowing a lot more about your business model and a lot more about your competition and how you’re going to make this business work if you’re going to be successful in business […] I’m out because you haven’t given me any reason to think about investment”.

“I love what you do and I think you’re very talented – but there’s a big gap between being very talented and a business”, said Suleyman. He declined to offer.

With four kids of her own, Willingham also loved their idea but knew how difficult it would be to expand nationally. She put an end to their hopes of securing investment in the Den.

Start-up business lesson: The sisters failed to show a shrewd commercial awareness and evidence that their business model would offer a decent return on investment for the Dragons – some ideas just aren’t big enough for the den.

David Audsley

Company: DAIO
Concept: Safety device for hair appliances
Investment sought: £75,000 for 20% equity.
Investment received: None

Hairdresser David Audsley was next into the Den, with an invention he thought could solve a longstanding problem in his sector: the Daily Appliance Intelligent Organiser (DAIO).

With 650,000 house fires in the UK caused by unattended hair care appliances, the DAIO’s two “childproof” heatproof silicon cups prevent such appliances coming into contact with flammable materials.

Audsley said that within three months of launch the product was featured on ITV’s This Morning in conjunction with Child Safety Week.

Jones was first to question the entrepreneur: “If you’ve been on This Morning, it’s going to sell as much as it’s going to sell isn’t it?”

“I think we sold about 70 within the first five or six minutes and then the website crashed”, countered Audsley. He divulged that year one sales were £26,000, netting -£25,000 and that between him and his marketing director they’d invested £171,000. “Wow David, you’re in a tough situation”, said Jones at this revelation.

Meaden dug deeper into the company’s finances – although the amount and terms of his borrowing were troubling she saw something in the idea. But with £100,000 of retail stock left, she was worried his strategy wasn’t up to scratch: “I know if I put money into the business we could get into further debt, because that’s the place you come from”.

However, Jenkins concerns lay elsewhere: “It’s a really solidly, well-made product. I’m just a little concerned that it might be over-engineered”. At this point, Meaden lost confidence in the deal when Audsley announced they were already spending money developing a new product and declined to invest.

Willingham raised another point: a much simpler, sleeve product that performed the same function wasn’t selling. She advised him to sell the stock he already had, not to spend any more money on development and exited the deal. Suleyman agreed with Willingham and also withdrew.

Jenkins: “The thing that staggers me is that people are allowed to sell heating tongs without some device to stop it burning the surface that it’s sitting on […] I hope the solution lies with legislation and the appliance manufacturers rather than with a retrospective solution. So for that reason, I’m out”.

Jones thought it was a good product but ultimately couldn’t invest: “You’ve not got a business, you’ve got a product”.

Start-up business lesson: Despite having a solidly made product, Audsley’s readiness to get into debt to fuel his business growth before knowing it would work deeply concerned the Dragons. While you need to take risks in business, they need to be informed risks.

Jacob Thundil

Company: Cocofina
Concept: Coconut-based products
Investment sought: £75,000 for 5% equity
Investment received: £75,000 for 20% between Jenkins and Willingham

The final entrepreneur to face the Dragons was coconut nut Jacob Thundil. His company Cocofina produces coconut-based products to eat drink and cook with.

The US market for coconut oil and water alone is worth £750m and in the UK £50m and doubling annually he explained. Cocofina’s turnover over the last three years had hit £1m, £600,000 and £300,000 resulting in net profit of £70,000, £50,000 and £12,000.

Meaden asked about his routes to market and discovered that the product was being sold in Harrods, Clinique, 700 Holland & Barret stores for the coconut water alone and was already being exported to 25 countries outside of the UK – equating to 45% of total turnover. His ambition: to sell in Boots, Marks & Spencer and Waitrose.

Jones asked why he sold so many different products. “I want to make sure I show innovation to the customer. I want to establish myself as a coconut expert”, he replied.

Suleyman asked him to describe his organisation, with the entrepreneur revealing he had a business partner who owned 50% of the business. It transpired she was in the building, and although camera-shy, she agreed to meet the Dragons.

Willingham: “What’s great about coconut at the moment is that it is going mass market but when we asked you the direction you wanted to take the business in your answer was pharmacy and that really flummoxed me.”

Thundil explained that he was trying to “not upset” his existing customer base and build from there. The restaurant magnate said that was very interesting: “I know Tesco very well and this is exactly what they’re looking for. That would be the direction I would want to take the business in.”

Suleyman revealed he had good connections in Marks & Spencer, offering another potential retail plan for the entrepreneurs. However, Meaden was first to make an offer: all the money, but for 20% of the business – citing her contacts and some work needed on the development front as her reasons for extra equity.

Jenkins and Willingham both also matched the offer. Suleyman “added a bit of spice” to his offer: £100,000 for 25%, pledging to return the 5% when he made his money back.

Jones, who made a huge success of Reggae Reggae Sauce, said their biggest problem was their brand: “Have you got any product that you can see that could go mainstream without desecrating your brand?”.

Thundil pointed out the coconut milk and snack bars. This was enough for Jones to make an offer: all of the money for 20%, with the option of splitting it with another Dragon.

After some discussion between the Dragons, Jenkins and Willingham offered to split the deal. “I don’t think we need to discuss further”, said Thundil, accepting the deal.

Start-up business lesson: Thundil was able to show that his product was saleable and scalable, whilst demonstrating business acumen and a clear ambition.

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