Over 50% of ‘successful’ Dragons’ Den deals don’t complete
Just £5.8m of £13m pledged by Dragons was actually invested following filming, analysis of Series' 1 to 11 has found
More than half of the deals agreed on Dragons' Den do not go through, analysis by smartphone comparison site TigerMobiles.com has revealed.
Since the business investment show was first broadcast in 2005 until the end of Series 11 (Dragons' Den Series 12 is now showing), 143 deals at a value of £13m have been verbally agreed in the Den, yet just 76 have gone through post-show with £5.8m invested.
While not an unusual occurrence for business angel investment, as either party can back away during the period of due diligence and detailed legal terms being discussed, the research highlights that a great deal goes on behind the scenes when the cameras stop rolling.
The in-depth analysis looked to answer whether the companies were still active, whether a Dragon had ever been on board as a director or shareholder and, if the companies were still active, if a Dragon was still on board.
It takes the form of an interactive table which can be filtered by Dragon and series and shows the investment offered, for what equity, whether the investment went through, if the business is still in business, a brief description of its post-Den activity and includes a link to a video of the original pitch and its Duedil page.
The company used sources such as Wikipedia, the BBC Dragons’ Den homepage, Duedil and Companies House to compile its data. It plans to add Series 12 to the dataset as soon as enough time has elapsed for due diligence to happen and the investment to be concluded.
Highlights of the analysis so far were:
- 76 out of the total 143 agreed investments were never completed after the show
- 23 of the 143 businesses that successfully pitched are no longer trading
- Of the £13m pledged by the Dragons, only £5.8m has ever been invested.
- £250,000 is the highest amount ever successfully pitched for in the Den
- However, neither of the companies that were offered £250,000 received the investment after the show
- £100,000 is the most frequent investment figure asked for, with 30 out of 143 pitchers seeking this amount
- £35,000 is the smallest amount ever offered for a successful pitch, for the youdoodoll. Deborah Meaden did invest but the company has now ceased trading.
- Peter Jones is the most prolific investor, offering investment to 54 of the 143 businesses which successfully pitched.
- The largest amount of equity ever given away in the den was 79% by RKA Records, which has since renamed to Bannatyne Music Ltd.
- The most frequent amount of equity given away in successful pitches is 40%, with 42 of 143 pitches giving up that share in their company.
Although the initial investment didn’t go through for some, companies such as taxi app Minicabit and food takeaway platform Hungry House went on to find success and are still trading.
An initial £100,000 investment from Duncan Bannatyne into Hungry House fell through but it managed to raise £150,000 from private investors, and has recently merged with Berlin-based global food ordering business Delivery Hero. Startups-featured Minicabit found investment via Wayra and is still trading.
Elsewhere, Caribbean food company Levi Roots – probably the biggest success story of the programme – and interactive teddy bear company iTeddy are still trading.
Jones retains a share in Levi Roots and founder Keith Graham has an estimated net worth of £35m. Both Jones and Theo Paphitis retain their combined 40% share in iTeddy.
Despite being rejected on the programme, several companies have used the exposure to become successful businesses such as Mask-arade and Trunki. Celebrity and personalised mask company Mask-arade was shortlisted for Santander Small to Medium Sized Business of The Year award at the 2014 National Business Awards 2014.
Although Trunki posted a £1.4m loss in 2013 thanks to cheaper Chinese imitations, the company had a profit of £720,373 in 2012 – and after receiving a £3.92m investment from the BGF in 2013 is confident about its future.
Other companies such as Series 1’s Umbrolly and Series 9’s EcoHab Homes and O-Pod Buildings never saw any investment and have since ceased trading.
Currently not present on the list is is fine food box delivery service Flavourly – founder Ryan O'Rorke spurned four offers of investment after raising £153,000 in growth capital between applying for the show and the filming.