"Tonight, on Dragons' Den..." "You've come in with the most ludicrous, ridiculous valuation." "It's never going to happen." " That's a genius idea." "You're hired." " Genius idea!" " You are hired." " That IS a genius idea!" " That's for free." "That's Touker time." "I don't think your branding's strong at all." "You've had a lot of good things said to you but I'm going to tell you what I think." "I hate it." "Not terribly exciting, is it?" "I think you've done great." "I'm going to make you an offer." "Welcome to Dragons' Den, the place where entrepreneurs get just one chance to impress five industry big-hitters who have the money and the power to change their lives." "Our first entrepreneur has spent the last couple of years leading a double life." "Teacher by day, start-up businessman after 3.30." "I'm passionate about the business and I'm also passionate about teaching as well." "Obviously, the Dragons are a little bit better behaved than schoolchildren - just a little bit though." "Though I may have to ask them to straighten up their ties and sit up straight." "And there's one particular Dragon Kevin thinks is first-class." "The Dragon that I'd really love to work with is Touker Suleyman." "He's got a background in the menswear business and I think he would understand our audience and what we're trying to achieve." "But can he convince the investors his business is worthy of their cash?" "Hello, Dragons." "My name is Kevin Moore and I am the director of Comb and Blade." "We are an online men's grooming retailer and we specialise in the sale of traditional grooming products, including hair pomades, wet shaving products and beard and moustache care products." "I came up with the idea for the business, as I found it difficult to get hold of products that I liked from the USA and I'd often have to pay large shipping charges and taxes, which would make the product very, very expensive." "I'm here today to ask for an investment of £45,000 in return for a 15% equity stake." "Our total turnover for the last two years was just over £50,000 from around 4,000 sales and this was with a starting budget of just £1,500." "I believe the business has tremendous potential in both retail and wholesale markets." "The reason we're seeking extra investment is to allow us to target that wholesale market and bring in more stock." "Thank you for your time, Dragons." " I'd be happy to answer any questions." " OK." "Mail order preening products is the business on offer from moonlighting teacher Kevin Moore." "Look at these." "Seem lovely." "The dapper entrepreneur needs £45,000 to take his business wholesale." "In return, he'll give away 15%." "Kevin, can I compliment you on the way that you dress?" "Thank you very much." "I like your socks, Peter." "They're excellent too." " LAUGHTER AND GROANS" " Oh, don't!" "Come on!" " First impressions count." " Yeah, absolutely." "Thank you." "With the flattery out of the way, fashion giant Touker Suleyman wants to set the trend with the questions." "Describe what each one of these products do." "Cos they're very..." " They're not familiar." " Yeah." " They're all American?" "Many of them are American." "There are some Australian brands that we stock." "Give us an idea of three or four of the products." "The majority of what we sell are water-based pomades." "A pomade, traditionally, was what people might have used in the '50s to get the slicked back look." "As you can see, they come in lots of weird and wonderful brands and there's sort of quite a culture around them as well," " in terms of the customers that buy them." " And you want the investment..." " Yeah." " ..so that you can wholesale this." " Absolutely, yeah." "And you say the business at the moment is only online?" "It's just online, yes." " And you've turned over £45,000 over three years?" " £50,000 over two years." "£50,000, sorry." "Break it down over the two years." " Year one, the turnover was £30,000." " Yeah." " Gross profit from that was just over £5,000." " Yeah." "And the net was slightly under, so minus £100." "The second year, the turnover was less, at 20K, but the profit was better at £7,000, with a net profit of around £1,500." "Well, it's very apparent that it's a small business." "Of course, I wouldn't deny that." "But surely, with a turnover of £20,000..." " I'm assuming you do something else at the same time." " Yes, I do." "So, my background is in education." "I've been a teacher for the last seven years and I've combined full-time teaching with establishing the business." " What do you teach, Kevin?" " That was MY question." "No!" " Oh, sorry!" "Go on, what do you teach and how old?" "I teach IT and computing and it's secondary school." "So, there's quite a lot of credibility" " tied up in this whole pitch, isn't there?" " Absolutely." "If my students are watching, yeah, they won't let me off lightly if I make any big mistakes." " Exactly." " So, yeah..." "But Kevin... ..with all due respect..." "..you can't expect me to invest in the business where you dip your toes in as and when you've got an hour here in your lunch break or the evening." "I mean, it's really not a business." "OK, I don't see it like that." "I invested £8,000 of my own money which I borrowed from my wedding fund, so I'm not sure that my wife's too happy about that." "So, I've made a commitment myself." "Teaching's a tough job but I do work hard to make the business work." " Nobody's doubting you don't work hard." " Yeah." "All I'm trying to say, you want to enter an arena of wholesale but it needs full-time people to run a business." "A reality check for the entrepreneur, as his preferred Dragon doubts his ability to head up a company and hold down a day job." "Now internet mogul Nick Jenkins wants to learn about Kevin's plans to upscale his business from website to warehouse." "You're a classic example of how it's perfectly possible, using the internet, and a wonderful example to your pupils, of how it's possible to set up a website, access a load of fanatics of a particular thing" "and, using paid-for search and different forms of online marketing," " you can develop a business." " Yeah." "While still holding down a full-time job, which is pretty amazing." "The moment you go into wholesale," " that's the point you pretty much have to give up the day job." " Yeah." "And the question you have to ask yourself is are you really sure you want to give up your day job?" "I hope you understand that, to be fair to my employer and to my students," "I'm not sure I could sort of commit and say yes right now." "I think, realistically, if the business was making a significant amount of money and I felt that it could grow, that is a decision I would have to make and I would have to think about very carefully." "I actually think the scale of the opportunity is always going to be determined by the effort and focus of the individual that's founded the company, and that's you." "But I don't think you can do both." "Concerns that Kevin's teaching career may conflict with the running of his business, overshadow proceedings again." "And Deborah Meaden's been doing the maths on Kevin's sales." "I can't ignore the fact that, actually, we're going south here." " There's no demonstration of profit." "In fact, it's gone down." " Yeah." "With regards to the figures, I know the turnover did go down, as a result of us focussing more on the website, but the gross profit and the net profit went up" " in the second year." " Yeah, not really." " I know it's a small margins." "We're a small business and I think we've got a good concept." "Um, I think, in this industry, people buy into stories and people and I think there is a big audience out there for what we sell." "It's just bringing us in touch with them." "There is a big audience." " You are bang-on what's going on, aren't you?" " Yeah." "Everyone's looking very smart, they're very well-groomed." "And at some point in the future, everybody's going to change that." "They're going to do exactly the opposite, cos that's what we do as human beings." "So, how are you going to protect yourself into the future if the market, WHEN the market swings against you?" "I think the key thing is, with the name, Comb and Blade, we are still selling traditional shaving products." "At the moment, beards and moustaches are very much in fashion." "You would hope, if that fashion fades, that people are then turning to shaving." "So, I would hope that we have enough of a product offering that we can adapt and move, without losing our core brand, that we can still attract new customers." "Top marks for Kevin, as he demonstrates a business that can move with the times." "But for Nick Jenkins, there are question marks over whether the brand's ethos will survive as the business scales." "You say it's a great story that people want to buy into." "The moment you go into wholesale, the person at the other end of that chain doesn't know who you are." " Yeah." " They're not connected with you at all, so that story gets lost." " At which point, you are just part of a supply chain." " Yeah." "That's pretty dull." "So, from that point of view," "I would love to see you use this as a case study for years to come and inspiring people." "So, for that reason, I wish you all the best of luck, but I'm out." "Nick Jenkins' concerns over the entrepreneur's expansion plans lead to his exit from the deal." "And now that troublesome subject of Kevin's teaching career is back on the agenda." "I honestly think that you coming in here and getting investment is such a conflict and I think that's on both sides, actually." "I think the conflict for me, if I was to invest in you, would be, but he loves his job." "And I'm not going to be that person to say," ""Leave your job because, actually, I've invested in this business" ""and I need you completely focussed on it," ""cos you are the ambassador, you are the person who's going to drive it."" "And at the same time, in no circumstances is somebody going to invest in you on a part-time basis." "It's just not going to happen." " I'm not going to invest, so I'm out." " OK, thank you." "You're a teacher, you present well but, actually, I can't tell you how many of these barber shops are springing up all over the place and in a minute, the market's going to move against them." "So, for no other reason, because you have presented very well..." " Thank you." " And as an ambassador for your brand, spot-on, absolutely." "I won't be investing, Kevin." "I'm out." "Appreciate your advice." "Thank you." "I don't know what more could be said." "I think that the last thing you want is my money and me or one of my team calling you at half past two, saying, "We're hearing orders didn't go out yesterday." " "What on Earth is going on?"" " Yeah." " And you're sitting there..." " In assembly." " ..talking in a separate environment with your kids and doing what you have chosen to do as your career." "That's my issue." "But you've demonstrated that people can set up a business in their spare time and have quite a cool business too." "So, I wish you the best of luck, but I can't invest for those reasons, and I'm out." "With Peter Jones declining a deal, fashion powerhouse Touker Suleyman is the last Dragon standing." "Will he decide that Kevin's grooming products are a good addition to his own designer menswear portfolio?" "Kevin, um, you've had a lot of good things said to you." " Yes." " Yes?" " Yeah." " Well, I'm going to tell you what I think." " OK." "I hate it." "OK." "And the reason why I hate it - we have some amazing English brands." " Mm-hmm." " There's Trumper's in Jermyn Street." "The Americans, the French, they queue up outside" " to buy English products." " Yeah." "And I do know their exports are phenomenal and I'm surprised that you're trying to bring products, which doesn't look authentic, it just looks like shoe polish." "And, to me, to me, it just looks eurgh." "I use hair products from Jermyn Street." "The fact is, when I go into that store," "I get that English feeling of, there's your paste, there's your blade." "Everything's all there." "Yeah, but your blade's probably made in Germany." "It probably is but the fact is they've it together in such a way..." " Yeah." " You have a great looking website, don't get me wrong." "But the product, no way." "So... ..I'm not going to invest in you and I'm out." " OK, thank you for your constructive criticism." " OK." "And that's the final bell for Kevin's pitch, as Touker Suleyman proves to be the maverick Dragon, bucking the trend with a scathing analysis of his product line." " I think it's cool." " PETER:" " It's beautiful." " It's lovely." " It smells so good." " DEBORAH:" " Smells like my granddad." "It's four to one, guys." "I don't like it." "I'm always saying to my students, "If you work hard at something," ""you can achieve something."" "I still feel that you can run a successful business and combine it with a full-time job." "Other people have proved that." "I was honest with them and I think they were very fair with me, and I take away their advice, if not their money." "Our next entrepreneur has already tasted the boom and bust of business, after his last venture led to financial failure." "I was pressing the reset button, riding it out and, in the meantime, trying to learn from all those mistakes that I'd made in the past." "I would rather not have gone through that in my life, but it's taught me a lot, as far as my business journey is concerned." "Now he's back with a new product, which he thinks has the recipe for success in the den." "The worst thing that could happen would be for the Dragons to buck the trend and dislike the taste of the product, followed by disliking the business in general, followed by disliking me." "I don't think that's going to happen, but they might just not like it and that would be bad." "Hello, Dragons." "My name's David Hastie and today I'm pitching for £75,000 investment for a 10% equity stake in my company, Nutrifiz Ltd." "Nutrifiz is the world's first effervescent wheatgrass tablet." "Wheatgrass is a highly nutritious plant, packed with vitamins, minerals and plant-based nutrients." "It forms part of a booming supplement market worldwide, worth over 15.5 billion." "Just add water and Nutrifiz delivers organic wheatgrass in a delicious and refreshing drink for energy, immune support, sports recovery and general wellness, without the grit, the mess or the horrible bitter taste of other wheatgrass products on the market." "We started trading just over a year ago and have sold over 12,000 units and listed in over 500 retailers nationwide, including Holland  Barrett and Asda, with Nutrifiz For Kids." "The team consists of myself, with a background in health and a degree in finance, and investors with decades of experience in bringing innovative products to global markets." "Last year, we turned over £46,000 with a gross profit of £17,500 and, although we made a net loss, we have plenty of stock with a long shelf life, and I've also spent the last three months" "purely focussing on laying the groundwork and solid foundations for global growth." "This year, our projected turnover is £367,000, with a gross profit of £150,000, and net of £15,000." "Thank you so much for your time and I now welcome any questions." "But before I do that, would anyone like to try some Nutrifiz?" " DRAGONS:" " Yes, please." "A wholesome pitch from effervescent entrepreneur David Hastie." "He wants to supplement his company's assets with a £75,000 investment." " Does it need stirring, that on top, or...?" " No." "That's quite normal, that's what it does?" "That's from the saponins in the wheatgrass." " From the saponins?" " Saponins." "In return, he'll give away a 10% equity stake." "TOUKER COUGHS" "It doesn't look like the healthy drink is to Touker Suleyman's palate." "Will David's business go down any better?" " David." " Mm." " Good pitch." " Thank you." " You came across very well." "It's a very competitive market, so just tell me about your competition." "My competition exists both on the effervescent multivitamin tablets" " on one side, and then wheatgrass on the other." " Right." "This product is effectively bridging the two." "You have wheatgrass powders, which are the most popular form, followed by wheatgrass shots that you might find at a juice bar." "They can be very messy, they have the bitter taste, they have the grit on the teeth." "One of the big things when we were creating the product was taste." "We did loads of consumer surveys and feedback with over 2,000 people." "We reformulated so many times to make sure that that taste was what the majority wanted." " How is it sweetened?" " Sucralose." " And what is sucralose?" "It's an artificial sweetener derived from the natural sugar sucrose." "I knew it was artificial sweetener because I could taste it." "I've still got it, I can still taste it in my mouth and that, for me..." "I was quite excited when you first started but I'm sitting here, literally going, "I don't like that aftertaste", cos it feels artificial." "I must be honest." "I had exactly the same reaction as Deborah's just had." "I'm standing here wondering if there was something..." "A detergent we used in the glass, because I don't get that reaction." " Well, I don't get that reaction from detergents either." " OK." " I just get that reaction from artificial sweeteners." " OK." "And the problem is, that would deter me from drinking it but it would definitely deter me from giving it to my children." "The reason I made Nutrifiz For Kids was because I won a chance to pitch in front of Andy Clarke, the CEO of Asda." "He came to me and he looked at the adult version and he said," ""I really like it, but can you do me one for kids?"" "You don't say no to the CEO of Asda, so I developed Nutrifiz For Kids at their request," " hence they're now stocking it." " So, this is what they put in Asda?" " You'll find that in every Asda store." " And how is it selling?" "We're averaging two or three per week per store." "And are they keeping it in the store?" "We got confirmation two weeks ago that they are going to retain the listing." "Why, if it's not really selling?" "To be fair, Sarah, most supermarkets will keep a range at three a store a week." "Well, I don't know about multivits, but certainly in food." "And also, there are plenty of other companies trying to get that shelf space, so if it's not selling, they wouldn't retain the listing." "David defends his supermarket sales with a little help from Deborah Meaden." "But news of the entrepreneur's modest retail success has made Nick Jenkins step into the shoes of his competition." "What's to stop anyone else just sprinkling a bit of wheatgrass" " into their fizzy tablet?" " OK." "Is there anything to stop them doing that?" "Um, no, there isn't... is the simple answer." "Cos it's a food recipe, it's not something we can get a patent on, so it really is about building the brand." "One thing we do have is the ownership of the formula and also good relationships with the manufacturers, who will not, obviously, produce the same formula for someone else." "The problem is that, even if you establish that people actually genuinely want these fizzy things they're buying already but a bit of wheatgrass added into them, is that in a month or two's time, other people could simply do that." "You don't have enough of a brand at the moment to be able to defend your position so, I'm afraid for that reason, I can't invest and I'm out." "Nick Jenkins takes the fizz out of things with an early exit over concerns about copycats." "And now Touker Suleyman wants to know what's financially fuelling the business." "So, how much has gone into this venture so far?" " £115,000 so far." " How much of that is your money and how much of that is your investors' money?" " None of it is my money..." " None of it's your money?" "None of it's my money because I started off..." "I was bankrupt from my failed previous business." "What happened?" "I took voluntary bankruptcy because I went to university twice," "I built up a lot of student debt and then I started up another company as a cofounder and I think we all realised there were many things that we didn't know at the time and we just weren't watching what we were doing" "and I ended up having to leave because I couldn't afford to stay in, and went bankrupt as a result, cos I'd put all my money into that." "Um..." "I think you've taken an easy way out." " OK." " If you're willing to walk away from debt, that kind of doesn't sit well with my moral compass." "I've been and lost everything and I spent the next three years of my life paying back every single person from a prior business that I owed money to, including the bank." "I don't like the fact that you walked away from it." "I understand your fear there." "Um..." "Two things that I can say to that." "One is, it got to a point where the stress that it was causing me was affecting my health and it got to a point where it was just consuming me." "And, yes, I understand the moral issue..." "I believe everybody deserves in life a second chance, so I get that." "But if I was to give you £75,000 today, how would I know you're not going to treat my money in the same light?" "Knowing what I know now, I think I would be in a position to find ways to be able repay it, so I wouldn't have the moral dilemma of..." "I couldn't walk away from that." "I just couldn't." "David's insolvency revelation has certainly proved a hot spot for Peter Jones." "But has his assurance it's a one-off convinced Touker Suleyman he's partnership material?" "Let me ask you one simple question." "You've got other shareholders." "Why haven't they offered to invest?" "The other shareholders simply don't have the money right now because they're working on other projects, so they simply don't have the spare capital." "And they don't have the visibility that the likes of yourselves might have, in terms of being able to pick up that phone." "But at the end of the day, they've got more knowledge in the background of what's going on than we've got." "If the business was so good, as you say, they would have found the money to invest." "For that reason, I'm out." "Touker Suleyman becomes the second Dragon to turn down the chance to invest." "Is the glass any fuller for Sarah Willingham?" "I must admit, I did get excited when you came in and after hearing your pitch, I thought," ""Ooh, this..." "I love this space."" "But it is so competitive." "The scariest thing, for me, is that you are actually in lots of these places but your sales are still so low." "I know what Deborah's saying, two or three a week, but the problem is, how does two or three a week grow without significant marketing spend?" "And that's the problem." "I wish you all the best." " Good luck, but I'm afraid I'm out." " OK, thank you." "My biggest issue is that it presents itself as a healthy product when it has got the artificial sweetener." "We're told things are good for us, then they're bad for us, then they're good for us, then they're bad for us." "The best way to deal with it is to not have artificial sweeteners." "So, it's not pure enough for me and I won't be investing." "I'm sorry, David, but I'm out." "A failure to convince Deborah Meaden to acquire a taste for his product has left David almost out of investors." "But has Peter Jones seen anything in the second-time-around entrepreneur that's worthy of his cash?" "I think it was really good of you to outline the story because a lot of people try and shy away from bankruptcy and I don't think anybody should." "I do admire the fact that you've got yourself back on your feet and you're starting to do well and you've got a business." "I have a feeling, though, that you're going to need quite a bit of money to get this business really working for you and off the ground and I think you're completely undercapitalised." "I don't think £75,000 is going to be sufficient." "I think you're going to need more than just supplements and nutrients for this business to succeed, in my opinion." " So, for that reason, I'm out." " Thank you." "Well, it was a brave fight for investment but, in the end," "David just couldn't pull it off and he leaves the Den no richer than when he arrived." " Wow." " Tough market." "Really, really, really tough, cos the own brands win." "So, if you want to be a brand, you've got to spend so much money." "Yes, I'm a bit disappointed by the way things went." "It's difficult, sometimes, to covey the passion that has built up over 18 months." "It's a shame that it went that way but, you know, nothing lost." " Right you got this?" " Yeah." "It can seem counterintuitive to launch a business that half of the population will never have a use for." "I'd like to say, "Just what I've always wanted,"" "but I'd hate anybody to think that's what they can get me for Christmas." "But Alec Mills and Celia Pool's mail order subscription service was born out of a very female frustration." "Shopping for your period sucks but running out of tampons sucks even more." "When I mentioned this to my friend Alec, he said, quite rightly," ""Why do women run this gauntlet every month?"" " So, we created Sanitary Owl." " A period subscription service, delivering tampons and pads to women around the UK." "Alec delivered an unusual reason why he needed a Dragon's seal of approval." "I really want you to invest in this because my mum realised that the only thing worse than her son being a tampon salesman is her son being a failed tampon salesman." "LAUGHTER" "Peter Jones couldn't help but ask about some of the duo's more alternative products." "I'm really worried about this next question." "You mentioned in your pitch about the fact that you also sell reusables." "What is a reusable?" " So, this is a cloth pad..." " Right." " ..which is reusable, so you just... and then put it in the washing machine." "And this is a Mooncup." "It's a little cup that catches all the blood and then you empty it out into a basin or a loo." "While Peter Jones was left speechless," "Touker Suleyman was full of ideas on how the entrepreneurs could cut their costs." "So, what if you went to the manufacturer and said," ""We'll take all your broken packets," ""all the ones where the boxes have crushed,"" "and you buy them at a discount." " Have you had that conversation with them?" " No, but that's a genius idea." " You're hired." " A genius idea!" " You are hired!" " That IS a genius idea!" " It really is." " That's for free." "That's Touker time." "Also free were Deborah Meaden's thoughts on whether a subscription service was absolutely necessary for these products." "You say, "Run the gauntlet." I can't ever remember running the gauntlet." "It is SO available." "It's available everywhere and, unless you're not going to eat for a fortnight, you've always got an opportunity, while you're in the supermarket, to pick something up." "And once she had deemed it an expendable luxury, it paved the way for the other Dragons to also throw in the towel." " I'm afraid I'm out." " OK, thank you." "I'm out." "The subscription model for a low-value product" " is what holds you back, and for that reason, I'm out." " OK." " You can keep your boxes." " LAUGHTER" "But there was no way the male Dragons would be taking them up on that offer of a souvenir any time soon." "I think you handled that very well, boys." " PETER:" " I found that pitch quite uncomfortable." " What on Earth is THAT?" " TOUKER LAUGHS" "Still to come on tonight's show..." " Oh!" " LAUGHTER" "Don't help him out, don't help him out!" "Valuation..." "You have a business that made £22,000 last year that you believe is worth 1.5 million today." "..valuation..." "You're looking at a valuation which is 1.6 million." "That's hardly worth the risk is it?" "..valuation." "I just happen to be in that little sector at the moment." "I've just got to get my head round the valuation." "Next to face the Dragons is Paul Jobin..." "..an entrepreneur with a sentimental streak." "I used to watch the programme when it first started, with my father." "We used to love it, sitting there, talking about which was the best business that we would invest in." "And I imagine my father sitting there watching it with pride on his face." "Hello, my name's Paul Jobin." "I'm founder and managing director of Snugs." "We're here to raise £80,000 for 5% of the company." "These, according to Jonathan Margolis, tech guru, are probably the best consumer earphones in the world." "Snugs are like little Savile Row suits for your ears." "They've been made just for you." "They're made of soft silicone." "They never fall out, no matter how active you are, because they're perfectly made to fit your ear, in the same way that a handmade suit or handmade shoes are a perfect fit." "The beauty being, is that this perfect fit allows the sound quality to be vastly improved." "Rock stars have been wearing custom-fitted ear monitors for years." "To get that perfect fit, we do a 3D scan of your ear and produce a 3D image of your inner ear, which we then upload to our industrial grade printer, who produces a custom-made product just for you." "We're here, looking to raise money from yourselves." "Part of that investment would be used to purchase more of these scanners to allow us to roll out, from our current base in London, nationwide." "Our award-winning earphones currently sell for £199." "If you've got your own earphones, then you can just buy the tips from us, and that's £139." "I'd like to invite you to come and join Snugs." "Thank you very much indeed." "Hoping to roll out his bespoke earphone range is Paul Jobin." "Obviously, this product won't fit you but it gives you an example of how the product is presented." "He thinks £80,000 should help his plans to expand nationwide and, in return, he's offering 5% of his company." "E-commerce mogul Nick Jenkins is first to get the measure of the product." "How long does the process take?" "The scanning process takes between 10 to 15 minutes, with these first-generation scanners." "So, you would go into a shop..." "Where would you go for this?" "We have scanners located in London retail outlets." "Currently we've only got two scanners and I'm looking to be able to put more scanners in London, so we can cover better areas." "At the moment, it's difficult to cover the City and Mayfair and the West End." "Sorry, can you just point, where's the scanner?" "That's the scanner." "This is a state-of-the-art 3D scanner." "This is first-generation..." "You actually put that in the ear?" " Put that in the ear, creates a full 3D image of the ear." " OK." "I can certainly see how people who want" " a high-end product would go for this." " Yep." "How much do they cost, those scanners?" "This is a first-generation..." "These are $10,000, these scanners." "News of the scanners' price tag has stopped Touker Suleyman in his tracks." "And Sarah Willingham wants to probe what effect that cost will have on Paul's profits." "You're going to need to sell... 300, 400 of these before you're even getting to the point" " where you will cover the cost of purchasing the scanner." " Yep." "That many people are not going to walk through that door and buy this product, therefore there is no roll-out model." "It has been expensive getting to this point and we actually get internet orders all over the world at the moment for our product." "How are you getting internet orders for the products?" "People come onto us and buy the product from us and we then get their impression done for them." "If they live in London, we send them to a scanner." "If they don't live in London, they live somewhere else, we send them to a local audiologist who makes a physical impression for us and that's how we move forward." "If I place an order with you online, and I get an email back, saying," ""Can you please go and visit your local ear doctor at some point", and it's going to take me ages to get an appointment," "I mean, it's never going to happen." "But, forgive me, you go and click and collect, you go into the shop to go and buy your shoes." "If it's something that you particularly want, then maybe you might make that commitment." "Paul's convinced his product has enough appeal to make the service cost effective." "And it's a business model Peter Jones thinks he's seen before." " It's a bit like the photo booth in the early days." " Yep." "The photo booth, when it was first put into..." " The Woolies photo booth..." " Yep." " It was like five years' payback, cos it was thousands of pounds." " Yep." "And sometimes, it was just left empty, and then it started to get adopted, adopted, and then, all of a sudden," " the cost of the photo booth reduced..." " Absolutely." "..and then we had a 99p passport photo," " cos that was what really made it happen." " Yep." "So, I think that you have come up with something that you will see in the open market." "So, I'm not going to criticise what you've done because..." "I like it a lot." "Tech tycoon Peter Jones predicts a bright future for Snugs." "But Nick Jenkins wants to know if Paul's got the figures to match." "So, tell me, numberswise, what does it look like over the next three years?" "Personally, from our own company, we're looking at doing £300,000 this year," "£800,000 next year and, in the third year, we are optimistically looking at just over £2 million." "Tell me what that looks like in terms of the PL." "Probably, net, I think maybe we should go maybe 10%, if we're lucky." "Not terribly exciting, is it?" "It's not terribly exciting." "Forgive me, what we're trying to do is prove a market point," " here in London." " But you're looking at a valuation which is 1.6 million." " Yep." " And then you're saying, at the end of three years, whoopy-do, we're making £200,000, which would make the business worth... £2 million?" "I mean, that's hardly worth the risk, is it?" "Nick Jenkins' feelings about the earphones' financial projections come through loud and clear." "And those numbers don't appear to have impressed Deborah Meaden either." "I instinctively know you're good at business, but that's taken my gut instinct to believe that, because you haven't really been able to financially demonstrate this is what is what's it's going to cost us" "to get there and this is our most likely path." "But I think the single biggest thing" " is you're going to need an awful lot more money." " Yep." "Oh, absolutely." "I couldn't agree more." "And that shape of the investment doesn't look right for me." "So, I won't be investing." "I'm out." "A first out for Paul, as Deborah Meaden sees huge spending on the horizon." "Will fashion magnate Touker Suleyman find a fit for Paul's business proposition?" "You haven't convinced me that, apart from you have a good idea, that you have a business that is sustainable." "Cos, at any given point, unless the technology changes, that you can measure somebody's ear online and you can convert that into a sale instantly, you're not going to do it." "And for that reason, I'm out." "You do have a product that people will want." "The question is, is can you get it to them?" "Will you lose a lot of people along the way cos it's not accessible?" "And can you make it for them at a price which makes it interesting to you and also interesting to them as a consumer?" "And I don't think that, yet, is proven." "I just think you're too early for me to invest, so I'm afraid I'm out." "It's a lovely product but, in the long term," "I just worry about how defensible it is and that, unfortunately, is the reason that I can't invest." "So, unfortunately, I'm out." "It's down to the wire for Paul, as a fourth Dragon declares himself out." "But Peter Jones was a big fan of the product earlier." "Will his enthusiasm convert to investment?" "Firstly, I really like it." "The quality of what you've put together and how you've done it is first-class." " Thank you." " It's as good as I've seen." " Thank you very much indeed." "And I like what you've done and I like how you've put it together." "But..." "I don't like the business model at the moment and I think you're almost ahead of yourself." "The capital requirement for this business is substantial and that's the reason why I'm going to say" "I'm not going to invest and say I'm out." "But I hope I see Snugs on the high street cos I'm a buyer." "I hope you do too." "Thank you very much indeed." "So, that's the end of the line for Paul, as praise for his product fails to translate to cash." "At the end of the day, they didn't want to invest in our business." "That's not going to stop me for one second." "Other people share my vision and can see the opportunity and like a little bit of risk in life, so it's not for everybody." "Our final business into the Den is the brainchild of husband and wife team Sinead and Adam Murphy." "They've ploughed their hearts and souls into setting up their company, but will it pay off with our investors?" "Hopefully, we will come across well to the Dragons." "It's difficult to know if they're going to like us or loathe us." "So, fingers crossed, yeah, they'll like us." "(Good luck.)" "(Good luck.)" "Hello, Dragons." "My name is Sinead, this is my husband, Adam." "We are parents to three young children and cofounders of a company called Shnuggle." "We design clever baby products for modern parents." "We're here today to ask for your investment of £75,000 in return for a 5% stake of our exciting and growing business." "When our first little girl was born, she was quite a sick baby." "As new parents, this really focussed our attention on the products that were available in the market and the gaps and room for improvement." "Our first product idea was the modern Moses basket, a very popular product, but hadn't been given any attention for a long time." "It's made from plastic, so it's wickerless." "It's hypoallergenic, easy to clean and a lot stronger than traditional baskets." "Our next product was the Shnuggle bath." "The Shnuggle bath is clever." "It's got a bum bump in the bottom that stops the baby sliding under, the large foam backrest and it really makes it much easier for parents to wash the baby." "In just 12 months, the bath's sold over..." "Excuse me... 45,000 units worldwide." "Last year, our revenue was over £600,000, with a gross profit of 200, and our three-year forecast is 1.2 this year," "2 next year and 3.3 million the following year." "At the moment, we sell across the UK and Ireland, with key accounts, such as Amazon, John Lewis and The White Company." "We have just been signed up as suppliers to Mothercare and Tesco's." "Thank you so much for your time and we welcome your questions." "Sinead and Adam Murphy from County Down are here to raise £75,000." "In return, they'll give away just 5% of their company." " Can we have a look at it?" " Of course you can." " Please do, absolutely." "So, one of the unique selling points is that..." " LOUD CRACK" " Oh, he's going to break it!" " Ooh!" " Sorry, guys." " We do test them for the weight of the baby but, yeah..." " PETER:" " Has it been tested for a Touker baby?" "Don't help him out, don't help him out!" "This is..." " LAUGHTER" " Wow!" " He's done it, he's done it." " He's done it." "Touker Suleyman's unconventional product road test has left the entrepreneurs with a patch-up job." "But Peter Jones has a problem he's not sure is quite so rectifiable." " So, Adam, Sinead." " Yes." " Have you gone out on a limb with the valuation?" " We don't think we have." " No." "Because you've come in and you've clearly valued your business" " at £1.5 million..." " Yep." "..the traffic light and the alarm's going off in my head and I'm pretty sure you said that you had only turned over £600,000 last year, making a gross margin of 200." " That's correct, yes." " What was your net profit?" "Net profit was £22,000." "So, you have a business that made £22,000 last year that you believe is worth 1.5 million today." "And our forecast this year, that we're already starting to work towards is 1.2 million and we should have a net profit of £120,000 this year." "What's your run rate in the last quarter?" "I would say it's in the region of 350, maybe, in the last three months." " And what profit has that brought into the business?" " 3.5%." "So, you've made £9,000 in the last quarter." " Correct, yeah." " So, you're not on the run rate of 120 yet then?" "No, the way that we've built that forecast is the new products which are coming in very soon." "Right." "I'm struggling to get past, in fact, getting to the point where I get annoyed about this valuation." "Because your business is very clearly, at this stage, not worth the money that you're suggesting, and every time I think," ""Well, actually, I can change that," but I can't really, cos you've come in with the most ludicrous, ridiculous, stupid valuation." "Peter Jones is not impressed with the entrepreneurs' financial appraisal of their business." "Now Nick Jenkins wants to know if Sinead and Adam have the credentials to back up that price tag." "I wouldn't have a problem so much with that if one of you had said, for example, "I spent 20 years in Mothercare." ""I was commercial director, I know what this market is."" "I'd think, "What are the elements that are going to make this work?"" "But it's your chance of getting there..." "Maybe we should tell you a little bit more about some of the other things that are giving us our confidence." "Yeah, yeah." "Um, in terms of the US market, we are just about to become suppliers with buybuy BABY and Babies R Us." "We have also produced the bath in a white label for Dorel, which are one of the largest baby brands in the world, just for Brazil." "The first big distributor that we've worked with is in China and now they're looking at taking a sort of 40-foot container from us every month." "Not bad going." "Really is not bad going at all." "A timely revelation of some potentially lucrative international business deals silence a sceptical Nick Jenkins." "Will global business giant Touker Suleyman give Shnuggles' export plans his seal of approval?" "I think you've done great because you've looked at the international market." " There are 800, 900,000 babies a year in the UK?" " Yep." " Roughly." "There are a lot more in China." " Yep." "A lot more in the States." "I've just come back from the States and it's a massive market" " and the fact that you are thinking international..." " Yeah." "..makes the proposition a lot, I think, more viable." "I just happen to be in that little sector at the moment." "Er, I've just got to get my head round the valuation." "Touker Suleyman hints at investment but isn't yet showing Sinead and Adam the colour of his money." "As he continues to weigh up the investment proposition, millionaire mum of four, Sarah Willingham, is weighing up their USP." "There are so many products out there, there really are." "And, to be honest, they all do the same thing." "The question is, is can you develop a brand?" "And that's very expensive and really hard work and I think that's going to take a lot more than 75 grand." "What we're finding, which has helped, is people are kind of getting on board with the story of us and how we started the company and the fact that we have our own children and that's inspired the design of the products." " PETER:" " Why is it such a unique story?" "Sorry, I'm missing this." " I'm missing that as well." " Why is this a unique story?" "Well, it's not necessarily a unique story, but we've found that a lot of the customers who are buying from us, they just love what Shnuggle is about." "They love the fact that somebody" " that's already had a child invented it?" " Yes, and they..." " But..." "That's the bit..." "I don't know." "We're both struggling with that one." " Yeah." " You're not unique in that." "Honestly, I was out there in the street the other day." "There were LOADS of children out there." "You are NOT the only people." "It doesn't look like Peter Jones or Nick Jenkins are buying parenthood as a USP." "And now Deborah Meaden thinks the fledgling entrepreneurs have made a schoolboy error." "I don't think your branding's strong at all." "If you look at that, I think you've got three brands on there." " You've got Dreami, you've got BumGo and you've got Pebbly." " Yeah." " What you haven't got is Shnuggle." " Yeah." " I'd think that was a Dreami." " SARAH:" " That is so true." "I would have no idea that was a Shnuggle." "Um, do you know what my overriding thing is, and it's a personal thing?" "It's..." "I don't even have children." " I have to feel something, you know." " Sure." " And I just think, "Of course I could do it as a job"." " Yeah." " But I don't feel it." " OK." " Because it's just not..." "So, you know, for totally personal reasons," "I'm really sorry, but I won't be investing." " Thank you." " Thank you." "Deborah Meaden struggles to bond with Shnuggle, becoming the first Dragon to go out." "Could Sarah Willingham be feeling a little more positive?" "What you've produced is aesthetically really pleasing." "It's a nice product and I like the idea of the Moses basket." "I think it's good." "But you can't patent a plastic Moses basket." "And if you go out there and you effectively educate people that a plastic Moses basket is the way forward" " cos wicker can be really difficult to clean... certain things..." " Yes." "Um, how easy is it going to be for somebody else to come out with that?" "So, you've got to be there with your brand, and that's where I think you're going to struggle." "So, I'm going to say I'm not going to invest," " so I'm really sorry, but I'm out." " Thank you." " Thank you." "I think you've done a cracking job of getting the business to where it is today." "My concern is about the probability of getting to this position of selling 3,000,000 a year." "You may well, but the probability of you getting to that 3,000,000 isn't enough to take me over the line at this valuation." " But I really do hope you get there." " Thank you." " I'm afraid I'm out." "Appreciate that, thank you." "Nick Jenkins decides the investment isn't a safe enough bet for him." "Has Peter Jones heard anything to persuade him the business is worthy of that seven-figure price tag?" "I'm still miffed." "Um..." "I don't think that you will get an investment from anybody at £1.5 million for your business." "But you have done a great job to launch a company and it's wonderful to see." "But you leave me no room, because there's no question, even if I was really interested..." "I..." "You're not going to give the equity away." "I know that already." "On that basis, I can't invest, so I'm out." " OK, thank you." " Thank you, Peter." "That valuation takes Peter Jones out of the investment equation." "But will the Dragon that broke the product earlier be prepared to broker a deal now?" "Look, I think..." "I like the product, I like what you've done." "And I like the fact that you're taking a traditional product" " and you're modernising it." " Yeah." " Yeah." "And I think I can add a lot of value to this." "I'm going to make you an offer." "Your valuation's out." "You want £75,000 for 5%." "Well, I'm going to give you £100,000." "OK." "But I want 30% of the business." "Cos I believe that I can take you to a next level a lot quicker," " especially in America." " Mm-hmm." " So, I'll give you more than you're asking for..." " Sure." "..cos I think you're going to need it." "And when I get my money back, I will give back 15%." " So..." " Could we have a little chat?" " Sure." " Thank you." "Touker Suleyman is offering £25,000 more cash than the 75 the entrepreneurs were hoping for." "But in exchange, he's asking for 30% of the equity - way above the 5% they were looking to give away - and slashing the valuation of their business from £1.5 million to £330,000." "Firstly, thank you very much for the offer, but we can't go that high." "We have a counter, which is we will give up 15% and then if we hit the targets in the coming year that we said, the £1.2 million, we'd like to buy back 5%," "which would leave you with 10%." "Is that something that would work?" " Well..." " We would love to have you on board, we really would." " Yeah." "I'd reduce down to 25% and then, when I get my money back, down to 15%." " Because then it gives me enough to focus on to make it happen." " Mm-hmm." "Um, and I think I'm giving you" " more money than you're asking for." " Mm-hmm." "I am..." "I'm happy." " Yeah, me too." " Mm-hmm." " We'd be happy to do that." " Great!" " SARAH:" " Fantastic, well done." "Congratulations." " Thank you." " Well done." " Thank you." " I'm looking forward to it." " Thank you." " You're not allowed to get into any more Moses baskets." " No." " Please don't." " Don't break any more." " I think in the US, this will go down fantastically." " Yeah, great." " Yeah." "Well, that's the way to do it." "Sinead and Adam may well have given away more equity than they'd hoped, but they now have £25,000 more cash than they came in for and a successfully negotiated ratchet agreement with a global tycoon." "Touker, you could end up now, after that demonstration," " with a new nickname." "The Baby Dragon." " The Baby Dragon." " Well done." " Thank you." " SARAH:" " That was really great, well done." " He broke our basket." " I know." "I don't think that working with Touker is ever going to be dull." "LOUD CRACK" " Ooh!" " LAUGHTER" "I have no idea what to expect from our future meetings with him, but I can't wait." "Over the years, the Dragons have physically broken quite a few products in the Den, usually in the course of appraising their robustness, rather than applying a Touker-style stress test." "But, as the old china shop adage goes, if you break it, you buy it, and Touker Suleyman certainly took that to heart tonight." "Coming up next time..." " Whoa!" " It's quite good, isn't it?" "You haven't got a very unique product, so I think you're vulnerable." "This is like a fundamental part of the business." "What does the product cost to make?" "You are probably one of the most appealing individuals to invest in that I've seen in the Den for a long time." " I'll make you an offer." " I'd like to make you an offer." "I'd also like to invest." "So, I'm going to make you an offer and I'm going to match these guys." "I'm going to make it really hard for you." "I'm not even going to waste my breath or my time." "I'm out."