Dragons’ Den, the hugely popular BBC television show which sees entrepreneurs pitch their ideas to multimillionaires in order to secure investment, has entertained viewers for a decade.
It has showcased some ingenious, and some bizarre, pitches delivered by hopefuls – some of our clients among them - seeking the capital to continue pursuing their business dreams. However, more often than not, the entrepreneurs are ousted from the room following a unanimous declaration from the Dragons of, ‘I’m out’.
To date, of the 162 total agreed investments the show has generated from series one to 12, 87 never went through. Similarly, many businesses that featured on the show have become very successful despite failing to secure investment. Whilst each of the Dragons are experienced investors in their own right, the subsequent success of many Dragons’ Den rejects raises the question – Do the Dragons really know best?
Rob Law, the creator of Trunki, a children’s sit-on suitcase, was sent packing without the £100,000 investment he required in return for a 10% stake in his company. While initially taking a liking to his product, the deal fell flat after Theo Paphitis managed to break one of the straps resulting in the Dragons’ questioning their quality. Since then, Trunki has gone on to become outrageously popular having sold over two million cases and distributing to 97 countries worldwide.
Tangle Teezer – a brush designed to glide through knotted and tangled hair – was ridiculed by the Dragons as being a ‘hair-brained’ idea. Shaun Pulfey, the man behind the product, offered the Dragons 15% of his company in return for £80,000. Now, Tangle Teezer has a projected turnover of £34 million for this year, having been stocked by leading retailers, endorsed by celebrities and sold in 70 countries worldwide. Had the Dragons invested, they would have made an £8 million return.
Success through publicity
That’s not to say that even an apparently failed appearance on Dragons’ Den is without its benefits. Those who go on the show often do so with the aim of generating free publicity, expanding their client base and increasing the scope for potential future investors.
‘The Housecrowd’, the first property crowdfunding platform in the world, recently appeared on the show with hopes of securing £1 million of investment for 5% of the company, having valued the business at £20 million. Despite the knowledge that they would be unlikely to achieve this ambitious amount, Frazer Fearnhead, one of the founders, has claimed that following the show his web traffic has increased and the business has been approached by several angel investors. Perhaps all publicity is good publicity.
You don’t need a Dragon for entrepreneurial success
Due to the growing popularity of alternative finance the means for securing investment have become more accessible. Rather than pitch ideas on national television, increasingly entrepreneurs have sought to take their chances by promoting themselves through crowdfunding platforms. Those that still do appear on the show acknowledge that it is both an opportunity to secure investment and the cheapest way to get in front of millions of potential customers.
The advice for those seeking to become the Dragons of the future is, of course, to remain positive and not to accept defeat. Even the entrepreneurs who have made it suffered rejection on the road to success, while investors with a wealth of experience have missed out on lucrative investment opportunities because they themselves could not see the potential.
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The start-up and high-growth arena in Scotland is thriving and our specialist team is recognised as leading legal advisers to the entrepreneurial community. Our lawyers work closely with businesses at every stage of their life-cycle, from inception right through to a successful exit. Find out more about how we could help you pursue your ambitions here: