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Entrepreneurs, growth & investment

Episode 4 of Dragon's Den/The Apprentice

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INSIGHTS

We were told to expect the unexpected and that certainly happened in this weeks’ episode of Dragons Den.  There was a first in the Den when entrepreneur Charlotte Morley asked if two Dragons, Deborah Meaden and Stephen Bartlett, would both be willing to invest the full amount! Some things were as to be expected however such as the clear theme of circular economy and promotion of healthy lifestyle businesses. So let’s take a closer look at a few of the businesses that walked in the Den this week.

First up was Mark Wong with his non-alcoholic beer, Impossibrew.  Mark was a very impressive entrepreneur, he seemed to have the answer to all the Dragons’ questions and knew his business inside out.  It seemed that all was on track for an investment so it was surprising when one by one, the Dragons all said the infamous words of “I’m out”.  However, Tuca said something that resonated strongly with us and that was that he recognised Mark as a fantastic entrepreneur and if he had another business, not in the overcrowded beer industry, he could guarantee an investment from Tuca.  We see this often with our clients and investors, you do not have to have the prime product or the best pitch, so often investors invest in the entrepreneur because it is with the individual that they see the potential.

This is why documentation such as an investment agreement or articles are often prepared to include “Leaver” provisions whereby if the founder leaves the company within a certain time period, they lose their shares.  This is to incentivise founders to stay at the company as the investors are not only investing in the business, but also as the founder as an individual.  The investor sees the individual founder as the key to success!

It was difficult to watch the pitch from Lewis of Opal Eco. Unfortunately for Lewis, the exclusivity he had in relation to the formula behind his disinfectant product was removed the day before he entered the Den! Opal Eco had an exclusive license in relation to the cleaning formula that was owned and patented by a Danish company.  Due to Brexit, the company that owned the formulation then had to be UK based so they transferred the ownership to another company in the UK.  As a result, the new UK company did not honour the exclusivity arrangement with Opal Eco.  Without this exclusivity, there was no business other than the brand created by Opal Eco.  All of the Dragons empathised with Lewis but obviously, none of them could invest.  Brexit is having huge implications on business in the UK, whether that is through import and export costs or clauses such as this in agreements which can be catastrophic for a business as we saw with Opal Eco.  The key point is to always get your contracts reviewed & be aware of your risks! As soon as you are aware of your risk, it immediately reduces your risk.

Thankfully, the show did not end on a low as in walked Charlotte from The Little Loop! Charlotte’s business was simple…the cost of children’s clothes is high, children grow extremely quickly so why not have a circular business whereby you pay a subscription to rent the clothes and them pass them on once your child outgrows them? This is not a new model and more and more businesses are opting for a circular approach.  Charlotte knew her market, her competitors, her price point and also managed to get across her personal values which she was determined to keep in her business of sustainability and circular economy.  All of the Dragons apart from Peter wanted in!  They all recognised how circular is the upcoming model and Stephen Bartlett went as far as to say eventually it will be a necessity for all businesses and not even a choice.  As a first in the history of the Den, she asked if Deborah and Stephen would both invest the full £70k for 12.5% each!  With Stephen’s passion for circular business and the fashion industry and Deborah’s contacts, they were on to a winner and both agreed.

We are seeing a huge increase in profit for purpose and business for good in our clients.  We agree with Stephen that eventually it will not be a decision and more of a necessity to incorporate principles such as these in everyday business. We regularly advise clients on becoming B-Corporations which is business certification of social an environmental performance. B-Corp is to business what fairtrade is to coffee.

Next up…the Apprentice! The teams were tasked with creating a fish dish to sell at the farmers’ market.  After watching what can only be described as a cringe worthy amount of mistakes for Team Infinity, it was no surprise they were in the boardroom and it was project manager Alex Short who was given the boot. Lord Sugar commented that it was without a doubt the worst failure he had ever experience in the boardroom as he sent them out to get the catch of the day…and they didn’t even sell it! Sometimes, from our experience, it really is the simple things that should never be overlooked. This is equally as relevant to your business and the simple legal aspects such as foundations and structure.  Having solid foundations is key to success for growth as without it, it could knock a big 0 off of a potential investment round.

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Speak to us today on 0330 159 5555

Get in touch

CONTACT US

Get in touch

Call us for free on 0330 159 5555 or complete our online form below to submit your enquiry or arrange a call back.