It’s week five in the Den. This week I’ve been reading about Shark Tank the new American version of the Dragons Den, I wonder if it will make it’s way to the British shores! Reading a few reviews it has it share of odd pitches including a bluetooth headset which is implanted under your ear! Back to the British series though!
Jane Rafter – Slinks
Jane came into the den looking for £75,000 for 20% in her company which produces sandals for every occasion. The sandals are interchangeable with different uppers and straps giving you “3 pairs in 1″. Jane gave a confident and well rehearsed pitch and then passed the sandals round to the Dragons.
Peter Jones jumped straight in asking whether the system of interchangeable sandals was patented. There is a patent pending on this. Duncan Bannatyne thought the product was an excellent quality but wasn’t sure their was a business there and started to question the financials.
Deborah Meaden felt the shoes weren’t comfortable and Jane refitted the shoes on her. Peter and Duncan declared themselves out. Theo Paphitis then questioned what the money would be spent on and Jane gave a very long and thought out list of spending requirements and future plans.
Deborah declared herself out, Theo though made an offer based on re-engineering her marketing strategy. He wanted 20% for half the money. James Caan agreed with Theo so Jane had an offer for 40%. Jane wanted to negotiate down to 30% but the dragons wouldn’t budge.
Jane dealt for 40%!
Paul Ward – Germwarfare
Paul wanted £100,000 for just 5% in his company Germwarfare. The money was needed to advertise their newest product range “HALO” which according to their site is the only Non Bio Liquid laundry detergent on the market scientifically proven to kill Hospital Super Bugs MRSA and C.difficile spores at 30 degrees.
Pauls business had shown good profits in the past from alcohol gels which are found in hospitals etc. Theo couldn’t understand why they needed the investment if they were so profitable. Theo found that Paul also wanted business expertise and contacts.
Theo and the dragons were upset that Paul and his company were unwilling to negotiate on the 5% valuation and most of the dragons went out.
James Caan gave it a go though and offered the full money for 30% but would give 10% back each year if they made their targets. However Paul declined. Peter felt that the Paul was not their for investment… maybe just advertising?
James Nash – Wine Innovations Ltd
http://www.wineinnovationsltd.com
James came into the Den seeking £250,000 for 25% in his company Wine Innovations Ltd. His company produce pre-filled wine glasses with peel-able lids.
James gives a slightly nervous pitch. Deborah asks for sales information, so far they had tried the product at 2 outdoor concerts and sold approximately 20,000 at each. Each product cost just 38p to produce. Duncan felt that James’ patent for sealing the wine and removing the oxygen wouldn’t stand up.
Deborah then queried the letter of intent from which the company’s valuation was based on. This was not an order or really an attempt to order. from this both James and Deborah declared themselves out.
James brought in his advocate a wine marketing manager. Duncan went out because no one had made an order. Peter was out because the the share of the company was unrealistic. Finally Theo was out because he didn’t want to invest and then see the patent fail.
Carol Savage – MyDish
Carol Savage was looking for a £100,000 investment in her website MyDish for 10% of the company.
MyDish describes itself as “a place to collect all those fabulous family recipes that we don’t want to lose, that we would like to preserve for our friends and family, and share with the world.If you’re looking for a memory or an inspiration”
This pitch particularly interested me as I have a few websites, though I’m not sure I would value any at £1,000,000!!! So while I was researching this episodes pitchers I thought I would give a quick site review.
The homepage is a little confusing to begin with, there are several feeds (forum feed, comment feed,) and as a new user I didn’t know where to start, though I found the recipes section and there was a vast array of recipes sorted into sensible categories. It was frustrating that on the recipe listings page I couldn’t click on the beautiful recipe thumbnails, you had to click on the name underneath, but it just seems second nature to try and click the image. Also on this listing page and indeed the recipe page there was no star rating which I would have looked for to help me pick a recipe.
I then went on to look at it from a business point of view. How does it make money? Well actually I couldn’t figure this out, there was a small shop section which allowed the purchase of some cookbooks (but surely all the recipes you need are on the site!) and cookery lessons (but these seemed to be direct links not affiliate links). There were very small tastefully done adverts on some pages but I didn’t see these as enough to make the business profitable. I’ll have to wait and see what she says in the den…
In Carol’s pitch she spoke well about the site and the inspiration behind it. The current revenue streams were personalised cookbooks, advertising, selling cookbooks, selling to employers for staff to use (I didn’t understand this one). Carol’s site receives about 100,000 visitors a month and has invested £50,000 in the business. in the first 3 months of this year she has generated £30,000 which impressed me. She also revealed the site has a white label solution so company’s can create their own version of the site on their internal networks. The site cost £600,000 to create.
These massive start up costs were out of proportion to the profit expectations. Theo was going to set up MrsPsTreasuredRecipes.co.uk – the domain is still available so get in quick Theo!
Peter felt the site was not a money making business and declared himself out, James agreed and was also out. This was followed by Duncan. Deborah however loved the site, and discovered that the site had a strong link up with supermarkets, to automatically add the ingredients of a recipe to the basket. Deborah offered the full amount for 15%. Theo was very impressed by Carol and Theo Paphitis matched the offer, but said she could take both offers for 30%. Theo wouldn’t go alone, Carol could either choose just Deborah for £100,000 or both for £200,000. Carol dealt with Deborah for 15% and £100,000.