Dragons' Den Channel 7

[ren-A]

What's the company worth?

It's odd isn't it? I saw one guy offer his company at something like 10% for $320,000. In other words he "valued" the company at $3.2m.

The Dragons, playing him along I feel, got him to move to something like 50% for $320,000 - valuing the company at $640,000.

If you had done your projections soundly and had solid financial assumptions (and I guess these aren't televised as they'd bore the shirt off most viewers), then how on earth can your company value decline by 80% in a matter of miinutes? With no change to the market, costs, price, etc?

Just suggests to me that good ideas and sole practitioners doesn't necessarily impart business sophistication or success.

 

[thefirstbruce]

Doons, I would agree there are serious shortfalls with the series. For instance, to have the dragons making offers on the spot, without any research into the relevant industry, seems unrealistic. How could they possibly know how much growth potential a business has without researching the industry, competitors, barriers to new competitors, other developments and innovative strategies in the industry, legal, accounting, copyright, patent, and regulatory matters, etc.

For the business owners to unconditionally give away 50% of a business also seems very dumbed down. I can only assume there is more going on behind the scenes than is let on.

As for VC money, I have heard some horrible stories about the harsh deals they do. I'd be genuinely interested in some of the deals your company have done recently just for comparison's sake, and the industries/sectors your company specializes in.

 

[keithj]

As for VC money, I have heard some horrible stories about the harsh deals they do.

It's purely business.

Having been on the receiving end of VC/angel deals - they do business on THEIR terms, that's how they got to be the dragons. If X won't do a deal, there will always be a desperate Y that will - they can pick & choose. And they always want 50%+ - they are control freaks (not that there's anything wrong with that).

 

[ok180]

I find the show entertaining but a bit strange at the same time.

I still can't understand why people go in asking for like 50k or 100k. I mean if you had an idea that was a goer surely you would go and borrow the funds yourself or save it up?

I can understand in some instances the dragons insight would be helpful. For example that girl who was on the first week who was peddling the trendy shoes for people with sore backs. She sold out to darren. Good call i guess because he has a fasion label himself and contacts in the entertainment industry who could wear them.

What could the dragons possibly offer to someone selling coffins though when they have no knowledge of the industry? I mean yeah great the people who came up with the idea got 165k but didnt they have like another two partners? Couldnt they just come up with 40k each and push the idea?

Strange...

 

[thefirstbruce]

Ok180, I agree it is a little strange, in that it doesn't seem to add up that people with a reasonable track record behind them need to give away 50% of a great idea for less then $100k. Nevertheless, I am into the show. I think at least, it is going to give ppl with a good idea the courage to believe in it and have a go at getting it rolling. And that's what I think Oz needs more of at the moment- a real 'can do' attitude.

And hopefully, the show will get ppl's attention off property being the only way to make money.....

 

[thefirstbruce]

Keith, re VCs, they always justify that only 5% of investments work out, hence the tough deals they do. Though I'd have thought the whole idea of being a good VC would be to get close to 100% of your investments to work.

 

[alwayscurious]

bump

this is on tonight.. set your VCR's to stun..

 

[Rixter]

Decided to watch dragons den tonight for the first time after reading the forum publicity. I enjoyed it alot. Was interesting to see that most of the "Pitchers" had no idea what their buisinesses are worth. Felt that was strange considering all the publicity in books, seminars etc state you should always start out with the end in mind.

Just my perspective - what do others think?

 

[kissfan]

Decided to watch dragons den tonight for the first time after reading the forum publicity. I enjoyed it alot. Was interesting to see that most of the "Pitchers" had no idea what their buisinesses are worth. Felt that was strange considering all the publicity in books, seminars etc state you should always start out with the end in mind.

Just my perspective - what do others think?

Hi Rixter.

Whilst I agree people knowing the value of an already existing company, possibly with the view of expanding, a part of me felt sorry for the applicants that were grilled on not knowing the value of their "proposed" company.

They were people with good ideas, or not so good, just trying to get a leg up, who, with the right push could probably be very successful. It's fairly hard to put a figure on a yet untested product.

Just my thoughts

Regards
Marty

 

[Olly]

I've watched 2 episodes so far and I get the gist of it.
I have the following questions however -

Does the wads of money sitting on their desks actually belong to the dragons?
Assuming that 1 dragon picks or goes into business with 1 pitcher each week and it costs him $50K per pitcher and the show runs for say 13 weeks - is he/she really going to fork out $650k into 13 totally unrelated businesses? e.g. so far a couple of dragons have invested in both coffins and dog boarding kennels (don't know if the same odragons bought into a business in the first epi.)
Just how rich are these dragons?
Who are they and what's their claim to fame?

Am I a bit thick/naive etc., missing something or was all this explained in the first episode which I missed?

As for the coffin idea, I'd already seen something similar called ecocoffin. Made of the same stuff as the ones shown on lifeart, but they were white with a celtic look.

I thought the coffin business was a real goer and something I'd love to put some money into. My mind ran off with more ideas for them just while I was watching the show.

Cheers
Olly

 

[Steve KKK]

Olly,

Check out www.dragonsden.com.au for some of your answers, ie profiles of the dragons and abit about how it works.

You can also leave comments or read other people's comments about each business presentation and about each dragon if you feel like it.

Straight after the show last night I went to this site and the results were already up there, including a link to the pawpaws site which says that the first one is being planned for the Sydney area. Obviously a change of plan from Newcastle and one that would have come from the dragons' input.

Looking forward to more on-screen bouts between Darryn Lyons and Sarina Russo!

 

[vandalic]

The official site is http://seven.com.au/dragonsden/

Josh

 

[Steve KKK]

Anyone watch Dragon's Den last night?

A couple of great ideas and good to see the contestants are hardening up a bit so that they don't become dragon food! Obviously the Dragons want 50+% of a deal but the savvy ones aren't willing to give there businesses away.

 

[thefirstbruce]

Yeah I was multitasking while watching it last night.
Wasn't impressed with some of the ideas. THought the e-mag thing was pretty dodgey. How is one bloke supposed to produce a whole magazine regularly, and keep the content fresh? I agree newspapers are definitely going electronic, but I reckon mags are something people want to be able to take to the dunny or down the beach. And why do a site that focuses on scantily clad women, when the rest of the internet does that for free?????

Only caught the end of the soft drink idea. Obviously a noble concept. Though a very competitive field, and if her sales keep going up, then the big boys will bring in their own lines and bang goes her house and her daughter's.

The wheelie bin boys, well, dur. Fancy mentioning an UK outfit have just started a franchise operation against them. Though good on em for having a go. And Sarina obviously saw a pound of flesh for herself, in their hard work.

Men's moisturizer? Hmmmmm....I know it's a trend, but.......one of the best moisturizers and healers of skin is available for free... It;s the gel inside Aloe Vera stalks. split the stalk, scrape out the gel, pulverize the globs a little, massage into skin for a minute or two before bed. Best thing for sunburn and other skin injuries too. If you grow a few plants in a pot or backyard, you have free instant fresh product available 24/7. Actually, something else that's interesting, is that if you have thick scars anywhere on your body, the medical treatment is to tape silicone over the scar and leave it on for a couple of weeks, changing every couple of days. The scar is resorbed by the body. We use it in physiotherapy all the time. And it works, seriously.

If these are the best ideas and we're only into the third show?, methinks it can only go downhill from here. Which is sad, because the concept is good. I think the show could improve if the dragons actually got more constructive in their criticism- throw in a bit of free marketing advice for nicks. I mean, everytime they are nasty, it puts off prospective business start ups from appearing, and doesn;t make for good tv viewing.

 

[duncan_m]

The wheelie bin boys, well, dur. Fancy mentioning an UK outfit have just started a franchise operation against them. Though good on em for having a go. And Sarina obviously saw a pound of flesh for herself, in their hard work.

The wheelie bin guys should focus on producing the Trailers cheaply and selling them..

 

[lizzie]

wasn't overly impressed with last night ... if there is nothing else to take from last night the show highlighted the absolute need to present professionally.

the ditzy softdrink and salon women drove me nuts with their breathless gushing and hair flicking, despite their good ideas. i don't think the softdrink woman even mentioned that she had the order for product in her hot little hand and only needed the finance to fullfill it, and that the production and distribution were performed by others - she sounded like she did the whole process by herself. the magazine guy came across as a high class pimp

... and have a business plan - know your financials (oops tomorrows' job) and know your potential earnings.

i assume the dragons want minimum 50% so they have control of the company to push it in the direction they believe is more profitable, rather than having to pander to the emotions and whims of the startup-er.

 

[Garry K]

Agree, didn't think much of last nights "applicants".
The organic drink lady's product was great (although, I'm not exaxty sure why it is so different ), but look out for the big cola producer if it actually starts to take market share.

I think the guy from Deakin, supporting the Tasmanian lass re the metrosexual shop, might be in love.

The one area that stands out to me is that these people (applicants) don't have a grasp on how to value a business. It's all about ongoing earnings and profit. The carbabes guy was a classic. No idea other than throwing around catchy sales/marketing jive.

Most just seem to pull a number out of the air, and say this is how much money I want you to give me (sometimes for unknown purposes) and for that I'll give you 10% of the business. At least the bins boys said they had no idea...and they were right. I like what they have done though. I'd gladly give them $10 to rid my wheelie bin of the stink from doggy do.

How does patenting work here?
I have heard that once you put an idea/product on public display you had better have that sorted as anyone could just copy it if you don't.

GarryK

 

[Steve KKK]

I think those that don't make a deal will still benefit from appearing on the show from the exposure alone. That and the fact that a link to their website is posted on the dragons den page of channel 7's site so any prospective investors can easily contact them.

Organic softdrink - great idea which I'm sure the multinationals are aware of the potential market and are either gearing up for it or are not interested due to research showing it is too small a market share. It would be a shame if she lost both her and her daughters houses over it.

Wheelbins cleaners - First thing they need to do is get a business plan sorted with help from Sarina then perhaps concentrate on growing the business and let someone else do the hands-on dirty work.

Mens Salon - Good concept and obviously works well in the Melbourne CBD were I think alot of guys are very conscious of their looks and image. Not too sure about francising into malls though. Perhaps someone will offer to help fund her growth plans but perhaps not on her no-dollars-down terms. As shown last night that doesn't go down well with investors. If you're not confident enough to put any of your own money into the deal, why should they.

Car/babes webmagazine - Nothing new here but I'm sure it would fit into some rich dudes investment portfolio even if it's only so they can have bragging rights that they have such a business on their books. Not much potential for growth as current trents are away from this type of format.

As stated above, for gods sake, do you homework! Know your figures, be realistic, start your offer low so that you have room to move if they counter-offer. Also have a strategy for every potential outcome - know at what price you would sell it all and walk away, know what you would take to sell 50% or 60% of your business. And don't just think $$'s, think about who you would feel comfortable with as a business partner. ie Sarina wouldn't feel comfortable about anything to do with 'sexuality' yet I bet Daryyn would be more than interested if it fitted in with his global scheme of things (check out what business he actually has and how they all fit in with each other).

They are still advertising for submissions on the website so it would be interesting to see if the calibre of business deals improve. Not sure when these episodes were filmed and with Christmas coming up, perhaps they are looking for submissions for series 2.

End of my ranting.

 

[thefirstbruce]

Be wary of patent protection. As I have been warned by 3 patent attorneys, a patent does not protect your design, it gives you the right to defend it. And defending means you need deeper pockets than the patent thief.

 

[Macca]

Hi TFB,

What sort of silicon do you tape onto a scar, if you can get rid of stretch marks you should open a clinic.

My wife and her mates have a moan about them every time there is another grand kid on the way.