I’ve been an avid fan of Dragons’ Den for many years, and have often wondered if there’s a recipe for success when it comes to the perfect pitch. Intrigued, I did some research into all of the investments that have been made over the last 13 series, to see if there were any common traits shared by the entrepreneurs, their business idea and their pitches.
What I found was that out of 187 successful businesses, almost a fifth (17.11 per cent) of investments were given to food and drink companies (remember Levi Roots from Reggae Reggae sauce in series 4? Today he’s worth an estimated £30 million!). Clothing, technology and businesses relating to products and services for children were also well received. As for the most popular pitches, they involve two entrepreneurs who ask for £50,000 in exchange for 40 per cent equity share.
How does all this compare to what we’ve seen so far in Series 14?
Food business remain at the top of the chain
A total of ten investments were offered during the first half of Series 14 (the second half will air later this year), with a third of those going to food and drink businesses. In episode one, Jon Hulme and John Burke received £77,000 in exchange for 12.5 per cent of their gin subscription company, followed by Andrew Allan and Nick Coleman, with their pork company, Snaffling Pig, and Jacob Thundil, who secured £75,000 for his coconut-product brand Cocofina. Investments were also secured in the cleaning, technology, manual labour, clothing and children and baby sectors.
If you’re wondering whether the other figures add up, they do! Seven out of the ten successful pitches were made by a duo. The most common investment to ask for was split evenly across £70,000, £50,000 and £40,000 (two each), while the most common share of equity was 30 per cent (slightly lower than what I found through my own research). As for the investors, Touker Suleyman and Deborah Meaden said ‘yes’ to the most businesses (four each), while Sarah Williingham, Nick Jenkins and Peter Jones offered cash to two each.
What can entrepreneurs take away from the show?
Gimmicks can work – in the right circumstances. Remember Irish man Jamie Lawlor from the last episode? No? Well, maybe you might remember his product, Kids Flush (for all the right or wrong reasons, depending how you look at his business idea). It wasn’t long before four of the Dragons declared out, but retail tycoon Touker Suleyman saw potential in the idea and offered him the full £40,000 but for a 40 per cent share in his business (double what Jamie asked for). The public must have liked it too as the Kids Flush website crashed soon afterwards!
Top tip: You should always be prepared if an investor asks ‘what next?’ Touker certainly seemed to appreciate that Jamie had thought about the future of his business, beyond his initial Kids Flush product, when he said that he could expand into other bathroom-related products, and gave examples.
Check all of your claims are right
If you’re claiming that your product is something (ie environmentally-friendly, paraben-free), make sure that it actually is! This was the downfall of Mustafa Mehmet, in episode seven, who had developed his own nail polish business, Well Gel London. The Dragons loved his story, and the fact that he was a former car-sprayer, but when Deborah Meaden checked his paperwork, she was disappointed to see that his product was not as non-toxic and natural as he claimed.
Top tip: Think about your USP. Why would customers choose your products over your competitors? Sarah Willingham said she’d tried fast-drying nail polish before (debunking one of Mustafa’s USPs), and with the non-toxic and natural claims turning out to be false, you’re left with an idea that’s already been done many times over.
Know your business inside out
This should be obvious, but it always amazes me how many entrepreneurs are unprepared and stumble over their figures. It’s as if it’s the first time they’ve practiced their pitch, and they hadn’t thought of any additional questions that the Dragons might throw in (which everyone knows they like to do!) Farheem Badur’s wholesale, restaurant and sauces firm was one food and drink business that didn’t do well. Unfortunately he struggled to explain his business and his financials and as a result all five investors declared themselves ‘out’.
Top tip: Investors may be clever, but it doesn’t mean they’re just going to ‘get’ your business. Think about how you’d explain your company to your average layperson, and test it out on friends and family. If an investor says “this is one of the most frustrating pitches I have ever been through” (as Deborah Meaden did in Farheem’s pitch), then you know it’s pretty much game over.
Don’t ignore the feedback
How many times have people received good feedback in the Den, and then come out and defied it? Some are arrogant, some are defensive and some have that ‘I’m going to prove you wrong’ attitude that can be good in certain circumstances, but these Dragons are experienced and know what they’re talking about.
Top tip: If alarm bells are ringing for an investor, then they should be for you too. Sometimes you’re so close to your own business that you need an outside voice to be honest and give some constructive criticism. Sometimes it’s better to stop now, before you end up spending thousands (or in some case hundreds of thousands) on a product that investors have said won’t work.
Chloe Webber is operations director at Company Check.