The Dragon’s Den on BBC2, January 4, 2005

I just caught an episode of the Dragon’s Den on BBC2. Firstly, I think investors should never address entrepreneurs the way those guys do. Investors should be critical without being cynical and certainly not rude. Granted, one of the entrepreneurs was very rude to the investors, but, two wrongs don’t make a right.

For the designers from Glasgow: I realize getting funding for your type of business is difficult. The start-up costs are high and the potential return for an investor is minimal. I think you would have an excellent opportunity to set up a “store within a store”, i.e. setting up shop in the Glasgow equivalent of Selfridge’s on a revenue-share basis. That cuts your overhead to zero out of pocket expense, gives you the type of high profile environment you need and gets your business rolling. Once profits are there, you can open your own boutique. Who knows, maybe your next investor will decide to invest after trying out your designer wares. Good luck!

The only deal that went through was £150,000 for 40% of the Umbrella company disguised as an advertising business for the London Tube. The entrepreneur was very reluctant to move from the original offer of 20% for £150,000… My main question was how much has he put into the company? The equity investors are essentially taking all of the risk, and if the business gets sold for £1 million, the entrepreneur goes home with £600,000 with an initial investment of £0 and the investors get £400,000 after investing £150k. Who is the dragon in that scenario?

I look forward to the next episode…

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