“The Most Ludicrous, Ridiculous, Stupid Valuation!” | Dragons’ Den

hopefully we won't come across well to the dragons it's difficult to know if if they're gonna like us or lowes us so fingers crossed yeah they like us [Music] hello dragons my name is Sinead this is my husband Adam we are parents to three young children and cofounders of a company called snuggle we design clever baby products for modern parents we're here today to ask for your investment of seventy five thousand pounds in return for a 5% stake of our exciting and growing business when our first little girl was born she was quite a sick baby as new parents this really focused our attention on the products that were available in the market and the gaps and room for improvement our first product idea was the modern Moses basket a very popular product but hadn't been given any attention for a long time it's made from plastic so it's wicker 'less it's hypoallergenic easy to clean and a lot stronger than traditional baskets our next product was the snuggle bath so there's no bath is clever it's got a bump bump in the bottom that stops the baby sliding under the large foam backrest and it really makes it much easier for parents to wash the baby in just 12 months the bath suit over 40 excuse me 45,000 units worldwide last year our revenue was over 600,000 pounds with a gross profit of two hundred and a three-year forecast is 1.2 this year to next year and 3.3 million the following year at the moment we sell across the UK and Ireland with key accounts such as Amazon John Lewis and the white company we have just been signed up as suppliers to Mothercare and Tesco's thank you so much for your time and we welcome your questions [Music] Sinead and Adam Murphy from County Down are here to raise 75,000 pounds in return they'll give away just five percent of their company we have a look screws do so one of the unique selling points is Tuco Suleiman's unconventional products road test has left the entrepreneurs with a patch-up job but Peter Jones has a problem he's not sure is quite so rectifiable so Adam Sinead yes have you gone out on a limb with the ver with the valuation we don't think we have because you've come in and you've clearly valued your business at one-and-a-half million pounds yeah the traffic light and the alarms going off in my head and I'm pretty sure you said the you had only turned over 600,000 last year making a gross margin of 200 that's correct what was your net profit net profit was 22,000 so you you have a business that made 22 thousand pounds last year that you believe is worth 1.5 million today and our forecast this year that were already starting to work towards 1.2 million and we should have AB net profit 420 thousand this year what's your run rate in the last quarter I would say it's in the region of 350 maybe in the last three months and what profit has that brought into the business three and a half percent so you've made nine thousand pounds in the last quarter okay yeah so you're not on the run rate of hundred twenty yet then no the way that we've really built that forecast is the new products which are coming in very soon right I'm struggling to get past in fact getting to the point where get annoyed about this evaluation because your business is very clearly at this stage not worth the money that you're suggesting and every time I think well actually I can change that but I can't really because you've come in with the most ludicrous ridiculous stupid valuation Peter Jones is not impressed with the entrepreneurs financial appraisal of their business now Nick Jenkins wants to know if Sinead and Adam have the credentials to back up that price tag I wouldn't have a problem so much with that if one of you had said presenting I spent 20 years in Mothercare I was commercial director I know exactly what this market is I think okay what are all the elements are going to make this work but it's your chance of getting there maybe we should tell you a little bit more about some of the other things that are giving us our confidence yeah yeah yeah in terms of the US market we are just about to become suppliers with bye-bye baby and Babies R Us we have also produced the bath in a white label for at Doral which are one of the largest baby brands in the world just for Brazil the first big distributor that we've worked with is in China and now they're they're looking at taking a sort of 40-foot container from us every month oh my gay really it's not bad going at all a timely revelation of some potentially lucrative international business deals silence as skeptical Nick Jenkins will global business giant Tuco Suleiman give snuggles export plans his seal of approval I think you've done great because you've looked at the international market there are eight hundred nine hundred thousand babies a year in the UK yep roughly there a lot more in China yeah a lot of states and I just got back from the states and I think it's a massive market and the fact that you are thinking international yeah makes the proposition a lot a bit more viable I just happened to be in that little sector at the moment just going to get my head around the valuation Tuka Suleyman hints at investment but isn't yet showing sinead and Adam the color of his money as he continues to weigh up the investment proposition millionaire mom of four Sarah Willingham is weighing up there USP there are so many products out there I mean there really are and to be honest they all do the same thing the question is is can you develop a brand and that's very expensive and really hard work and I think that's going to take a lot more than 75 grand what we're finding which has helped is is people are kind of getting on board with the story of us and how we started the company and the fact that we have our own children and that's inspired the design of the products why is it such a unique story sorry I'm missing that as well I mean why is this an unique story no well it's not necessarily a unique story but we found that a lot of the customers who are buying from us they just love what's Naugle is about love the fact that somebody that's already had a child invented it yes and they that's the bit we I think I didn't both struggling with that one I mean you're not unique in that I was I honestly I was out there in the street the other day there were loads of children out there you're not the only people it doesn't look like Peter Jones or Nick Jenkins a buying Parenthood as a USP and now Deborah Medan thinks the fledgling entrepreneurs have made a schoolboy error I don't think your branding strong at all [Music] if you look at that I think you've got three brands on that you've got dreamy you got bum go and you got pebbly yeah what you haven't got is snuggle yeah I'd think that was a dream me that is so true I hadn't even I would have no idea that lucky do you know what my overriding thing is and it's a personal thing not it's I don't even have children I have to feel something you know I just I just think yeah of course I could do it's a job I didn't feel it because it's just not so um you know for totally personal reasons I'm really sorry but I won't be investing thank you - thanks Debra Medan struggles to bond with snuggle becoming the first dragon to go out could Sarah Willingham be feeling a little more positive [Music] what you've produced is aesthetically really pleasing you know it's a nice product and I like the idea of the Moses basket I think it's good but you can't patent a plastic Moses basket and if you go out there and you effectively educate people that are plastic Moses basket is the way forward cuz wicker can be really difficult to clean certain things yes how easy is it going to be for somebody else to come out with that so you've got to be there with your brand and that's where I think you're gonna struggle so I'm gonna say I'm not gonna invest so I'm really sorry but I'm out thank you thank you I think you've done a cracking job of getting the business to where it is today my concern is about the the probability of getting to this position of selling 3 million a year you may well but the probability of you getting to that 3 million isn't enough to take me over the line at this valuation but I really do hope you get there thank you Nick Jenkins decides the investment isn't too safe enough bet for him as Peter Jones heard anything to persuade him the business is worthy of that seven-figure price tag I'm still miffed I don't think that you will get an investment from anybody at 1.5 million for your business but you have done a great job to launch a company and it's wonderful to see but you you leave me no room because there's no question and even if I was really interested you're not going to give the the equity away I know that already and that basis I can't invest so I'm out thank you that valuation takes Peter Jones out of the investment equation but will the dragon that broke the product earlier be prepared to broker a deal now look I think I just said I like the product I like what you've done and I like the fact that you're taking traditional product and in your you're modernizing it yeah yeah and I think I could have a little baggie for this I'm gonna go offer [Music] the evaluations out you want 75,000 for 5% well I'll give you a hundred thousands okay but I want 30% of the business cuz I believe that I can take you to the next level a lot quicker especially in America so I'll give you more than you're asking for sure because I think you gonna need it and when I get my money back I will give back 15% so could we have a little chat sure thank you touka Suleiman is offering 25,000 pounds more cash than the 75 the entrepreneurs were hoping for but in exchange he's asking for 30% of the equity way above the 5% they were looking to give away and slashing the valuation of their business from 1.5 million to 330 thousand pounds firstly thank you very much for the offer but we can't go that height we have a counter which is we will give up 15% and then if we hit the targets in the coming year that we said the 1.2 million we'd like to buy back five which would leave you at 10 is that something that would work what we'd love to have you on board we're really good [Music] I'd reduce down to 25 and then when I get my minute down to 15 because then it gives me enough to focus on to make it happen and I and I think I'm giving you more money you're asking for I am really happy - great thank you thank you go down I'm looking forward to thank you know you're not allowed to get into any more Moses know I think in the u.s. although none fantastic yeah that's great yeah well that's the way to do it Sinead and Adam may well have given away more equity than their hoped but they now have twenty five thousand pounds more cash than they came in for and a successfully negotiated ratchet agreement with a global tycoon cuckoo you could end up now after that demonstration with a new nickname the baby dragon well done thank you really great I don't think that working with 2k is ever going to be dull I have no idea what to expect from ya our future meetings with them but I can't wait [Music] you you

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Keywords: dragons den, dragons den uk, evan davis, deborah meaden, peter jones, touker suleyman, tej lalvani, business pitching, entrepreneur, game show, shark tank, dragons, den, best, bits, new, worst, pitches, funniest, most, shocking, ideas, dragons den funny, dragons den season 16, dragons den best pitch, peter jones dragons den, young entrepreneur, successful, jenny invest, jenny campbell, dragons den touker breaks bed, touker breaks moses basket, dragons den ridiculous valuation

Id: eK-vqyhrHFw

Length: 16min 3sec (963 seconds)

Published: Sat Aug 08 2020