Promising Pitch Falls Apart After Shocking Revelation | Dragons' Den

i had quite a disruptive childhood but i pursued my education and when i was accepted to university i actually did a test and was found out that was dyslexic it can affect numbers you have to overcompensate for things so you end up having to work twice as hard [Music] i think there's some clear synergies between the business that i've built and the businesses that particularly tuca sullivan has built i'm just really excited to see what happens [Music] hello everybody i'm ellen from blue badge company and i'm pitching for seventy thousand pounds in return for seven percent of my business blue badge company is a uk manufacturer that makes attractive living aids our seminal range is our blue badge display wallets specially designed to fit the disabled parking permit to date we have made over 80 000 of our wallets all of which were made in our work room in bristol now because of the way we manufacture we can offer jobs and training for those with limited work options about 40 percent of our workforce are either disabled or a primary caregiver our big break came when boots approached us at a trade show after a lot of negotiating they agreed to start stocking our wallets in all 2500 of their uk stores since then other retailers have come on board and you'll find our products in over 300 post offices over 100 mobility shops and halfords have just placed their first order i'm inviting you to be part of an innovative company with clear social values and established sales channels together we can make blue badge company the world leader in this market i've got some little gift bags for you so i'm going to give those out [Music] a pitch with a conscience from bristol-based entrepreneur ellen greene she's looking for seventy thousand pounds in exchange for a seven percent share in her company but will she be able to justify a million pound business valuation [Music] i love the product it's great quality really really good who else offers these types of products so there are a lot of companies out there that offer very clinical and all i would say products usually in beige what i don't see is a brand that is overreaching a range of products this is our niche this is our gap in the market and it's a humongous market that has been largely ignored for a long time by youth obsessed product designers brand managers etc and i think we can make a lot of impact specifically in that market as you expand into other products to what extent are you going to be able to keep up that made in the uk i really would ideally keep it as a made in the uk product because i think it suits the values of the customers and is part of our brand now just so i understand it you both manufacture and right through to retail i'm kind of running probably about six businesses at the moment right because we do everything buying the component parts in making the product doing all the packaging and doing all the sales and distribution ourselves all in-house so can you talk me through that model i mean that should lead to a a business that doesn't just generate turnover but actually has quite a nice margin and therefore net profit so we just turned over 221 000 the draft accounts are showing that we made a gross profit of 86 000 and we expectedly uh pretty much broke even and i see turnover in this year uh going to nearly 800 000. gross profit should be 357 000 and this year we'll be making a hundred thousand pounds that's about a 13 net profit margin relief for ellen as her dyslexia fails to get in the way of her near-perfect account of her company's healthy finances is nick jenkins sold i love what you're doing and i love the way that you're doing it and clearly i'm very impressed by the way you're completely on top of the numbers um either you have a photographic memory but although but you're very good on the numbers that's that's always a good sign i like that i'm going to make you an offer i would like to offer you half of the money for 12 and a half percent i feel i can certainly offer something on the marketing side i would want another dragon to come in who can offer something perhaps on the distribution side i think that's also what you need an offer but there is still a mountain for ellen to climb as her business caught the eye of her preferred dragon investor tuka suleiman i personally feel because i'm a product man generally i think the product is a bit too safe and i would be honest to say it's quite boring i could do a lot for you i could really help you in making that product more appealing yep um and i'm looking at your valuation and i'm saying do you have an oil well in your factory maybe there's something that i'm missing i'm quite confident with the valuation because i think it fairly reflects the amount of risk and the potential returns by the end of the next month i imagine that we're going to have turned over about 100 000 which is nearly half of what we did in the whole of last year ellen i honestly believe that you should have been more realistic based on your numbers what do you need what do you what are your feelings on it then sort of with the equity that you would need to do that you feel would be appropriate for that i want some time to think about it he's not out but two suleimans not convinced by her million pound valuation either sarah willingham has made up her mind ellen i think you're fab and i love the ethos of your business i really do i think you've done such a great job um it's not for me it's it's a very niche market and quite honestly it's something that i don't really understand so for that reason i'm gonna back down and i'm out ella i'm gonna i'm gonna tell you straight away where i am because i kind of love the focus and and i think you could own that marketplace whilst you've done very well to get to that quarter of a million turnover in just now your valuation at four times your current income is is isn't right i think you've really overvalued what this business today is worth that's the reason sadly that i'm going to say that i'm out two dragons down one offer for half the cash and one undecided investor now deborah meaden is ready to have her say um i am afraid i agree with everyone on your valuation unfortunately it's not a bit off the mark it's quite a lot off the mark but actually i have to say it and i think you're cracking i mean i think you're great you are you're you're all over it you're smart you're on it you completely understand your market um so i am going to make you an offer my offer is going to change your valuation significantly okay so i'm going to make you an offer for all of the money but i want 25 of the business three-quarters of a million pounds wiped off ellen's business valuation in less than a minute to cassoliman has been sitting on the fence but he's now ready to show his hand i feel like an offer more than any other dragons therefore i'd want a bigger slice i would give you all the money but i want 40 [Music] tuka you are the dragon that i really wanted when i came in here however 40 is it's too high for what i've already invested into this business and how far i've come with it i tell you what i would come down to 35 i know what i can do as far as the product and perhaps we can look at i know and i agree made in the uk but as you grow you will have to decide can i get the production all out of the uk yep because let's be honest you want to grow it to a two three four million pound business and some you know so what so what i'm offering if another dragon and a preferably nick would come along on the online for 17.5 where he can actually give you an amazing amazing input to online okay so you've just managed to negotiate nick up a little bit there no okay is there any chance that you would look at coming down to more around 30 and then i could see whether we can work something out with nick then alan can i can i stop you we're looking at something that says made in the uk and your preferred investor is someone who specializes in out in offshoring a great businessman wonderful but his speciality is taking stuff offshore yeah no it's something okay thank you and that's not something that we're going to be doing by the way is we're not going to be taking it offshore it's not something that i want to do at all it's got to remain the majority has to be made in the uk that's what we're about i'm sorry i'm out disaster for ellen whose preference for outsourcing supremo tuka suleiman has left nick jenkins confused about where that leaves her brand uk business values and just when she thought things couldn't get any worse you have been faultless to that point but it doesn't feel good when you hear your second choice and then when you hear things mismatching you know with with things that you've said this is really important it's made in uk all the rest of it and then you're even discussing putting some of it offshore you know that should have been absolute i'm sorry we're brand are we brand uk we are we are brand uk 100 percent okay i feel exactly the same i'm out yeah the dragon that ellen really wanted at the beginning of the pitch is the only one left in the deal but events have since taken a controversial turn and he wants 35 percent of her business does she still feel the same unfortunately because tukey you want to take that significant part of equity that i'm just not prepared to give away and as the other dragons have just pointed out your key areas is on offshore manufacturing um i'm gonna have to decline your offer thank you very much thanks i rarely seen fall from grace in the den with ellen having somehow managed to snatch defeat from the jaws of victory i'm feeling a little bit shelf-shocked i think actually i went from three offers to no investment and i think i upset debra meadow i mean what's the worst you can do in there the evaluation was too high in the first place my heart just sank at that point bonkers how on earth has she just walked out with no money i cannot believe it you

Channel: Dragons' Den

Views: 453,663

Keywords: Dragons' Den, business innovation, business pitching tactics, business proposals, business strategies, business success stories, entrepreneur journey, entrepreneur perseverance, entrepreneur resilience, fashion entrepreneur, funding strategies, investment, investment offers, investment opportunities, pitch dynamics, pitch evaluation, pitching techniques, retail innovation, retail pitch, startup challenges, startup funding tips

Id: T9sY6bFC6ks

Length: 13min 36sec (816 seconds)

Published: Fri Oct 15 2021