Note: Dragons’ Den is a UK television show where young businesses pitch to a set of 5 wealthy and successful investors to offer them a share in the business. We took our unique microfibre towel company into the Den in May 2017 as we felt it was the perfect opportunity to be able to put our business to the test amongst scrutiny and hopefully come out with a new investor on board that would be able to help take our business to new heights. A little background to what makes our towels different as the unique benefits they hold are endless - Sand free, lightweight, compact but huge laid out, quick drying and won’t collect damp smells. What more do you need.
If not seen already, please refer to Blog 1 for more information about our Dragons' Den journey!
Dressed in shorts, casual shirts and flip flops / boat shoes, we stood in front of the Dragons. Our friends still laugh at us a bit for this. But it would go against who we are as people and our brand (focused around the outdoors) to be dressed in smart clothing, just because we were pitching to wealthy investors. It’s like the conversation people often have with their other half – ‘if you can’t accept me for who I am’. We left the corporate world to get away from following the status quo, so we definitely weren’t going to revert back here.
We went in asking for £75,000 for 5% equity in the business. We’d completed our pitch and aside from a very small hiccup where Ben had said our business was 5 years old (actually only 2 years old), before swiftly correcting himself in his first line, it had all gone smoothly. It’s funny how the mind thinks under pressure. We both kept saying random things like this in practice. They made no sense, Ben and I haven’t even known each other 5 years.
I won’t go in detail into the grilling as you can watch this on TV. But the 15 minute clip of us was edited down from us being in the Den for nearly an hour and a half. We got complimented on our numbers and the general success of the business so far. We got challenged on our use of Amazon as one of our key sales channels around the world and Peter’s personal challenge of struggling to see himself getting behind a business that only sells towels. However, we’ve seen hugely successful businesses take on this model, which we aspire to everyday. Such as Havaianas with flip flops, Mahabis with slippers and S’well bottles in the USA.
One things all the Dragons agreed with, which I still think is the number 1 reason we have had success as a business so far, is the manner in which Ben and I supported each other throughout the grilling. They could tell how well we gelled even with such different personalities and passions. I can remember specifically being asked a question that I didn’t know the answer to. I started to answer it before realising I was in too deep and began to stare blankly at the Dragons. I turned my head and looked at Ben (awkwardly) and he took it from there, no trouble. He could have easily interrupted and jumped in to say what I was saying was wrong but we know each other better than that. When we’re in too deep, we’ll look for help and he waited for that moment.
Legs starting to hurt, brains starting to go, Tej Lalvani (new dragon & CEO of Vitabiotics) made the first offer of £75k for a 15% stake in the business. We did it! We got an offer! In many ways, this was enough for us. The fact that someone with lots of experience in business had seen potential in ours was a huge compliment to our hard work over the last few years and we were really grateful. The only downfall being was that we had said to each other before we went in that we didn’t want to give more than 10% of the business away.
Luckily enough, this wasn’t our only offer:
Deborah Meaden – 10%
Touke Suleyman – 25%
Peter Jones – No offer. Stating that Deborah’s offer was too good to compete with.
Jenny Campbell (new dragon & financial entrepreneur) – No offer. Reason for Jenny was that she felt the other Dragons could add more value in our world so bowed out.
After a quick chat with the wall, we came back and accepted one of the offers, Deborah Meaden! Wow! What a day.
Obviously Deborah gave us the best offer but there was more to it than that. She had also been the most supportive to us throughout our time in the Den, making fair challenges and coming in with a fair offer based on our business position at the time. We had also watched at least 2 seasons of Dragons’ Den before going on the show and it was always Deborah that came across as the most interpersonal as well as having a key focus on helping the environment and community wherever possible. Something we strive for as the business grows.
The deal valued our business in theory at £750k. Before we went into the Den, we had actually been speaking with investors who were valuing it near the £2m mark. But for us, it was much more than that. It was about having a credible investor who was bought into our business and could help take it to the next level. Every day brings us bigger challenges and having someone on board that has been through the ups and down many times before, will only ever be beneficial for us.
And the best bit, the deal actually went through after the show like so many of them don’t but I’m going to talk about that in the next blog as don’t want you all to feel like you’re reading a book and not a blog. There is tonnes more exciting things to talk about that have happened since the Den and since we signed the deal with Deborah in early August. And what an experience it has been.
1. Re-watch a few seasons of Dragons’ Den – This is so useful. By doing this, we pretty much knew every question that might come up and so could learn the answers to them
2. Know your business inside out – many go in thinking they do already and quickly get found out. Get your accountant, friends, families to quiz you on all sorts of different parts of the business. Spot your knowledge gaps and get learning. Tip 1 will help with this too.
3. Be honest – we had nothing to hide but if you do, tell the Dragons straight away as it will only come out after the show in due diligence or even worse…during the show when you’ve tried to hide it.
4. Be nice and be confident – the age-old saying is that ‘people buy into people’ and I couldn’t agree with that more. Who wants to work with people that you can’t get on with day to day?
5. Make your display one to remember – Your stand needs to pop out to make people really notice when on TV, remember the whole room is pretty dark so the brighter the colours on the stand the better. Perfect for us.
6. Tip (a) for business partners – Know who is going to answer what question topics. The last thing you need is to be talking over each other, it makes you look unprofessional and also makes it look like you don’t have a shared understanding of the business. You can’t both know everything but you should both know what you’re good at.
7. Tip (b) for business partners: Make sure you align on your vision of the business. You may have your different opinions in certain areas but in front of investors, you are as one so you need to have a consistent message. Don’t start disagreeing with each other, it will just look amateur. As mentioned before, people invest in people so you need to show a strong bond.
We walked away from the Den as 2 very happy founders, with 2 packs of beer for the train home from Manchester back to London and lots to reflect on. How did we even end up in the Den?
The whole thing came and went so quick, it almost felt like we had just got off the lift on the wrong floor.
FYI - That's not Ben and I below