Dragons Catch Entrepreneurs Out On Finances | Dragons’ Den

Foreign My name's Roger and this is my wife Leslie and we've come here today to ask For an investment of 130 000 pounds in Our company and offering 15 equity Four years ago we decided to reinvent The blanket wool is the ideal material For bedding It's the most breathable natural fiber Known to man It has the ability to regulate Temperature of two people showing the Same bed It's hypoallergenic it's resistant to Dust mites and its resistance to mold Spores Wool is far superior to polyester Feather or down and we're on a crusade To try and convert the British public Back to sleeping under wool but not Under a blanket under a Barbe A cozy pitch from Roger and Leslie who Are seeking 130 000 pounds in return for A 15 stake in their business But queen of Home Furnishings Kelly Hoppen posses a problem with their plans For a well-inspired revolution Problem that you're going to have with This is converting people because Everybody's already got the bedding and So it's an extra cost to convert if the British public can be converted from Wool to a feather and down within 10 Years when there wasn't an internet when

There wasn't the word of mouth that We've got today I believe we can convert Them back much quicker and that's what's Happening in our experience so there's a Big move to not only wool but natural Products Is that one of your products there on The bed uh these are the duvets have a Look at that Corsica yes please Not sure we've got a big enough bed for You though You just wanted to lie down Peter I just Want to see how hot it is and sweaty and Ah I'm a great advocate for all um and it Is a lovely product you know and it's I Don't know why we ever forgot it you got Me there that's so so far that's great But in the den I'm looking for a Business investment so you've been Trading for four years Talk me through your Revenue over those Years In the first year we turned over about a Thousand pounds In the second year that went to 18 000. In the third year that went to 120 and This year with a month to go of the Year We're on target for 250. Last year Net profit Um 27 000 this year 54. 27 it's a net profit of 27 you can't

Have 27 000 as a net profit against 120 And be 27 percent Roger's usually wrong On the figures yeah Do you mind if I can just ask a question So I can get out of this bed come on NPR That's a question and get a bit um it's Quite heavy is it that surprises me People tend to tell us that they're They're lighter than they expected them To be I know a lot about bedding There are duvets now that you can get Which are very light so like literally You can't feel them on your body but They've got different types of filling Which just adapts to the body heat which Is what this does naturally naturally What do you need the money for We need about 100 17 000 to upgrade the existing carding line Replace the quality machine and and make It all synchronized if we have the new Machinery it would just it should Actually cut down on our waist and our Costs well that's not a compelling Business case how much is it going to Drive the cost down we're not too sure Um surely when you decide to spend 117 000 pounds you say this is the benefit Or is it just because it's my 117 000 Probably you haven't yeah that's not a Good answer in the den no I'll leave the Figures to Leslie so go on what's the What's the benefit of spending 117 000

Uh well the the the machine we have Requires two people constantly to be There okay so you can cost that you can Say so I only need one person so that's What I'm after what's the financial Decision by that behind spending 117 000 You haven't done that have you no we Haven't done that we haven't done that Figure Uh Woolly grasp of the figures from Roger and Leslie and now Peter Jones is Keen to test the logic behind the 850 000 pound valuation of their business [Music] If you had an opportunity now to get Three quarters of a million pounds in Your bank account but I asked you to Walk away from the business Would you take it Yeah but no I don't know Um probably that's a toughie but I'm Just going to discuss it with you do you Need a marriage guidance counselor yeah So it certainly would probably If you're potentially willing to sell Your business for a hundred thousand Pounds less than what you're asking me Today to invest in That kind of tells me a story as a Potential investor that you have Overvalued your business coming in okay Quite possibly okay Just makes your evaluation a bit barking Doesn't it hmm

Your valuation at the moment I think at This stage is crazy and I think you'll Probably go out of here and think about That valuation point but I can change The valuation because I can make you a Different offer But you've stopped me from doing that by Not evaluating how you're going to apply Those funds and the effect it's going to Have on the business I'm a natural Investor for you But you've stopped me Okay and I'm sorry I'm sorry for that But I won't be investor okay A blow for Roger and Leslie as an Initially enthusiastic Deborah meaden Walks away from the deal [Music] Will Duncan Valentine be more warmly Disposed towards the bedding Entrepreneurs I like it I like the business Um I'm gonna make an offer What I'm going to offer you is half the Money 65 000 pounds But for that 65 000 pounds I'd be Looking for 25 of the business [Music] Hmm that stopped us in our tracks it's a Question of whether we're going to Follow like sheep or whether we're gonna Go our own way

I Love you as a couple I love the fact You've built this business The fact is I I wouldn't buy one I know I know and I'm very organic but I Like nothing like something that's so Light on me and it feels slightly Claustrophobic the world I'm not going To invest I'm afraid I'm out but I I Honestly do wish you luck with it thank You Like the product Things in a great job I Can't get excited by I'm afraid Um I think there is a market for this You will sell some but it's not for me So thank you So far no one has matched Duncan Bannatyne's offer and with their chances Of securing an investment now hanging by The slimmest of threads everything rests On Peter Jones What do you think of Duncan's offer I don't know we need to confer Don't we yeah Obviously it's not the amount we require I'm not interested in punting this on my Own I think it's a large amount of money and I think Duncan's done the right thing by Offering half because he's de-risked it For himself So what would be the offer Or or don't you want to make one

I will offer you 65 000 pounds And I too will match Duncan's 25 percent Thank you very much for the offer so We'd all be equal partners Can we confer confer No we're not are we Even if it's a bit slower We'll take that chance I don't know Actually [Laughter] Okay It's um a very difficult decision and um We're not even sure if we're making the Right decision It's been a very very long hard Road to get where we are And to actually give up 50 of the Business Um is a little bit too high for us So unfortunately we're going to say Thank you thank you but no no thank you If that's your decision I'm sad to see It go good luck to you okay thank you Thanks So Roger and Leslie had two offers but They decided that handing over half Their business to the dragons was Ultimately too high a price to pay for Investment It was a hardcore yeah it was very tough And when you're in there you're so Tempted to say yes aren't you yeah I Think we're insane yeah

And we probably are

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