This Pitch Made History In The Den | Dragons’ Den

[Music] First to face Stephen Bartlett and the Rest of the Dragons a london-based Duo Edward Hancock and Richard Simpson Edward may be a busy entrepreneur but he Still finds time to keep up with International events did you hear about The terrible news at the French cheese Factory uh recently burnt down all that Was left was debris [Music] Yeah and that's it boom It wasn't Edward's cheesy jokes but Rather his Lifelong Love of the food Stuff itself that led to Richard's Nickname for him we've known each other Since we were 13. I call him the cheese Monster at 13 and here we are 25 years Later running a cheese business but will The dragon's friendship with their new Partner mature as well as Edward and Riches Stephen welcome to the den honestly Think it's a it's a privilege and honor And I couldn't be more excited Stephen I Have to say you already look at home in That chair it suits me doesn't it it Does it does let's do it [Music] Hi dragons my name's Edward founder of Cheese geek I'm rich CEO and problem Solver we are the disruptive modern Cheese manga looking to raise 150 000 Pounds for three percent of the business

There are currently over 750 varieties Of cheese being made in the UK but most Of us can probably name less than 10 of Those if that there have been many Innovative tech-led businesses that have Revolutionized flowers craft gin craft Beer cheese has been left behind within Five years we aim to become the dominant Brand within the 3.2 billion pound UK Cheese industry and Beyond there are Three ways in which we intend to achieve This firstly we offer an unrivaled Experience whether it's our one-off Boxes or our Flagship subscriptions Guaranteeing new cheese every month we Source almost all of our cheese directly From UK cheese makers this means we're Sending out the best cheese at the best Time of its life secondly our technology Our upcoming mobile app will be a game Changer every cheese you've ever tried Will be stored and rated we call it Vivino for cheese thirdly our brand Identity and sustainability sit at the Center of our business so in our first Full year we turned over ninety six Thousand year two 280 000 and year three 1.54 million all that's left now is to Try some British cheese [Music] A cheese Cheese from Tech entrepreneurs Edward Hancock and Richard Simpson and rich is Now going to present you with some

Cheesy canopies which I'd recommend Having before your meal during your meal After your meal or in between meals They're seeking 150 000 pounds in Their business so I'm plant-based we've Saw some ethical Dairy cheese for you From the ethical yeah from directly from Here you've got my soft spot there Because if I ever ever I try cheese it's From them her ethically sourced cheese Sample has already won the approval of Serial Eco investor Deborah meaden now She wants to know what makes this Business unique So guys where is your value what's the Really hard thing to replicate for me I Would start with the technology it holds All our cheese Universe we have hundreds Of cheeses in there profiles and all of Them and on our customer data feeds into It and kind of works its magic and spits Out the five cheeses that are going to Be perfect for that person and then Customers rate their cheese and then That starts to influence what they get In future boxes so their subscription Just becomes more and more personalized As people stay with us so your timing is Actually good because British cheese is Absolutely blossomed because we're Struggling getting French cheeses into The UK and what I'm trying to work out Is when this all settles down What happens to your Market

I think there are 100 I think that is a Part of it but I think there's a Fundamental movement of all of us as a Body of people to understand more about Where our food comes from whether the Values of that producer and that Business match our values and what about The ethical side of it so at the moment Around 15 of all of our cheese is Organic and do you have any Mega dairies On your books absolutely not do you have Any cheese at all that doesn't isn't Grass-fed absolutely not 200 cows is the Most of any and they're all pasture fed Thank you An ethically leaning business powered by Some Savvy Tech in a growing Market Could prove a compelling combination for Deborah meaden But is Peter Jones finding the price tag The entrepreneurs have placed on their Business quite so palatable I've got to say your valuation is Smellier than your cheese [Music] Why have you come in here with such a Ridiculous valuation So what I've done is I've taken the Revenue and applied a 3.1 times multiple I'd also add I think which is really Important that I've invested 720 000. How much 720 000. where did you get 720 000 sorry for My career in finance have you got more

Where that came from No so you spent all your money on there Yeah It was a kind of crazy thing to do Either stupidity or genius or you know So 700k invested 720 of me and then 700 000 was also invested by investors and How much warm money do you see over the Next two years that you need to raise Zero I'm a numbers guy so I'm not Someone that's going to say I'm not a Business person I don't understand Numbers is my game we're expecting an Ebitdar in our fourth year of 5.6 Million yeah no look seriously as an Investor sitting here it's so lovely to Invest in a business that has a chance Of paying me back so thank you for that That sarcasm by the way You know the real world is like people Invest in businesses where we believe That there's a real return on investment But at the moment your first profits Coming in four years time that is a long Time away we're expecting is profitable Now this year we're forecasting to do 3.3 million that's with a 1.4 million Gross and an ebitdire of around 2K 2K yeah 2 000 pounds yeah just Marginally positive That's not profit that's that's a night Out Here's prediction of a less than Instead of measuring a company's

Profitability appears to have riled Peter Jones but the entrepreneur's Comparison of their product with a Successful wine app has caught the Attention of Stephen Buck [Music] Really fascinating business thanks thank You you refer to your business as vivino For cheese I'm actually one of the investors in Vivino I've got a couple of questions For you what is your exit strategy for This business probably most likely a Listing really yeah you're gonna have to Get Huge scale to list your business you Realize that I think we can So at the end of the fourth year we're Going to be 24 million and that is Conservative and I know it sounds crazy And you're going to laugh at that but Genuinely like I really have no interest In being crazy so that is based on Multiples based on where the business is Now you said you're not here to be crazy So you tell me what the biggest risks to Your business are Foreign Gosh the biggest risk to our business Um I honestly can't think It's really concerning when an Entrepreneur doesn't know what the risks Are to the business because then they

Might surprise them you've got to Understand what those risks are I would Throw one in I think capacity of cheese Makers so we work with small batch art Is our makers have they been pushed to The level of Supply that we need yeah so That's a really good point because There's a big difference between that Supply chain supporting a 1.5 million Turnover business and that supply chain Support near 25 million business it will Not cope with that demand so what can You do about that because that to me is The biggest thing stopping me from Sitting here right now and saying I want To make you an offer So I think um yes uh let's take an Example I mean the rise in non-dairy Milk actually helps us because the more People that drink oat milk the less People are drinking cow's milk that can Be made for cheese and there is so much Milk out there and we need to redirect That milk to cheese makers and we work Directly with them to make artisan Cheese Fine cheese mangas have a whole Series industry with their business Placed right at the center of it has it Been enough to persuade the dragon with A plant-based diet to invest I've sat here quietly trying to work out Whether or not this is something I want To be involved in or could be involved

In Because I think it's it's really got Legs and you have got something here But I've got some big issues within the Milk industry And I can't be part of a business that Whilst you might want to drive yourself Towards the more ethical end of it I'm Going to struggle Because I will say some things that will Upset some of your suppliers So I don't think I can invest so I'm Really sorry guys I'm out A disappointment for the entrepreneurs As Deborah meaden's concerns about the Environmental effects of milk production Lead to a rejection of their business Peter Jones was earlier dismissive of The company's valuation and he's now Ready to give his verdict on the Investment proposition If we talk about your overall strategy The biggest risk of this business is Your supply chain Without that supply chain being properly Organized and functional you actually Don't really even have a business But you always fall back on the tech You're deploying I think it's definitely a tech business I like the model I think the business Model is really clever And I can see this in multiple locations Around the world once you set up

Infrastructure and supply chain So I'm going to make you an offer And I'm going to offer you all of the Money I was going to say for 20 percent But I've paused Because I don't think you'll do it So I'm going to offer you all of the Money But I want 15 of the business Thanks thank you Have you are you accepting or better we Might just think for a sec An unanticipated offer from the longest Serving Dragon Peter Jones but for his 85 000 pounds he wants five times more Equity than the three percent that was On the table [Music] Will the Den's newest recruit Stephen Bartlett be prepared to match or even Better it I really like the business you know and There's tons of challenges you'll face But the most important thing that gives You conviction as an investor that those Challenges won't be insurmountable are The entrepreneurs that stand before you You know when I chose to join the den I Was asked a lot about what type of Business I was looking for and my answer Was always the same it was I'm looking For a business where there's a lever I Can pull based on my experience my skill

Set and my contacts to multiply the Value of the business So I feel like You're here for me I also feel like I'm Here for you So I am going to make you an offer But I'm not going to suck the blood out Of you like Peter just did Um I'm gonna offer you all of the money For 7.5 of your business because Because I think that's fair Okay thanks very much That's a really good offer And a lovely first offer oh thank you You shouldn't take it but it's great Bartlett puts the cat amongst the Pigeons The undercutting Peter Jones's offer by Half asking for just 7.5 percent of the Company It's an audacious move and one that has Certainly given to kasuliman something To think about That young new dragon He's just swept me off my feet Um look you have an amazing offer from a New Dragon Which you could consider Um but I do like it I think there's a Lot there that can help you with so Um I'm gonna make you an offer Because I think you deserve enough for Me whether it's right or wrong

But I'll offer you all of the money For fifteen percent Thank you thank you Rich you need to Play it a little bit cooler if you're Going to be in with any chance of Negotiating any sort of deal just look Over at Edward Stone face poker face You're just thinking oh my word this is Just what I need and you know what I Think one of those guys is just what you Need but I don't think I am the right Investor for you so it's with a heavy Heart I say that I'm out thanks thank You Do you want to go and have a little Thing yeah The cheese Geeks I have three competing offers to Consider Peter Jones and Tuka Suleiman are Demanding 15 of the company But Stephen Bartlett has swooped in for A more competitive seven and a half Percent oh we're gonna bring the Business okay let's say Guys Well thank you so much for your offers Really really appreciate it and I'm so Pleased that you kind of feel enthusiasm For what we're doing I think um I think Stephen you would have some Really obvious advantages that you can Bring

I just wonder whether if you got your Money back you'd be willing to drop down To five percent I'll tell you what I'll do If you can return my money within the Next 24 months Then I'll drop down to five percent I think then we love to accept It Rich have done what an investment as Well to make as my first one Unbelievable S first deal done Yes it was kind of scary not accepting Peter's offer I just didn't really make Eye contact with him but I think Stephen Could bring so much to the business he Adds the value in the areas that we need To help him carefully such a great match I think that was a cracking deal it was Really good I mean you're increasing Your percentage as you grow in that Scene sure yeah yeah but that was well Done

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