Dragon’s Den season 8 episode 1
The Good Pitch
Nora Furber, originally from Colombia but now living in St. Albert, Alberta, introduced her line of figure complimenting denim jeans, which eliminate a national crisis of flat bums on women. She was asking $300K for 40% equity.
I like her idea very much. It is very unique and creative. The jeans can flatten the belly and lift the bum. The technology ‘Lift-the-bum’ is really good. On the show, Nora let two models demonstrate a typical pair of North American made blue jeans showing a flat buttocks then modeled the Monjeloco Jeans which were tight fitting and displayed full rounded rumps. Nora designs the jeans and has them manufactured in Colombia. The target audiences are very clear that are ladies who want to have round bums. However the valuation of the company is $750K but in the last six months, the sales are $145K. The sales did not nearly support the valuation of $750K for the business. Dragons said they like the product and all the dragons commented favorably on the way she built the business and the social aspects of the manufacturing process she has chosen but their participation would have been priceless for her because the amount requested needs to be granted so no one invested in this case. I still think Nora is a good entrepreneur. Her idea is really good. She knows what she is doing and she has high competence. This is a prime example of an entrepreneur growing a business based upon a good idea but getting greedy or not doing their homework in establishing a valuation for the company and we should take away from that.
The Bad Pitch
Michael Petcherski from Toronto, ON, developed his own line of Three Works apple chips, which are dehydrated apple chips and has just one ingredient. Their other chips are still Fuji apples but they have a natural flavor added. They are sugar-free, fat-free and gluten-free. Michael was asking 300k for 15% of the company.
The product is sold in more than 450 stores across Canada. He needs the investment to break into the US market. When Kevin asked what made his snakes unique in a competitive market and Michael replied that it was the branding and packaging using a can instead of a bag, which I think the explanations are quiet weak. He told us it’s $3.99 per can in retailers and the gross margin is 65% and the sales of the first year are $850K. But when David confirmed that there was extensive promotion in-store to reach the sales and asked if that was included in the margin of 65% and Michael conceded that it was before promotion. Therefore it’s not really gross margin. So from a personal point of view, the entrepreneur should be well-prepared before he stands on the stage. He did convey confusing margin numbers, which would have been caught in a due diligence anyway. I don’t think he knows the uniqueness of his products very well and he needs to spend on promotions to stay ahead of the competition. We can see that the dragons don’t like the taste of the chips very much. Bruce said the taste of the apple crisps is not good and Arlene turned her nose up when he tried the Sugar Sharapova gumballs. However, Jim liked him as a pitchman and made an offer, which upped the equity to 50% claiming that the company wasn’t ready for the US market, and would need much more to engage in such an ambitious growth strategy.
Hour 1: 1 pm to 2 pm (Friday)
In this an hour I used the floorplaner to design my store. I spend a lot of time thinking about the design because I hope my store can give others a feeling of happiness and…