Many of you will be here because you’ve just finished watching the latest Dragon’s Den episode. I walk away from a £75,000 deal with new Dragon, Sara Davies. As I’m sure you saw, there was a lot of back and forth between myself and the Dragons before I walked away empty handed. However, the experience was far from a waste of time.
Here’s my side of the story. We’ll start from the very beginning. Just over two years ago I applied to pitch PLIQO’s ultra-compact suit bags to the Dragons, and in June of last year that opportunity finally came to fruition.
As regular viewers will know, the Dragons often appear antagonistic and hostile. In my experience, this couldn’t be further from the truth. Despite it being the last day of filming for the current series, the Dragons were engaged throughout, and genuinely interested in myself and the business I was pitching.
Although the conversation was lively at first, it quickly became bogged down in the minutiae of company valuation methodologies. As this dragged on, I felt the positivity in the studio ebbing away, as we became fixated on the valuation, rather than the business opportunity. One by one, the Dragons pulled out, leaving Sara the only Dragon not to fold.
When Sarah sprang to the rescue with an offer of £75,000, I was initially elated. When I realised she was eyeing 50% of my business, I was felt equally crushed. This would value PLIQO at just £150,000 – my valuation of £750,000 was five times that. Unfortunately, with nearly two years of anxious preparation pressing down on me, I made a miscalculation. I rejected the offer outright, failing to realise that the better option was a counter offer to move the valuation back up the scale.
I can’t say whether this negotiating tactic would have worked, but by refusing the offer outright, I ultimately walked away without the investment I had sought, and without exhausting all of the options.
Why did I reject the offer? Isn’t any investment, and all that goes with it, better than none?
As anyone who has founded their own business knows, there’s a huge amount sense of achievement that comes with that. As a result, relinquishing control is difficult. In retrospect, my valuation was probably too rich. Yet I also believe Sara’s was too low. At the time, I had more than £150,000 worth of stock – not to mention the value of the patent, brand and other intellectual property – to justify my position.
The two questions on my mind after leaving the studio were: ‘what could I have done differently?’, and ‘was it worth it?’ And unlike many questions in life, the answers came to me quickly.
I should have done things differently rather than simply walking away. My advice to founders and start-ups in a similar situation is both to trust your gut, and to have the confidence to challenge the person on the other side of the table. I had the necessary pride and confidence in my business – my mistake was failing to follow through and negotiate a better deal for PLIQO.
Was the experience worth it? Without doubt, the answer is ‘yes’. Throughout the process, from submitting my online application, to the screen test, completing due diligence, all the way to the pitch itself, every moment was a valuable learning experience, and if I could do it again tomorrow, I would.
Here is the key message for fledgling business owners: even if you walk away from an investor meeting empty handed, you will have learnt a multitude of lessons you’d otherwise fail to discover. Nine months since filming the business is in great shape, and my experience on Dragon’s Den seems more relevant with every passing day.
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