Pasta Disaster to Beezer Geezers- How to capture a dragon

Pasta Disaster to Beezer Geezers- How to capture a dragon

The Dragon's Den is notorious for tearing apart even the most well thought out business plans yet so many business owners appear on the show without having done the basics correct. There are two aspects that are important in a pitch to the Dragons; an innovative idea and a well calculated valuation. Who can blame the Dragons for wanting finances that have been calculated and not just numbers plucked from the air I certainly wouldn't be parting with my money for some of the business plans that have appeared on the show.

The first pitch on this specific episode of Dragons den demonstrates how not to win over the Dragons, and I would have to agree with Jenny Campbell, Pasta evangelists are demonstrating really well how not to run a business. First of all their business idea wasn't unique nor sustainable and in my opinion didn't make a lot of sense for the price they were charging, £13 for a pasta meal for two seems extortionate to me considering pasta is very easy to make and really cheap to buy from supermarkets, they have a very small target market they are aiming to please one in which is already saturated with other companies delivering a range of meals and not just pasta. My main issue with this business plan was one that also had the Dragons confused and concerned, their finances didn't add up. They estimated their companies value at £200 million a number randomly plucked from the air, this business would rely on repeat custom however after a couple of orders are they really likely to order again? Personally I don't think so. The orders come with the recipes and are therefore very easy to recreate without spending £13, therefore their overall valuation is considerably lower and the Dragons agree. With Pasta evangelists not breaking even until 2020, they are willingly losing their shareholders a considerable amount of money until then as well as diluting their shares. If I was the Pasta Evangelists I would personally rethink my pricing strategy as well as changing my overall valuation of the company.

In comparison the next pitch by Beezer.com was a complete hit with the Dragons, their unique idea of by passing app stores is extremely relevant in the ever changing technological world. However, I do think they made a few mistakes when negotiating with the Dragons, they were offered twice £75,000 for 5% share of the business which they immediately turned down only to accept the offer from Peter of £75,000 for 15% share changing to 10% share when he regained his investment. They obviously had Peter in mind from the beginning, in my opinion they were wrong to turn down the others offers of the money and a lower share in the company, the Dragons are able to open doors to the business world you would not be able to access and they do have technology companies and are therefore experienced, if I owned beezer.com I would not have gave away 15% share of my

company. Their rash decision to decline the offers cost them greatly in terms of shares and almost cost them the whole deal. They alienates Dragons without thinking thoroughly and this could suggest they make rash decisions in their business. There is a specific lesson that can be learnt from this and that is don't alienate the Dragons, you need their money and any help and guidance from them is a bonus. Besser.com were lucky to walk away with the money in this episode and I think if I was a Dragon I would have declined to give them the money.

In the Den the pressure is on, in order to succeed you must be flexible on your approach, do not go into the Den thinking you only want a specific Dragon as it could quickly backfire. Also make sure your valuation is correct and reasonable otherwise you could find yourself being laughed at.