Dragon Versus Angels
A look at ways to get a business off the ground.
The popular TV series, Dragon’s Den has proved popular for viewers and would be entrepreneurs alike. For those of you who have not yet seen the programme (where have you been hiding?) the concept is a simple one based on the common business practice of seed funding.
In the series, novice inventors and seasoned business professionals alike, pitch to the Dragons (multi-millionaires who have been there and done it, and who are now looking for opportunities to do it over again!) The aim is to try and get them to buy into an idea or fledgling business and to part with some of their pocket change or more importantly with advice and industry contacts to help get the business off the ground.
This is something that happens every day in the ‘real’ business world where the Dragons are called Business Angels. There are a number of networks of which these Angels are affiliated to with the ultimate desire to find the next big thing, although the ability to differentiate between a good idea and a bad one is often not clear cut and you could say that the booty is in the eye of the beholder.
There are obvious example of ideas that have succeeded in the Den which in reality would have struggled in front of an Angel away from the TV studios and celebrity investors. One that springs to mind is that of Levi Roots, the now multi-millionaire who pitched up with a guitar and a mediocre barbecue sauce which he had made in his kitchen.
Whilst Levi undeniably had a strong personality and belief in his product (a must for any potential investee) he had no discernible business plan, no research into how to mass produce the product and probably more importantly, no route to market.
Without the programme, Levi would have had little to no chance of getting in front of an investor even close to the calibre of Peter Jones (the eventual investor). It could be argued that the real selling point to the Dragons was the very clever way in which Levi used his 5 minutes of fame to advertise the product (complete with theme tune) to a prime time audience on an established and successful TV show.
Dreaming of success
Had this meeting been conducted behind closed doors to Peter the Business Angel as opposed to Peter the Dragon, Levi might still be making a few bottles of sauce in his kitchen waiting for his big break and dreaming of the life he might win on a reality TV show.
Damien White writes on behalf of Harry Freedman Ltd