Tag Archives: Dragon’s Den

Are You Ready to enter the Dragon’s Den?

Money-Dragon The Dragons are coming to Prince George, BC on January 25th. Are you ready to make your pitch? The following are tips I’ve gleaned from watching the Dragon’s Den and Shark Tank programs. Each time the Dragons come to town a lot of entrepreneurs dream of running the gauntlet. Here are a few things to take in consideration before sauntering in to pitch the Dragons.

  1. You’d better have a product or service to sell. Take a page from the Kevin O’Leary School of Business – 1) Get a patent 2) Sell the patent 3) Collect royalties for the remainder of all time. If you’re selling unpatented widgets that can be copied and replaced at one tenth the cost, you’re going to agitate Mr. Wonderful and bring down thunder and abuse. Not what anyone hopes for when tiptoeing into the Den.
  2. Do a realistic valuation of your business. Pie-in-the-sky valuations will only bring disappointment and get you laughed out of the Den. The Dragons have seen a lot of pitches. You’re not going to fool them, so don’t even try. Here’s how the valuation relates to your ask. If you are looking for $250 000 for 50% of your company, you are essentially setting the value of your business at $500,000. Wild-eyed valuations foreshadow what it would be like to work with you. While you don’t want to sell yourself short, an inflated valuation will turn off investors.
  3. Don’t enter the Den without a dollop of sales under your belt. Prove sales before going under the microscope. From all I have seen, you will not get a deal unless you have some sales under your belt. Profitable sales are even far more enticing. And those sales had best be to real customers (no, not your Mom), as in people who don’t eat Christmas dinner with you.
  4. When the Dragons are talking, shut up and listen! Many times we’ve seen Dragons backing away from a deal because the entrepreneur is talking instead of listening. Why is this important? Well, the Dragons are aware that getting into a partnership with you means they’ll be faced with communicating with you on an ongoing basis. If you can’t listen, you’re probably not going to be a lot of fun to partner with. Besides, the Dragons have a lot of wisdom to share and you’ll miss if you’re trying to do all the talking.
  5. Answer the questions they ask. There are times to be evasive. There are times to hedge your bets and dodge around the answer like when your Mother and Wife are both staring at you from across the dining room table, wanting to know who’s pie you prefer.  There’s no room for evasiveness in the Dragon’s Den. Answer all questions, clearly, directly and concisely.
  6. Be available and plan to do the work. The Dragons have spent a lot of time acquiring wisdom, filling their coffers, and building powerful networks. The lesson? While it’s noble and courageous to work at a full-time job and build your business on the side, the Dragons aren’t looking for jobs, they’re seeking investments that make money. Make sure your plan includes payment for you to jump in and manage the business. The Dragons are selling the knowledge and funds and connections to make things happen fast. They’re not going to build a business for you; that’s your job.
  7. If you’re headed into the Dragon’s Den to sell a mere idea, you’re headed for disappointment and a bit of a thrashing. Ideas are two bucks a ton. Don’t consider yourself ready to meet the Dragons until you’ve at least got a working prototype.
  8. Know what you want from the Dragon’s going in. If you really just need the cash, a bank loan might be what you need. If you’re looking for the expertise the Dragon’s bring, think about who you want to work with. Do you need franchising help? Marketing help? Distribution? Know which Dragon’s you want to work with. Be courteous when turning down offers. Don’t be rude, even to Kevin. It will reduce the other Dragon’s desire to work with you.
  9. Choose the right business model. You’re going to hit a brick wall if you wander into the Den thinking you’re going to build a franchise business when all you really need is to connect with the right distributor. This comes back to knowing your product, your customer, the industry and your competitors. Dare I suggest that you need to do some business planning?

The Dragon’s Den is pure entertainment, usually fun, sometimes painful, always a learning experience. I admire those who have the courage to step into the ring. I’m always rooting for the applicant and I wish success and prosperity to all who take the risk.

Hone Your Small Business Skills before Tackling Venture Capitalists

While Dragons’ Den is educational and entertaining, I hope the theatrics don’t scare off too many wannabe small business owners.

After being in business for 30 years, I’ve almost forgotten what it’s like to have to report daily to a job or punch a time clock. I’d like to see more people enjoy the thrill of owning a small business.

Entrepreneurs need to invest the time and effort needed to learn the business trade before attempting to attract investors like the Dragons. And the most effective way I know of to learn about business is to own one. Like every other discipline, the road to success is littered with tough lessons, long hours and a lot of determination.

The Dragons sift through a lot of pitches in order to find a few investment-ready high growth opportunities. For every idea that hits the jackpot, there are several that simply don’t meet the standard set by the investors.

There’s no doubt in my mind that each of the Dragons have earned the right to sit in an elevated chair and cuff the spit out of the gutsy hopefuls who dare to venture into the Den. However, as some of those rejected souls scurry from the set with their shredded egos in tow, I find myself hoping they don’t give up on their dreams. A rejection isn’t necessarily the end of the trail. A “no” doesn’t always mean the business idea is a throw away. It might only mean the idea isn’t enticing enough to tempt these particular investors.

The Dragons come from a wealthy perspective. Most of them already have more money than they could possibly spend in this lifetime. They are seeking partnerships that assure high rates of return. It’s all about money and partnering with great people. They simply don’t need to take on projects or people that are at the wrong end of the learning curve.

Whatever else can be said about the Dragons, they offer an absolute goldmine of business know-how and each episode is a terrific opportunity to learn. Here are three lessons that that stand out with every session:

  1. Investors buy into people. The business concepts and numbers have to work, but ultimately it is the quality of the people that attract or turn them away.
  2. There’s plenty of money available for savvy people with the right ideas. The Dragons are just a handful of investors in a big, big world full of funding options.
  3. Applicants must prepare for the big investment league by starting small. Learn to run a tiny business before tackling a large one.

The marketplace is full of perfectly healthy small businesses that never grow beyond employing the owner and a handful of workers, and there’s nothing wrong with that. Scads of business ideas might not appeal to fire breathing billionaires and yet still be perfectly suited to meet an entrepreneur’s financial needs.

Dream big, but start small—and one day you too might slay the Dragons and walk out of the Den with a pot of gold.