Whoever said gaining finance on Dragons” Den?was easy, lied. But startup Pouch did just that. In fact, it gained an offer from all five investors, leaving its founders with a difficult decision to make.
This year saw the show’s cushy’seats filled by Tej Lalvani, the CEO of Vitabiotics, Jenny Campbell, the founder of YourCash, alongside returners Deborah Meaden, Touker Suleyman and Peter Jones. And it’s their business knowledge, Pouch CFO?Jonny Plein admitted, that the company was after.
Pouch, a free-to-download plugin that alerts you to available discount codes,”has been taking the market by storm. Borne from the frustration of endlessexpired voucher codes and acknowledgment of the linked and rathercostly impact?of shopping cart abandonment, founders Plein, Ben Corrigan and Vikram Simha, have grown an empire that includesover £3,500 stores.
“Now all we needed wasAn investor to add experience and help open doors,” Plein explained a Dragon to help slay would-be rivals. This meant, however, passingAn online screening, telephone interview, audition and due diligence process, all before ending with a three-minute pitch.
It’s quite a rigorous experience, we previously found out from Kevin Stevens, who joined Dragons” Den in 2012 to gain backing for his Snowmule backpack. A”huge amount of information is demanded prior to the pitch as the Dragons have no contact with the entrepreneurs before the show. They genuinely have no idea about the people they’ll meet or products they’ll discover.
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Plein echoed the sentiment, saying theBBC’s due diligence was far more detailed than he imagined. “Every number and statistic said/included in the interviews/application needed to be backed up, so it’s a good job we didn?t bullsh*t our figures. And after two months of due diligence we were given a pitch date, 4 May 2017. We had six?weeks to get ready.
“This involved practicing in front of countless advisors and mentors who all pretended to be ‘Dragons’. We even hired a speech coach to help us with our presentation style Ben (also the chief revenue officer)is not a fan of public speaking!”
There was much to take into account. For example, a valuation had to be decided on prior to filming. The producers?warned the team?that asking for too much money “typically more than £100,000″ would lead the conversation away fromthe business, reducing the time they had to praise all things Pouch-related.
?With this in mind,” Plein detailed, “we went”for ?75k for 15?per cent, a £500,000 valuation, which we knew we could justify if pushed on it. We also decided a two-man pitch would be smoother than a three-man pitch, so Ben and I talked tothe Dragons whilst Vik waited outside the room.
“The Dragons could speak to Vik if they wanted to learn about the technical details, but we couldn?t bring him in unless they said so. This was a shame as they didn’t ask any technical questions?” Vik didn’t get a chance to shine. But there will be plenty more opportunities for our awesome CTO.”
Read on for advice when it comes to pitching on Dragons” Den or see our article:?Hungry House Dragons Den
Finally, the morning of the recording came around, which would see them included in the season starter of Dragons” Den. Having been up since 05:45 and ready to pitch any time from 09:00-19:00, Plein realised fatigue could be one of the factors leading people to stumble in the Den, “rather than a lack of business acumen”.
?We were put into a ‘green room’ with six?other nervous entrepreneurs and went into makeup, mainly so our foreheads wouldn?t shine under the studio lights!” Plein said. We had a pre-interview where they asked questions to introduce the pitch like,?’why will people like your product’ and ‘who would be your ideal investor’. However, most of this time was spent reading inspirational meme’s Ben’s mum sent him sadly these didn?t make it into the programme.
And then it was time. The BBC wants that first impression the Dragons get of you to be as authentic as possible. So, when we walked through that lift and stood in front of those five chairs, it was the first time they had seen us, and us them.
The two certainly wowed. Jenny Campbell offered the full ?75,000 for the 15?per cent, followed by Touker Suleyman, Tej Lalvani, and Deborah Meaden who also offered all the money, but for 20 per cent of the business. Peter Jones negotiated for 75,000And 25?per cent equity in Pouch.
The trio already knew who they wanted to work with though. As explained by Plein: “It all came down totheir brands, retail experience and the possible time they could commit. We hadn?t prepared for a’scenario whereAll five Dragons were willing to be on board. It’s not something any entrepreneur would dare dream, but presented with that as an option we came up with the best scenario for the business.
To sate your curiosity, they agreed a joint deal?with Suleyman, Lalvani and Campbell ?75,0000 for 18?per cent of the business, split equally betweeneach Dragon.
Plans have since been made for the future, with the funding due to be used on staff, not to mentionthe product. “We want to expand internationally and are currently focused on building and launching a world-class mobile and tablet product by the end of the year,” Plein explained. “We also aim to?make shopping more seamless for consumers. That means helping retailers improve conversion rates and develop a better understanding of customers.”
He does offer some words of wisdom for those looking to similarly go on Dragons” Den. Research is key know who you are speaking to. Knowing your numbers is just as important. Not only will you need it for the due diligence process, but, as Plein explained, “it is the most common place people fall down and the easiest place to impress.”
“Back yourself in your answers,” he added, “whether it is a Dragon or any other investor. No one knows your business as well as you do. And don’t bullsh*t. If we had grossly exaggerated any part of our business during the application process we would not have made it into the Den.
“More important thought is that you give it a go. Apparently ‘real entrepreneurs’ don’t go on Dragons” Den. If you can tell me another way that 3.5m people will hear about your business, please email me. I would love to hear it.”
