Dragon’s Den or Lambs to the Slaughter
Friday, November 25th, 2005For the last two weeks now I have taken a great deal of interest in a new television show called The Dragon’s Den. This show is a pitching contest where the owners and developers of business ideas present their case to a group of diverse and successful Australian Business people.
Now this isn’t a new concept. The Dragon’s Den show originates from the UK and variations of the same are conducted around the country behind closed doors with no cameras. These are called private equity or angel investor meetings.
My concern mainly is that under the pressure, the lights and the glare and probing of the Dragons I have to ponder the question: “Why give up so much for so little.” I have been more impressed with those business people who have stood firm and avoided the Dragon’s Den challenge. My applause to the girls at LustyThreads.com who once again pulled of another great PR campaign and from what I hear the phone’s were ringing hot the next day.
But back to business then. OK so without doubt there have been some businesses that should not and could not get funding. That’s life and barring a few exceptions they have recieved very polite ‘by your leave’s’ from The Dragon’s Den panel. There have been a few though that had to give away some serious chunks of their business in order to get their hands on the investment capital.
It comes down to a question over funds, networks, skills and experience. In the case of the Dragons a succesful pitch could result in all 4 key ingredients being injected into the business. This is the missing piece of the value equation. But here is the catch. There are 5 Dragons in the Den. In two episodes they have collected 50% of 2 businesses and 80% of 1 business. If there are 10 episodes then it stands to reason that by the end of the series there will be 15 businesses that the Dragons have to collectively add value to, along with the cash of course. Whilst at the same time they still have to operate their own businesses.
So beware your delivery to the Dragons Den. Most expectant business people I speak to these days have this built in pre-concieved idea that the money, the skill, the experience etc all has to come from one person, one source. This is far from the case. Seperate your shopping list. It’s easier to find money in small stages in smaller amounts of capital. It’s easier to buy top quality business advisers who have been there and done that than to try and find the right one who also wants to invest half a million dollars at the same time.
As a Business Owner seeking to raise capital consider the options. Do your homework and at all times if it looks like a Dragon, talks like a Dragon and acts like a Dragon then the chances are, cameras or no cameras, you are standing in The Dragon’s Den.
Good Luck
Andrew Winter
Andrew Winter is an Experienced Business Development Consultant specialising in helping companies grow through establishing and implementing sound capital raising strategies.
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