Dragon’s Den


Have you seen the first new series of Dragon’s Den? If not, you should! It is a great show where individuals try and get the Dragon’s in their business.

 

Image for Dragons' Den 

(From Left to Right: Duncan Bannatyne, Kelly Hoppen, Deborah Meaden, Piers Linney and Peter Jones)

It’s a series in which budding entrepreneurs get three minutes to pitch their business ideas to five multi-millionaires willing to invest their own cash. Entrepreneurs pitch for investment in the Den from our Dragons, five venture capitalists willing to invest their own money in exchange for equity.

There are some rules in the Den. Here they are;

Rule 1: The Pitch

Entrepreneurs must start the meeting by stating their name, the name of the business, the amount of money they are pitching for and the percentage of equity they are willing to give away in their company.

They must follow this with a pitch of up to three minutes. If it exceeds three minutes, the Dragons can stop entrepreneurs at any point but they cannot interrupt the initial pitch.

Rule 2: The Q&A

Entrepreneurs DO NOT have to answer all the questions asked, but what they do or do not choose to answer may affect the outcome – for example, if they refuse to reveal net profits. They may ask the Dragons any questions that help them determine whether they are suitable investors for their business.

It is important to note that anything that is discussed in the Den can be potentially broadcast.

Rule 3: Opting ‘Out’

Entrepreneurs’ time in the Den is over after all five Dragons have declared themselves ‘out’.

Also, once a Dragon has declared his or herself ‘out’, they MUST NOT re-enter negotiation on the deal, and unless there is a compelling reason, they should remain quiet and leave the others to pursue the negotiations.

Rule 4: Investments

The entrepreneur must secure at least the total amount they have asked for at the beginning of the pitch.

If a Dragon offers less than the full amount, the entrepreneur must try and make up the total by securing an investment from one or more of the remaining Dragons.

Each entrepreneur must leave the Den with at least the full amount they asked for or they exit empty-handed.

The entrepreneur can negotiate more money than was originally requested, as this is usually to redress the sticking point of an entrepreneur giving up more equity than was initially offered.

Rule 5: Multi-Dragon Investments

Each Dragon is working as an individual investor. The Dragons can invest as little or as much of their own money as they want. It is up to the entrepreneur to persuade them to match the required investment or pledge to invest a portion thereof.

As above, it is acceptable for the entrepreneur to seek investment from more than one investor in order to make up the total amount required. A full investment may involve between one and five parties.

Rule 6: Refusing Investment

An entrepreneur can refuse investment from a Dragon if they think they are an unsuitable investor or the deal on the table isn’t right for them.

Rule 7: The Deal

The deal agreed on the day is an unwritten agreement that depends on due diligence checks, and relies on the intergrity of both investor and entrepreneur to freely enter the transaction and be fully committed to seeing it through.

However, the deal is solely between the Dragon and the entrepreneur and after additional meetings, if an agreement cannot be reached, neither party is legally obliged to complete the deal.

The BBC remains impartial, as they cannot be involved in the business contract between the two sides.

Rule 8: The Advocate

Entrepreneurs are permitted to have an advocate on standby in the Den, to help them answer some of the Dragons’ questions. This advocate must usually be someone who is directly involved in the business. They can ask the Dragons to meet their advocate at any point after the three-minute pitch.

Any advocate attending the Den must be pre-approved, screen-tested and have gone through the same personal checks as the entrepreneurs.

All the information is on the Dragon’s Den Website. All the episodes are on the BBC iPlayer and on the website. The shows are on BBC Two.

Advertisements

I know you are looking at that comment fill out box.

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Blog at WordPress.com.

Up ↑

%d bloggers like this: